With such an influx of Ontario buyers in Calgary these last few years, we have often been asked the question – why don’t Calgary realtors do property management?
It seems as though it’s a common occurrence in Ontario for realtors to also manage rental properties for their clients. However, in Calgary, the vast majority of realtors work with clients to buy and sell property only and do not work with landlords and tenants.
We reached out to Andre d’Abadie, owner of Elevate Property Management, to give us the low down on the most pressing questions about rental properties and property management in Calgary.
If you have more questions about management or want a professional management company with great systems in place to help you with your existing rental property, reach out to Andre at (403) 831-9727.
And if you’d like to explore what it looks like to pick up your first rental property, contact us today for a brainstorm session where we can break down the numbers for you!
Q: Why aren’t most realtors in Calgary also property managers?
A: Property managers in Alberta hold a different license than realtors and must belong to a brokerage that offers PM services. A lot of brokerages nowadays are starting to add this service and some realtors are starting to practice property management, however property management requires a lot of time to manage all of the moving parts and many realtors are busy with their sales careers.
Q: What does a property manager do and how much do they charge?
A: A property manager will provide assistance with the entire rental process. Full service includes rent collection, tenant screening, lease signings, marketing the property, moving the tenant in and out and providing a report, handling maintenance requests and providing after-hours services for emergencies (24 hours), holding deposits and paying interest on deposits, providing monthly rental statements and arranging trades for repairs. Property Managers typically charge between 8 to 13% of the rent per month.
Q: Do you have to be a real estate mogul with a number of properties to engage a property manager or can you just have one place?
A: No, definitely not. If you are busy with your own life, using a property manager can assist you even if you only have one property.
Q: Do property managers take on detached homes as well as units in condo corporations?
A: Yes property managers can manage both condos and single family properties. Condo management requires a separate license to manage buildings and condo corporations. PM’s can provide services for commercial and residential third party rentals.
Q: What are some of the biggest misconceptions about property management?
A: It’s a dirty business – the implication that a manager is a “slum lord” is a misconception in the business. Many managers are crucial in providing ongoing maintenance on the property, manage high-end homes and provide a full service. The PM business is honest and really provides a solid service when performed in an organized, professional manner.
Q: Do property managers carry any kind of insurance?
A: Yes, lots of liability insurance. The owners and tenants are also required to carry their own insurance so it provides another layer of protection.
Q: If you were an investor with less than $500k to spend, what kind of property would you recommend in Calgary?
A: Probably a condo in an inner city area or an older attached home that could be used as an up/down suite.
Q: If you were an investor with $500k-$1M to spend, what kind of property would you recommend?
A: A single family home with a basement suite and add a garden suite to it. With the new zoning, the density opportunities are immense.
Q: What should my expectations be for return on investment for a property in Calgary?
A: With interest rates coming down, the monthly costs are reducing, however it is still difficult to have positive cash flow unless you have a larger then 20% down payment. The return on your investment is in the rental paydown of your mortgage and expenses. You own the vehicle and someone else pays it off for you.
Q: What are the biggest mistakes that first-time real estate investors make?
A: They buy “new” homes. The builders charge a premium and the investors are usually under water from an equity perspective. Quite often the area is underdeveloped and a construction zone for the first two years and it causes issues with locating tenants and maximizing rent.
Q: When should someone have a property manager vs managing themselves?
A: Always, in my opinion. Managers will always protect the owner and ensure the property is managed according to the local laws. This will protect the owner’s investment.
Q: What do I do if I need help finding somewhere to rent?
A: Call a property manager or use the local rental websites!
