The pricing structure of most organizations can seem mysterious and confusing sometimes, especially in the Property Management field where there are so many different variables to consider and different ways to get the job done. That’s why I have decided to create transparency in our pricing and service offerings. I wish to present to you a list of all of the fees and charges you can reasonably expect to find while working with us.
So how much are our property management fees? Our fees and prices are as follows:
- Management Fees – We have 3 service plans:
Standard = 8%, Master = 11%, Master Plus = 12% (of rents)
- New Tenant Placement – 100% of the first month’s rent (tax included)
- Set-up Fee – Up to $175, based on selected service plan
- Inspection Fee – Up to $225 per year, based on service plan
- Maintenance and Repair Fee – Up to 15% surcharge of invoice, based on service plan
- Reserve Funds – $500 for each property, plus $150 for additional units
Even with our prices listed for you, there are many different combinations and options for you to choose. So now, let’s go into detail about what we offer, what is included in the different combinations, and what you can reasonably expect to pay if you hire us.
The day-to-day operations of your rental property is really the bread and butter part of property management operations. To some owners, it may seem a bit outlandish to pay a relatively large monthly fee to a property manager while seemingly not much goes wrong month-to-month. I understand that thinking process, which is why we strive to pack a lot of value into our services. We provide a comprehensive list of our service offerings on our Services page.
Our management fees fall into three service plan categories that we have labeled, “Standard”, “Master” and “Master Plus”. The fees are, 8.0%, 11.0% and 12.0% of ‘Gross Monthly Income Due’, respectively. The term ‘Gross Monthly Income Due’ (GMID) includes all rents and other income and charges from the normal operation of the rental property, including, but not limited to, rent, parking fees, laundry income, and any other miscellaneous income that is due to be paid by the tenant of each rental unit. Our “Master Plus” service plan is designed to be a one-price solution. By selecting this plan, you would be entitled to all of our services at no extra charge.
However, depending on the type of property you have, and your specific needs, you may not need to select the “Master Plus” service plan at 12.0% per month. If your rental property is relatively new, or somewhat easy to manage, such as a condominium apartment or townhouse, then most likely the “Standard” 8.0% plan is best for you. If you need help deciding which service plan is best for you then contact us and we can help you choose.
New Tenant Placement
There is quite a lot of work required to find and select a qualified tenant for your rental property. We start by taking pictures of your place, creating and maintaining the ad, responding to interested parties, scheduling visits, walking through the place with prospects, collecting applications, processing applications, collecting deposits, signing the lease, and performing an initial inspection with the new tenant.
We charge for this tenant placement service ,and that charge is 88.495% + HST (rounded to the nearest dollar) of the full amount of the first month’s rent for each new tenancy agreement that we enter into with a tenant. This fee is taken from the first month’s rent that the new tenant provides us.
Why do we charge this particular amount? Let’s say we rented a 2-bedroom apartment to new tenants for $1500 per month. Our fee would work out to $1500 x 0.88495 = $1327.43. We then add the HST at 13% = $172.57. Your total would be: $1327.43 + $172.57 = $1500.00. Essentially, our fee is 100% of the first month’s rent, including HST. I just wanted to break it down so there’s no confusion.
Each property and property owner will need to have their information entered into our system. The process of inputting your personal information and all your property’s information in to our system, as well as doing a careful preliminary inspection of your property can be labour intensive and may require multiple hours of work. As such, we charge a fee for each property that we are hired to manage.
So, if you picked the:
- ‘Standard’ service plan at 8% per month, your set-up fee = $175 + HST
- ‘Master’ service plan at 11% per month, your set-up fee = $90 + HST
- ‘Master Plus’ service plan at 12% per month, your set up fee = $0
Throughout the duration of any tenancy, we will perform interior and exterior inspections of the Property up to three times per year. Our job is to look for, and take care of, any repair and maintenance needs, or any tenancy agreement compliance issues, etc.
So, if you picked the:
- ‘Standard’ plan at 8% per month, your inspection fee = $75 + HST / visit
- ‘Master’ plan at 11% per month, your inspection fee = $40 + HST / visit
- ‘Master Plus’ plan at 12% per month, your inspection fee = $0
Maintenance and Repair Fee (M&R)
Your property will require maintenance and repairs from time to time. We are able to get that work done for you. We charge a supervisory fee of up to 15% of the value of any maintenance work or minor repairs that we have organized for your rental property. For instance, if we hired a contractor to fix a plumbing issue and the invoice was $100, we will implement an additional surcharge of up to $15 for our role in facilitating that repair. This surcharge is variable and is dependent upon which management service plan you have selected.
So, if you picked the:
- ‘Standard’ plan at 8% per month, your M&R fee = 15% / occurrence
- ‘Master’ plan at 11% per month, your M&R fee = 10% / occurrence
- ‘Master Plus’ plan at 12% per month, your inspection fee = 0%
Although the reserve funds aren’t exactly considered a fee, they are something that we will ask you for when you sign an agreement with us to manage your rental property. As such, I felt it was necessary to disclose it here. Ultimately, we need to be able to move quickly and somewhat autonomously when it comes to minor repairs and maintenance requirements.
Therefore, we will ask you to deposit an amount of money that we will hold, in trust, and call ‘Reserve Funds’. These Reserve Funds will be used whenever we need to pay an invoice or organize any work that is needed on your rental property. We request that $500 be deposited for each Property, plus an additional $150 per additional Rental Unit for Multi-Unit Dwellings (e.g., a triplex would require $800 in Reserve Funds).
We will use the Reserve Funds to pay any expenses related to the management of your property, including but not limited to our management fees. We are set up to continue to collect our usual management fees when your rental property is vacant, with some exceptions. Also, we collect our fees on the first of the month. If the Tenant pays late, we will access our fees from your Reserve Funds.
If the balance of the Reserve Funds becomes less than the amount required to be retained by us, then we may either, deduct an amount from the rents that will restore the balance to the full amount required, or give you written notice that we need to use the Reserve Funds and to please return the balance back to the amount required.
Why do you collect your management fees even when there’s no rent coming in?
As I’ve noted above, our management fees are based on the ‘Gross Monthly Rent Due’ (GMID). This is where we collect our fee from you on the same day of the month, regardless if the tenant has paid, or whether your property is vacant. Now, on the surface, this sounds like a terrible idea! Why would you want to pay us any fees when the tenant that we have selected pays the rent late, or moves out? Why would we even ask for this type of arrangement? Are we trying to scam you?
I completely understand how bad this looks, and no, we’re not trying to scam you. We just look at things differently. As is commonly accepted, the most important thing to consider in any long-term investment strategy, is the big, overall picture. We try look at what the property owner’s next 5 to 10 years should look like, and what we need to do to help them get there. Every single time we reflect on this, we see that taking care of people, especially tenants, is the number 1 route to becoming a successful real estate investor. A happy tenant will take care of your property, which ultimately takes care of your needs.
In order for us to properly and consistently take care of your tenants, we’ll need to keep our primary focus on them and their needs. If we start worrying about how we’re going to keep the lights on, or if our employees start to think they might be getting their hours cut back, then our focus is no longer on your tenant’s needs, it’s on us. And that’s when mistakes happen. We play the long-game and we want to help you reach your investment goals.
There are many different variables to consider when selecting a property management company. I hope I’ve cleared up any mysteries about our services and prices. If you have any questions, or would like more information, please contact us and we’d love to help!
Disclaimer: The information provided in this website is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, provincial, or federal legal authorities.