What is included in a Property Management Fee?
Written by Jamie Palmer, President/Broker of Power Properties Ltd.
If you hire a full-service Property Management Company you can expect to pay a percentage of the monthly rent as a “Property Management Fee”. This often ranges between five and fifteen percent depending on the property type, location, and what is included in the fee.
By using a percentage-based property management fee, the property management company will be motivated to get the property rented and obtain the highest rent possible as they are getting paid a percentage of the rent. They are in it with you in good times and bad, as rents increase they make more money if rents should fall their fee drops too.
Okay, so what is included?
Since Property Management Fees will vary from company to company, their services can vary as well. However, if you hire a Property Management Company, with an all-inclusive Property Management Fee, you can expect these services:
Rent Collection
Each month, the Property Manager will collect the rent from the tenant. This includes following up with tenants who pay the rent late and starting the eviction process if needed.
2. Inspections
Property Management Companies will often inspect a property annually to ensure the tenant is taking good care of it and to keep an eye out for any preventative maintenance.
3. Coordinating Repairs
With an all-inclusive management fee, the coordination of repairs is included. For example, if a plumber charges $200, you will also be charged $200 with no additional costs. This normally includes a 24/7 Emergency Line for your tenants.
4. Communication
Property Management Companies act as a “middle-man” between you and your tenants. So you will never have to deal with tenants directly.
5. Rental Income Deposit
You should expect your rental income to be automatically deposited into your bank account once a month.
6. Monthly Financial Statements
You should receive a financial statement each month that summarizes your rental income minus the Property Management Fee and any other expenses.
Something to keep in mind.
Not all Property Management Companies will have an all-inclusive Property Management Fee, so during the sign-up process make sure you ask them if there are any additional fees you can expect on top of your management fee. For example, some companies will charge an extra fee to coordinate a repair or schedule an inspection.
In addition to a Property Management Fee, you can expect to pay separate fees for additional services such as Leasing, Renewals, etc. In this blog post, we break down all the additional fees you can expect to pay from ANY Property Management company.
Written by Jamie Palmer, President/Broker of Power Properties Ltd.
Jamie Palmer is the President and Broker of Power Properties. He holds a Certified Property Manager (CPM®) designation, the highest designation in Property Management in North America. He earned an Honors degree from the University of Toronto, and he has over two decades of experience in property management.
Power Properties was established in 1980, and is a member of the Canadian Real Estate Association, the Real Estate Institute of Canada, and the Calgary Residential Rental Association. They currently manage over a quarter billion dollars in residential real estate and collect over one million dollars in rent each month.
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