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Property Management questions

VicChung

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Hello Everyone,

I am currently looking at hiring a property manager and the following questions came up:

(1) What is the current property management fee in Calgary?
(2) I am looking at hiring a friend as a property manager. Does a property manager need a license?
(3) Would anyone like to share the types of contracts that PM make you sign? Do you have to sign for a one year lease? How about advertising costs and bad rents?

Regards, Vic
 

Dan_Eisenhauer

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QUOTE (VicChung @ Sep 1 2008, 05:59 PM) Hello Everyone,

I am currently looking at hiring a property manager and the following questions came up:

(1) What is the current property management fee in Calgary?
(2) I am looking at hiring a friend as a property manager. Does a property manager need a license?
(3) Would anyone like to share the types of contracts that PM make you sign? Do you have to sign for a one year lease? How about advertising costs and bad rents?

Regards, Vic

Property Managers are required to be licensed in Alberta, unless they have an interest in the property.

Your contract will spell out who is responsible for what expenses. I do not have a sample to show you. Check the critical forms section on here. You may find a template.
 

SamEfford

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As for question #2, you can pay someone to be a help manage a property for you, however there are limitations (collecting rent, financial, etc). We pay a "superintendant" to manage our out of town properties and they are not liscensed.
 

smack123

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I pay 11% of gross rent in property management fess on my place just outside of Edmonton (Fort Saskatchewan).

My contract stipulates $85 per month or 11%, whichever is greater.
 

Thomas Beyer

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QUOTE (VicChung @ Sep 1 2008, 06:59 PM) Hello Everyone,

I am currently looking at hiring a property manager and the following questions came up:

(1) What is the current property management fee in Calgary?
depends on how large. A single unit (condo, TH or home) would be at least 8%, likely 10% and possibly 12% of rent collected. Less % for more units .. down to perhaps 3% for 100+ units !
QUOTE (VicChung @ Sep 1 2008, 06:59 PM) (2) I am looking at hiring a friend as a property manager. Does a property manager need a license?
yes, unless he co-owns the property.

QUOTE (VicChung @ Sep 1 2008, 06:59 PM) (3) Would anyone like to share the types of contracts that PM make you sign? Do you have to sign for a one year lease? How about advertising costs and bad rents?
there is no "standard" .. there may be one on the REIN "critical form" section.
Yes, it is common for one year minimum, and then you can cancel with one month or 3 month or 12 month notice, depending on what your contract states.

Yes, it is common that the owner pays for all out of pocket expenses such as advertising, debt collection, hiring an eviction firm, paint, a new fridge, cleaning ..

Bad rents: what do you mean ? You are the owner. If the property manager can`t collect, usually the tenant eventually gets evicted (at your expense if 3rd part help or the courts have to be involved) and you will not get rent for that month or 2 .. but usually the PM also does not get any fee as that month`s rent was 0. So, he/she has an interest to collect and get decent tenants !
 

VicChung

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QUOTE (thomasbeyer2000 @ Sep 3 2008, 09:41 AM) depends on how large. A single unit (condo, TH or home) would be at least 8%, likely 10% and possibly 12% of rent collected. Less % for more units .. down to perhaps 3% for 100+ units !

yes, unless he co-owns the property.


there is no "standard" .. there may be one on the REIN "critical form" section.
Yes, it is common for one year minimum, and then you can cancel with one month or 3 month or 12 month notice.
Yes, it is common that the owner pays for all out of pocket expenses such as advertising, debt collection, hiring an eviction firm, paint, cleaning ..

Bad rents: what do you mean ? You are the owner. If the property manager can`t collect, usually the tenant eventually gets evicted (at your expense if 3rd part help or the courts have to be involved) and you will not get rent for that month or 2 .. but usually the PM also does not get any fee as that month`s rent was 0. So, he/she has an interest to collect and get decent tenants !

Thanks everyone for all your help!!! How do I check that the PM has the necessary licenses? Is there an organization they need to belong too
 

VicChung

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Messages
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QUOTE (thomasbeyer2000 @ Sep 3 2008, 09:41 AM) depends on how large. A single unit (condo, TH or home) would be at least 8%, likely 10% and possibly 12% of rent collected. Less % for more units .. down to perhaps 3% for 100+ units !

yes, unless he co-owns the property.


there is no "standard" .. there may be one on the REIN "critical form" section.
Yes, it is common for one year minimum, and then you can cancel with one month or 3 month or 12 month notice.
Yes, it is common that the owner pays for all out of pocket expenses such as advertising, debt collection, hiring an eviction firm, paint, cleaning ..

Bad rents: what do you mean ? You are the owner. If the property manager can`t collect, usually the tenant eventually gets evicted (at your expense if 3rd part help or the courts have to be involved) and you will not get rent for that month or 2 .. but usually the PM also does not get any fee as that month`s rent was 0. So, he/she has an interest to collect and get decent tenants !

Thanks everyone for all your help!!! How do I check that the PM has the necessary licenses? Is there an organization they need to belong too
 

DrewBetts

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In reference to your question about hiring your friend to do management for you, I have some detailed information that I hope will help. This is from one of Barry McGuire`s tales from the trenches.

CAN I MANAGE MY OWN REAL ESTATE PORTFOLIO?


When private individuals and companies (or their employees) manage their
own property, they do not require a real estate license (a licensed
property manager must have a real estate license). For example, a firm
called Real Estate Investors Ltd. owns 15 fourplex units. The company
or its employees may manage the property, without a license.

Also, co-owners of property who own a `substantial interest` in the
property do not require a license to manage that property. The term
`substantial interest` is not defined in the Real Estate Act, however.
The Real Estate Council of Alberta interprets substantial interest as a
property ownership interest greater than 33 1/3 percent. Therefore,
Ivan Investor owns a property with Mike Mogul and Larry Landlord and
Ivan`s share of the property is 33 1/3 percent or more, he may manage
these properties on behalf of the three owners, without a license.

Some property owners or property managers will contract with an
`on-site` manager to handle some of the duties related to a property.
An on-site manager does not require a license to perform duties such as
maintenance, security, lawn care, etc., but must live in the complex and
can only carry out activities on behalf of landlord at that particular
complex. The on-site manager may also collect rents to pass on to the
owner or property management company; however, they may not manage the
rental or security deposit accounts.

(Thanks to our member who referred me to the Real Estate Council of
Alberta (RECA) web site)
 

brentdavies

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Third option is to hire your friend as an employee, and does not require a licensce. Providing that your friend does not work for someone else renting property. Nor can he be your realtor, as he is licensced and must have the permission of the brokerage to do so.

Property managment contracts are not a "standard form" and every company has it own contract. A 27 page contract is available from IREM of Chicago, over the web.

Drew and Barry are correct, in Alberta, property management and real estate currently have the same licensce. Just different specialities. Real Estate Council of Alberta or RECA governs the industry. www.reca.ca

Onsite managers for apartment buildings do not require to licensced, as they are under the supervision of a licensced property manager. The resident manager does not set the rents, or lease terms. Theses are set by the owner or the licensced person.
 

DrewBetts

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QUOTE (brentdavies @ Sep 5 2008, 03:28 PM) Third option is to hire your friend as an employee, and does not require a licensce.

Excellent addition Brent. Thanks for the info. One clarification to hiring your friend as an employee is that your company must have at least a 33 1/3 interest in the property to do so. If you have no interest or less than that, even if he is an employee of your company, your company is not eligible to manage the properties. Barry is very up to speed on this so I`d suggest you chat with him if any specific questions come up. Cheers!
 

brentdavies

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RECA, or the Real Estate Council of Alberta policy is that 1/3 ownership is required for Company A or Person A to manage the propery, without licence.

So if you own 10% of the property and your employee is the resident manager, you must be licenced. Several clients of ours were exactly in that situation.

The other differance is that an employee of majority owner ( more that 1/3) is not required to be licenced nor the company is required to be licenced.

Only in Alberta.
 
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