Property Manager`s Fees

[3Girls]

I would like to get an idea of what others are paying PM in fees. I am about to sign with one with the following fees:

- advertising, credit chks etc., at cost, and hourly charge of $70.00/hr to carry those out
- a lease commission of first month`s rent +GST
- administration fee of 10%of monthly rent in advance +GST

I am buying this property that currently rents month to month, but with good renters - 1/2 rented to a co.
Based on the current rent, to gain a 1 year lease the PM would cost at least $6,720 for the next year. This does not include any costs associated with finding new renters should the suites open up.
This is in a small town near the AB border. PM would travel about 20 minutes down the hiway to get to property. It is 2 hours from where I live.

Fortunately the cash flow is strong enough to support these charges.

Do these fees seem normal or excessive?

Maurice Roberge

 

[GarthChapman]

Ouch!

We self-manage most of our properties, but have a wee bit of experience with PMs.

We are seeing rates from as high as 10% of rents for single family down to the 5-7% range for multi family properties.

Rent-up fees are extra and I have seen them from $100 to half the first month`s rent per occurance.

We have never paid for credit checks etc as that is included in the other fees.

Typically you would pay the advertising costs (as billed to you by the PM) and also usually a small percentage of the Repairs and Maintneance invoices. This covers the PM`s costs associated with arranging the work on your behalf.

Hope that helps,

 

[George]

Good evening,

I share Garth`s opinion.

I see a variety of property management fees and can assure you that they are not typicaly that high. Now, in saying this, in a small town there can be supply and demand problems admittedly which could be your issue, or perhaps they simply provide awesome service and above market rents in which case the fees can be justified. The fees charged aren`t as critical as what`s left over at the end of the day if the property managers can add this value, but you wouldn`t want to pay higher fees simply becuase the property itself allows you the flexibility. I`d certainly want to check out some alternatives.

Warm regards...

George

 

[DianneDachyshyn]

Wow! That seems high to me. I have received quotes from five companies now, and none of them so far have mentioned an hourly fee for advertising and credit checks. Credit checks cost, but other companies bill you just that cost.

I`ve never heard of a lease commission. That seems over the top.

I heard from another investor that one company charges 3% of the sale price of the property if the landlord sells it to the tenant. I would stay away from that company!

The company that we just signed with charges a flat 10% of the gross rents with no extra charges except for expenses that they might incur by managing our property, i.e. maintenance (some charge a 10% administrative fee for paying the maintenance people, but our company has them send the bill directly to us to avoid the extra fee), extra long distance charges, credit checks, etc. Many companies charge a move-in/move-out fee and/or walk-through fee.

Most companies ask for a deposit of some kind to open your account. The ones that I have contacted have quoted anything from $350 to $1000. Some of them charge you to open a trust account (the cost of printing cheques, servicing the account, etc.).

Those are some of the standard fees. It pays to read your contracts carefully.

 

[invst4profit]

Wow this property must have exceptional cash flow.

 

[3Girls]

Yes, one of those gold mines you find now and then. $3,200 monthly rent on a purchase price of $179,000.

 

[albainstar]

It seems high, i have heard 1/2 months first rent as a fee for placing tenant - this includes credit checks, ads, admin etc
then 3-10 percent rent there after to collect rent every month and any other things that arise.
however the travel time is long so there should be a surcharge for that, that said it still seems high.
if there is no compitition though you are kind of stuck
(also try realestate offices many do property managment as well)