Beginner in Property Manager needs HELP! Canada

[Account Closed]

Hello Everyone,

So I have been managing this 38 unit building in Calgary, Alberta, Canada for about 8 months now. When I took over the building it was making 36k gross rent per month and there were 8 vacant units, now the building is fully occupied and making 48.5K a month.

The owner is really happy with my results and the fact that I got a new tenant during this pandemic. He owns a couple of buildings in the city and there is one that has 9 vacant units. I want to manage that building as well but also want to be fairly compensated.

The building that he wants me to manage has 50 units. To give you more data, he is not paying me anything for the building i am currently managing, only free rent. It is sweet because it helped me to save and buy my first rental property but I know that he is saving money with me.

-What % of gross rent should I ask for managing a 50 units building?

-Should I asked for more money if I reach certain milestones? Ex: 0% Vacancy, lease renewal fees.

-What do you think I should add in the agreement?

Any advice is welcome!

Thanks a lot

Juan Coltrinari

[Bjorn Ahlblad]

@Account Closed 8% would not be unreasonable. All the best!

[Jerid Meagan]

@Account Closed,

You should be compensated above an beyond housing - no question there. You did a fantastic job turning the first complex around, which is evident that a good PM is not an expense - they are an investment.

Based on those numbers, gross rents went up $12,500/month (150,000/year), assuming a modest cap rate of 6.5% that is an increase in value of over $2.3MM (don't know the cap rates in Calgary). 

Know your value. Management fees range from 5-10% of gross rents collected (probably lower end on this deal), and then are other fees such as leasing - typically half to a full months rent, who keeps late fees, fees for maintenance, etc.

Build your case and then sell it. 

[Marc Winter]

@Account Closed, question:  are you an employee of this owner, ie does the 'free rent' count as a 'salary'?  Also, are you a licensed real estate agent/broker.

In most of the US (not familiar with Canadian laws) a property manager must either be an employee of the property owner OR, be a licensed RE Broker.  

And yes, 5--10% of gross collected rents is the usual range for a licensed property manager.

[Account Closed]

Originally posted by @Marc Winter:

@Account Closed, question:  are you an employee of this owner, ie does the 'free rent' count as a 'salary'?  Also, are you a licensed real estate agent/broker.

In most of the US (not familiar with Canadian laws) a property manager must either be an employee of the property owner OR, be a licensed RE Broker.  

And yes, 5--10% of gross collected rents is the usual range for a licensed property manager.

 I was wondering the same.  In California, if you are an on-site manager, you don't need to be licensed, but to manage any other properties that you don't own, personally, you need a license.

I would want a fee for getting each unit rented, too, that is vacant, on top of an ongoing fee.  That's where most of the work is.

[Nathan Gesner]

You increased his income nearly 30% and he's not paying you anything?

How much is your rent worth? He gave you free rent while making $38,000 so there's no incentive to work hard and keep his income up.

At a minimum, I would recommend free rent for the $38,000 he was originally earning and then a percentage of any increased earnings. If you took 10% of the extra $12,000 he makes now, that would be a $1,200 bonus.

The 50-unit should be negotiated separately from your current situation and, as other have pointed out, you may have to be licensed or be a salaried employee of the owner before you can manage it.

[Jonathan Yeh]

To be honest, it seems like you are being ripped off here...

you have done a great job, and should be compensated accordingly. 

Agreed with the percentage recommended above, best of luck!!!