I am looking into starting a property management business in the GTA. Can anyone advise on the pros and cons or even if they think it's a good idea.
Basically, any advice would be greatly appreciated. Thanks
I'm not sure you are asking on the right day. I am not always a great fan of property management as a business because it is very difficult to get decent landlords on your book. I have a few decent landlords but percentage wise I get more neurotic ones.
I specialize in renting because the profit margins are much better. Property management is good in the sense that it provides a steady income.
Most of the property management I have done is in derelict buildings with vacancy problems. It is not a mystery why these building collect vacancy the way they do. They suffer from poor maintenance and poor customer service. The owners generally employ a management strategy known as smothering the goose that lays the golden eggs. No money is spend on the building. They are not generous at all with property management fees, they don't pay contractors and those contractors have your number to complain. They also expect you to be on call 24 hours per day, have tons of great and cheap contractors up your sleeve (because when they don't pay the guys you've been working with for years the work still needs to be done... and cheaper). They also don't respect your time, advice, and you have to beg for your pay every month.
The reason I am down on property management these days is because I have been managing 24 townhouses out in Oshawa. When I started a year and a half ago he was willing to sell them for $1,700,000. There was 8 empty units and they were all in bad shape. I convinced him to improve the units and put in new kitchens, I got him a $60,000 grant to change the windows and insulate the attics so over 350 windows cost him about $40,000. In August of last year I was ready to quit again and he decided to sell the building. I made an arrangement with him that I would help him to sell it privately and he would pay me $15,000. We sold in January for $2,300,000 now it looks like he's ripping me off for the $15,000 and the new owner was supposed to continue with me but now he's not as of Friday.
So for me that kind of is a repeat scenario in my professional career. I don't get a bonus or even a thank you or a reference letter. I get no notice and I make these guys richer for really crappy pay. They figure out a reason to justify not paying me and then they do it. Then they get really mad when I say no you can't rip me off.
Boss before that had 80 empty units that I was in charge of filling and I had to take him to the labor board to get my pay and commission. He wouldn't even give me my separation slip and it took me 4 months to get EI.
If I have any advice to give it's stay the hell away from rental landlords and try to get into managing condos. I may be a little more positive in a few days now not so much.
Thanks for your comments Berubeland. Looks like I definitly caught you on a bad day. I just have the one follow up question. When you find the tenants for these landlords do they not automatically ask you to manage the property for them afterwards?
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