Placement fees vs no placement fees

Cartref Properties provides rental property management services specializing in managing rental properties in strata corporations. When clients ask about our service they are always asking what is the cost to find a tenant and manage the property.  We have two main fees. The first fee is a tenant placement fee and the second is the monthly management fee.  

The tenant placement fee is normally equal to half of one full month’s rent of the property. Tenant placement includes advertising the property, receiving inquiries about the property and reviewing potential inquiries, showing the property and screening tenants. It has multiple steps involved in the process. 

The monthly management fees are based on a percentage of the monthly rent. Each management company offers a different percentage amount for their management fees.

We have also seen management companies who don’t charge a placement fee, they  charge a higher monthly fee. Our question is which is better for your property. 

Let’s compare two properties rented at $3,000 per month. A traditional lessing fee would equal $1500 for the tenant placement and is a one time fee. 

If one management company charges 6% for a monthly fee it would be $180 per month. 

If the other company charges 10% for a monthly fee it would equal $300 per month. The difference would be $120 per month. If you calculate the difference of $120 per month it would take 12 and a half months to equal the  placement fee of $1500 for that property. What this means is for every month your tenant resides at your property past the 12 and half months you are paying a $120 extra in management fees. 

Our experience is that tenants stay in their rental properties on average for 24 to 36 months. For a tenant who resides in the unit for 24 months that equals an extra $1380 in management fees during that tenancy. If the tenant resides in the property for 36 months that would equal an amount of $2820 in additional management fees during that tenancy.   

When interviewing which property management service provider you are choosing we encourage you to review all the fees you may encounter during the management of your property. 

Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com