property management fees

Can anyone give me an idea of what property management fees one should pay? I have agents giving me varying fee amounts from 6.6% to 8.8% plus GST??
Thanks
samjames

That's pretty much right on the ball.

Why don't you trust what the property manager says?

This thread does right into detail about the property manager fees on different states accross Australia.

Click For Detailed Property Managers Fees Australia Wide

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Interested in Joint Venture Reno Projects

Thanks jaffasoft for your reply. I have heard from another investor that 8.8% plus GST is high. The property I am worried about is handled by an agent who hasn't given me a lot of faith in them - whe I bought the unit I gave it to them to manage and they didn't pick up that the tenant had given notice (even though they were the selling agent - a good lesson for me NEVER to assume) so it wasn't advertised as available unitl the tenant had moved out. They then told me it was advertised on 2 sites but when I looked they were not on there and I had to notify them!!?? Then I had to drop the rent because of no tenant and they found a tenant and I asked for confirmation when the lease was signed but no response. Communication quite frightening. I just don't feel at ease. Whilst their management fees are low I am wondering if it is worth it ?
Thanks again

samjames,

I pay 5.5% (GST included) and I could not be happier with my agent. I have 3 properties with them.

Check out what service is (supposed to be) provided before you sign up. And also ask how many they have on their rent roll. A good PM is worth paying for if it means less and shorter vacancies, higher rent, happier tenants, and no problems when tenants move out.

Also good to find one recommended by someone independent of the PM or the agency.

Mum

SamJames,
Unfortunately Property Managers come in Great!, O.K. and Too-Awful-To-Describe-On_This-Forum...

I would also suggest you get what you pay for. I am always sceptical about the Fees they charge and don't mind letting them know I expect Prompt Efficient Service. Some Landlords don't care. As a result some Property Managers feel ALL of them don't care. I had to sack one of mine recently as I got a notice from the Council informing me that the Lawn on one of my Properties (which is tenanted) was FIVE FEET HIGH and If I didn't rectify it I was up for $1500.00 PLUS a COURT APPEARANCE PLUS the cost of the council coming in and doing it. The funny thing is the date the council inspected the property as per the complaints just happened to coincide with the date that my PM Allegedly did their inapection and found the property to be in Perfect Condition! Then they asked why I was unhappy. I faxed through the Council Letter whilst on the Phone to the Principal and the silence was deafening! They even waived the 90Days exit AND had the Lawn Mowed at their expense. I'd probably be inclined to think that they had a job advertised in the Positins Vacant section that Saturday too!

Do your homework, meet with them and find out what you're paying for. I would also suggest you, go as far as letting them know your expectations and have them note it on the computer.

Stuart Milne
Non-Conforming Specialist
READY Mortgages
www.readymortgages.com.au
stuartm@readymortgages.com.au
Mob: 0404 056 055

Thanks for the advice - much appreciated.

samjames

Generally 7-8% seems the norm. maybe less if you have a few properties with the one agent. But in WA things seem different, prices are much higher there, and they have invented many additional charges.

Terryw
Discover Home Loans
Parramatta
Terry@discoverhomeloans.com.au
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Watch for those additional charges. How much will it cost for a changeover tenet, advertising fees, % on repairs they organise.
They are in business to make money, it is up to us to ensure we get quality service.
Remember the sqeaky wheel gets the oil.

I was quoted 8.5% but negotiated it to 7% (plus GST) as i had four units available for lease

Hi, Have you thought of running it yourself?
www.thelandlord.com.au is an excellent site to help you run and manage your own property - keep the money yourself!!

We pay 5.5% inc GST for our country Vic properties and no charge for a new lease with same tenant or for any advertising. In Richmond (Vic) they wanted something like 8 or 9% so we did it ourselves.

With the letting managers I think if helps if you call into their offices every now and then - this also helps keep in touch with the market generally and also any good properties coming up for sale.

As with tenants, I think small incentives help such as a christmas present or small thank-you gift if they sort out a problem or get a new tenant in.

Originally posted by mum:

Check out what service is (supposed to be) provided before you sign up. And also ask how many they have on their rent roll. A good PM is worth paying for if it means less and shorter vacancies, higher rent, happier tenants, and no problems when tenants move out.

Also good to find one recommended by someone independent of the PM or the agency.

Mum

I personally have had a couple of run ins with my property managers and have found that the reason you do not get the service is if you get hte answer of hte question I alsways "now" ask any prospective property manager...
Does your company sell property? - The answer gets me interested or poliley ending the call.
If they sell houses as a core part of the business... then wehn it comes to push and shove ... the director does not spend as much time with the end of the business that is not making the 80% of hte income in the business!
...when you really think about it ... most businesses will spend time with the answer to this: ...
If 80 percent of the revenue of the business is earned by 20% of the clients..... only spend the time on the rest of the business on a need to basis.... business management 101!.....

- Don't the truth Hurt?! ... Proper Professional Property Managers do not sell anything... they look after the clients as it is thier life blood... they charge more and you get better service... gaurenteed!
BEACAUSE YOU ARE PART OF THE GROWTH PLAN OF THIS BUSINES AND NOT RELIENT ON THE SALES SIDE OF THE BUSINESS TO PROP UP THE REST!!!

I remember when I was working for the largest TELCO in the world and this was exactly ... the philosophy! I got burned a few times and then worked out how th game was played .. and life has been better since!!!!

Why Rent? Rent 2 own!
www.rent2ownaus.com

- but what about the fact that if you buy properties from the sales side of the business then the lettings side will bend over backwards to give you great service so that you go back and buy more properties (they hope) - which in turn, you rent out through the lettings side.

That's the theory anyway. I suppose ultimately it depends on how the two sides of the business work together and how much importance they put on the lettings part - I agree that often the lettings side is not given the same priority that the more profitable sales side gets.

well theree ya go!

Why Rent? Rent 2 own!
www.rent2ownaus.com

If you're concerned that you're paying too much, can't you look into your other options?  It's not going to hurt to call around and see if you can find a lower rate for your property management services.  I own several self storage buildings , and it took me a while--and a lot of shopping--to figure out which management company to go with.

As a relocation consultant in Melbourne, i have met 100's of property managers... There are a handful of very good ones!!.. The rest don't care.. A good agent should be available to show anyone your property that is interested within a short time of expressing interest.  These ridiculous open inspections for 15mins once a week don't work.. So if you have a property with an agent that is not renting, suggest you mystery call them and see how long it takes for someone to get back to you, let alone get out of their chair.
That's their job to lease your property asap..

It also depends what state you are in! Perth is very expensive, Sydney the cheapest. But the difference in 1% comm on a $500pw property is $5pw so concentrate on obtaining the highest rental possible. In melbourne use www.maxrent.com.au to ensure you are because worrying about 1% while the property is marketed for $30pw below market rent is pointless!

A flat fee independent of rent increases (lower than that of a house if you own an apartment) makes sense to me.

I believe that a percentage fee structure incorrectly assumes that it takes more time to manage an apartment with a higher rent so the costs are higher. It takes the same amount of time to manage both a $400/week and a $800/week apartment yet with a percentage based fee, the property with the higher rent is charged over two(2) times the management fee of the lower priced property.

I also believe an apartment takes alot less time to manage than a house rented for the same amount as a Strata Manager shares the management/maintenance burden.

Checkout www.managemyapartment.com.au if interested.

Hi,
I've used RRent in Melbourne for around 11 years now and I cannot recommend them highly enough, I had a newly renovated apartment that got flooded and I got a call from the property manager the day after it happened to tell me the carpets had been replaced and the painting was being done that day. Thats what i call good management. Their fees are also very reasonable.
Trish

Hi all

I am in WA and the standard is 8.5% plus gst, I negotiated 8% inc gst, so around 7 3% ex gst. I will be able to get that a little lower if I add to my 2 properties.

John