If you are or are considering becoming a landlord you may want to evaluate whether you want to manage your tenants yourself or hire a property manager. There are no laws or rules that prevent individuals from being their own property managers, but if you are hiring one the Real Estate Act requires they must be licensed to provide property management services.
A property manager will source and screen tenants, manage the flow of rent from the tenants to you, and act as a liaison for all tenant interactions. Typically, property managers charge a fee to find a tenant plus a monthly management fee. Many property managers will ask for a year’s contract and deduct their fees from the rents they collect on your behalf. Your property manager will also prepare monthly accounting statements and yearly statements for tax time.
Perhaps the biggest benefit of property managers is they will screen your tenants, check references, and do credit and criminal record checks. Finding good tenants is ultimately the key to being a successful landlord, as a single bad tenant can decimate any profits if they damage or neglect your property.
In BC property managers can only represent the landlords. In other provinces, it is common for residential tenants to have representative to help them source a rental but the BC Multiple Listing Service to date has not created a proper support network for residential rental agents. Commercial leasing, of course, is a totally different ball game.
Most management companies will charge about one half of the first month’s rent as the placement fee for new tenants, and the monthly management fees are generally around 10% of the monthly rent thereafter.
The other more tangible benefit of hiring a property manager is they field all rental inquiry calls, create and post ads, host showings for prospective tenants, and handle any middle-of-the-night calls due to plugged toilets or broken dishwashers.
For some people, though, it might make more sense to manage your own rental. For example, with a basement suite in your own home you may prefer to be the one actively meeting and interviewing your prospective tenants. Or you may be very well connected socially or community-wise, making it easy to be able to connect with a great potential tenant on your own.