If you’re a rental property owner in Ottawa, you likely already understand the challenges of managing rental properties. Self-managing can be demanding as it often requires significant time and effort. Whether real estate investing is your full time focus, a piece of your larger investment strategy, or a lifestyle choice, juggling all of the tasks associated with being a landlord is rarely easy when you’re going at it alone.
Many property owners choose to leverage property management services to alleviate this burden. However, the question of property management pricing might be the crucial factor influencing your decision.
What Does Property Management Cost?
If you’re trying to decide if property management is a worthwhile investment for you, you may be wondering about the cost of property management services. It’s important for the cost of property management services to fit within your budget so that you can maintain a reasonable profit margin on your rental property, all while ensuring you get the quality of service you deserve.
So what do property management companies charge in Ottawa?
Some companies charge a fixed or monthly fee, however a percentage based fee is more common. We’ve seen monthly property management fees up to 12% of the monthly rent.
Tenant placement services are also an important consideration. These services help real estate investors and rental property owners find ideal tenants for their vacant or upcoming units. These fees can vary, typically going up to a fee of the equivalent of one month’s rent, per year of tenancy. DORE offers dedicated, full time leasing consultants that are available 7 days a week. Furthermore, DORE also offers MLS postings that allows your property to have extensive visibility to prospective tenants notwithstanding the fact that they also cooperate with realtors to assist in finding you the ideal tenant.
Exploring Property Management Pricing Models
There are several common pricing models that most property management companies offer. These models can vary depending on the services offered and the specific needs of the property owner. Here are some of the most frequently used pricing models that you may encounter when shopping around for different rates.
Percentage of Rent
One of the most frequently used pricing models for property management services is fee based on a set percentage of the rent price. The actual percentage will vary depending on the type of property, the location and the current market conditions. One of the advantages of this pricing model is that the fee is correlated to the rent price, making it easy to consistently budget for as rent prices fluctuate over time. DORE charges a percentage of rent collected – rather than a flat fee or a fee regardless of whether or not the unit is collecting income.
Flat Fee
Some property management companies charge a flat monthly or annual fee for their services. Property owners pay the same amount regardless of the property's rental income — this can however be a disadvantage when the market conditions are not favourable. Another downfall to this model is that there is no incentive for the property management company to seek ways to increase rental rates.
A La Carte Pricing
Another common pricing model is when property management companies offer a menu of individual services, such as tenant screening, property inspections, or maintenance. Each individual service is charged as a separate fee, allowing property owners to select and pay for only the specific services they need most. However, it’s important to understand that in order to be successful, different aspects of your property management need to flow together. This fragmented approach can sometimes lead to inefficiencies or issues, and in most cases, higher expenses in the long run.
While there are many different pricing models, these are some of the most frequently used by property management companies. At DORE, we believe that a percentage based management fee is the most ideal solution, creating expense predictability and enabling for the improvement of your rental property’s performance.
What to Look Out for When Comparing Property Management Quotes
Seek Out Comprehensive Property Management Services
When comparing property management quotes, it's important to carefully look over each quote to ensure you're getting the services you need. First, compare the services offered by each company. Tenant screening, property maintenance, and rent payment collection are fundamental services that should typically be included in the property management package. Additionally, other services like regular property inspections, lease agreement preparation, handling evictions, and financial reporting should be considered depending on your specific needs and the type of property you own. The more comprehensive your property management services, the better.
Understand Property Management Contract Terms
Make sure to carefully read over the contract terms, including the duration of the agreement, services provided, fees, and any additional terms. As a property owner, you know that things happen. Tenants leave, market conditions change and damages can occur to your property. It’s important to clarify what would happen in each of these situations and find out what the fees are before signing.
Don’t Underestimate the Value of Expertise
It’s important to choose a property management company that is knowledgeable in important matters like the RTA (Residential Tenancies Act), compliance, leasing legalities, and responsible tenant screening practices. This is where rental expertise comes into play. Working with a property manager who has dealt with many of these situations first-hand means that you can rest assured that your properties and tenants are being handled with the utmost care, and with the aim to remain in compliance with all necessary regulations. Look for a property management company that has a deep understanding of the local real estate market, including rental trends, pricing strategies, and local tenant demographics.
Choose a Responsible, Reliable Property Manager in Ottawa
Arguably the most important factor when choosing a property manager is ensuring they are reliable. After all, you’ll need to know you can depend on them to protect your valuable real estate investment! Be sure to research each company’s reputability and experience. Look at their Google reviews and how long they have been in business. Working with a property management company that has years of experience and has built strong local connections can go a long way in ensuring the success of your rental property.
Consider Customer Experience
When choosing a property management company, it’s important to take into account the type of working relationship you’d like to have. You’ll be working very closely with them over time, so seeking out a company that prioritizes the customer experience is key. We understand the struggles busy property owners face, which is why we are constantly improving our services. We invest over a million dollars each year into providing you with the absolute best service. Our goal is to take the burden of property management off your shoulders, and build strong relationships with each and every one of the property owners we work with – so that we can continue to support you for years to come.
Get a Quote for Residential Property Management in Ottawa with DORE
With over 20 years of experience managing residential rental properties in the Ottawa area, we offer property management services you can trust. Investing in property management services with DORE is investing in a stress-free future for you and your portfolio. Get a quote for property management services today!