If you own rental property, getting a professional real estate manager is a great method of ensuring it runs smoothly and for optimizing returns on investment. For example, property management firms vet tenants and ensure rent is collected on time. Besides, the management also maintains the property so that it stays in top condition.
To offer real estate management services, the selected firms charge landlords a fee. Here, you need to carefully compare the revenue from the property and the charges of the property manager under consideration. Remember that the premise also has to meet other costs such as rental income tax, land rates, and repair expenses.
This post is a careful evaluation of the real estate industry to answer one key question: “What is the average property management fee for rental properties?”
Why Do You Need a Property Manager?
Before setting out to explore the average fee charged for managing real estate premises, it is prudent to establish why you actually need one. When you select a high-quality property manager, he can greatly enhance your premise in the following ways:
- Helping To Get High-Quality Clients
If you are a landlord, the last problem you want to encounter is a stubborn client. However, getting good clients is no easy task. Because property managers have been in the job for a long time, consider using them because they know how to vet and get good tenants. These are tenants who pay rent on time, stay longer, co-exist well with others and cause fewer problems.
- Fewer And Inexpensive Legal Problems
Landlords who have been in business for some time can confirm the fact that it only takes a troublesome tenant to incur major legal and financial issues. However, property managers have seeing such cases often enough and this will help you to avoid them through tenant screening, binding agreements, and regular inspections.
- Short Vacancy Cycles
When a unit in the rental property falls vacant, property managers are able to fill it promptly. They use their networks with other managers to advertise and fill the vacant units immediately so that landlords do not incur losses.
- A Tighter Rent Collection Process
If you have a rental property, the expectation is to get a smooth flow of income. However, this can only happen when you contract professional property management firms with the expertise of handling tenants and rent. The process starts from tenant screening to ensure that only the tenants capable of paying rent and who will hopefully look after your property are considered and those with regular income are allowed to move in.
What is the Average Property Management Charges
The property management fees in Ontario for your rental property depends on a number of factors. These include the location of the property, the estimated man-hours for running the service, and the level of landlord/property management involvement. The list below provides the average estimates on what to anticipate when contracting a property manager in Ontario:
The Typical Property Management Fee
When you contract a property management firm, expect to pay a commission of 6% to 12% of the rental value. This fee goes to the management company. However, there are some companies that charge a flat rate of $100-$200 per month, especially when the rental income is relatively low.
Other Possible Fees to Expect
In addition to the property management fee, the landlord/management firm is also expected to meet additional charges for running the premise. These charges include:
- Maintenance charges: To keep the cost of maintenance low, some properties management firms opt to work with a number of repair professionals to carry out regular repair works. In such cases, you will be required to pay a callout fee of $15-$45 per person. Note that the cost of repairs will be higher because the management will also factor in the cost of materials.
- New tenant placement: Some property managers mighty charge a fee for getting a client into a lease. Most of them charge 50% of the tenant’s first month’s rent.
- Eviction charges: It is important to appreciate that there are times when things do not work as expected and even a good tenant can become irresponsible and a nuisance. If the tenant needs to be evicted, property managers charge between $200 and $500 per eviction. This cost is used to follow the legal process of acquiring a court order to evict the tenant.
- Vacant unit charges: If you engage the property manager when the premise is empty, you are likely to be charged the value of one month’s rent for the unit. The cost is used to pay for costs associated with placing adverts and showing prospective renters the premise. It also covers expenses related to preparing lease paperwork.
- Miscellaneous fee: When you contract a property manager, it is possible to get some extra costs meant to cater for additional expenses such as advertisements, inspection fees, and other unanticipated spending.
If you are a landlord in Toronto, the property management company of choice will determine how effectively the property is managed. You should focus on the commitment of the selected firm and charges costs. One outstanding firm that has won the hearts of real estate investors is Buttonwood Property Management.
The Property Management Price of Buttonwood
The most notable thing about Buttonwood Property Management is its commitment to low fees. Management holds the view that the investor or landlord should enjoy greater returns on investment (ROI). Here is a closer look at the Buttonwood Property Management price list:
- The monthly management fee is 6% and this fee is capped at $230. The low fee makes Buttonwood Property Management among the cheapest in the market. For example, other companies charge between 6% and 12%.
- An invitation fee or property set-up fee is free at Buttonwood Property Management. However, other companies charge a fee of between $150 and $300.
- The tenant placement fee without MLS is free. However, a placement fee with MLS attracts a small fee of ½ a month’s rent and an additional $200 to cater for the MLS fee. This cost is minimal when compared to other companies that charge a full month’s rent for bringing in a new tenant.
- Move-in and move-out inspections at Buttonwoods are free. However, landlords who use other companies are charged between $75 and $200 when clients are moving in or out.
- Fall and Spring Inspections are charged $99 each at Buttonwood Property Management. However, other companies charge clients up to $400 for similar inspections.
- Other charges you need to know about include the non-resident tax remittance that is charged at $25 per month and insurance charges starting at $150.
- Some of the free services at Buttonwoods include vacant house visits, granting access to trades people, a pre-delivery inspection, online financial statements, and lease screening.
Why You Should Consider Buttonwood Property Management
Buttonwood Property Management is a company built on four key values: integrity, service, expertise, and commitment. These values demonstrate the working model of offering the best possible services to landlords. Whether you have multiple real estates in Toronto or converted a few units of your home into rental units, Buttonwood is there to make the investment grow.
Here are other benefits of using Buttonwood Property Management:
- The company offers a wide range of services. They can help you with residential property management, residential property rental, and commercial property management.
- The company’s commitment to low fees demonstrates its appreciation of the landlord’s hard work and sacrifice when constructing the buildings.
- Buttonwood does not have hidden costs. When a landlord signs an agreement with Buttonwood, it is only the fee captured in the agreement that will be incurred. If there are additional costs, management discusses these with the landlord for transparency and value for money.
- Buttonwood Property Management provides expert investment consulting to help landlords and other interested parties grow their portfolios. This implies that no matter the level of your property investing, Buttonwood presents a better opportunity for growth.
- For Buttonwood Property Management, the target is not to optimize profits, but seeing the clients growing from one level to another. They work with experts in finance, investment, tax matters, and property development to ensure that their clients set the right goals and achieve them.
To optimize the returns from your property, it is advisable to work with property management professionals. These experts have been in the market for years and understand the problems to avoid for progressive growth and success. To get more from the property management company, it is important to look for the one with low fees.
Buttonwood Property Management came out as a professionally run enterprise that targets helping investors grow their businesses to the next level. Unlike other companies that focus on charging the highest possible fee, Buttonwood seeks to get the funds into the landlords’ pockets.
What is the average property management fee for rental properties? Though the answer to the question is on average between 6% and 12% depending on the selected company, it is advisable to also factor in the following best practices when selecting the company of choice:
- Ensure the company has professional management that is committed to assisting clients to grow progressively.
- The company should be licensed to operate in Toronto.
- Check past clients’ feedback to establish if they were satisfied after using the company’s services.