All Topics / Opinionated! / 1 weeks "lease renewal fee"

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  • Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    This is a new one to me an wondering if any other LL’s have seen this before……

    Just got the property management contract for a new IP that I’m looking at and noticed that in addition to the normal advertising costs for new tenants, lease prep fee, and 1 weeks “tenant finders fee” I noticed that for renewals that Glenn Regan in Newtown are ALSO asking that for lease renewals in addition to the normal $33 lease prep fee that an ADDITIONAL WEEK Rental for any lease renewals.

    WTF?

    This is in addition of course to their normal percentage fee + gst.

    Just wondering if any other LL here had seen other agencies trying this one on or if this was a new thing? My response of course was thanks….but no thanks and i’ll flip it to one of my other PM’s but wondering if other LL’s had seen this before.

    Profile photo of D.T.D.T.
    Participant
    @dtraeger
    Join Date: 2014
    Post Count: 128

    Hiya,

    Not sure about over there in Sydney as all areas are different, but its very common in SA for there to be a 1.1 week incl gst renewal fee. Are you bothered by the cost or just the label on it?

    You should weigh up the overall cost by factoring in the management fee, monthly admin fee, advertising costs, routine inspection fee, letting fee, renewal fee, etc to see what the actual overall annual cost will be.

    Beyond that you should look at which PM agency is actually best in your area. A difference of plus or minus a few bob in either direction wouldn’t really change this. Ie Circular Quay restaurants cost more than McDonalds but if it was all about cost then the former would have 0 customers right?

    D.T. | DT Property Management
    http://www.dtproperty.com.au
    Email Me | Phone Me

    Adelaide Property Management - whole Adelaide metro

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    It’s quite normal.

    Has applied to all my IPs

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    @dt….a few bob? that’s around 2% annual ROI difference…..

    @jaime, I guess I’m just lucky, none of my PM’s are charging me this and to be honest I’d pull IP’s from any that did try to do this. I think the PM’s do just fine on the 5% weekly cut based on what they do for it.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    @Jaime, I guess I’m just lucky, none of my PM’s are charging me this and to be honest I’d pull IP’s from any that did try to do this. I think the PM’s do just fine on the 5% weekly cut based on what they do for it.

    I don’t mind paying it – I think it’s a reasonable cost for finding a tenant.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    @jamie, I think you misread the post.

    This isn’t the 1 weeks rent+gst for “finding the tenant” this is a new fee that I saw an agent trying to introduce for 1 weeks rent for “renewing” the lease + the $33 lease prep fee.

    So basically for “coming up with the renewal price” and 20-40mins spent calling the tenant asking them to resign a new lease…..this agent is wanting to charge 1 weeks rent.

    Basically 2% of your rent every year even if they did nothing but spend 20-40 minutes resigning the existing tenant……

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Fairly common across the country. If there’s sufficient issue with it, some providers will no doubt market without that fee to gain market share.

    What’s the saying about price and quality though?

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    What’s the saying about price and quality though?

    Probably the same people who have no qualms about paying through the nose for BMW badge instead of a Toyota…..me….I ride the subway :)

    Best $2.75 you can spend and can get you anywhere in NYC in 30 mins and faster than any car or cab.

    My point being is if you don’t care about 2% ROI…..then feel free to keep paying.

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