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October 22, 2006 - 5:53 am

My inlaws are looking at buying a park home, but they were told (by park residents) that you can’t get a mortgage for them, you have to get a personal loan. So whatever the difference in % that is I guess.

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October 18, 2006 - 1:24 pm

Western QBE is insuring my vacant property with Landlord insurance, which I will ammend to a bigger policy (by $80) to cover loss of income (rent), malicious damage etc once a tenant moves in.

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October 15, 2006 - 7:14 am

Thanks for your thoughts meakinmaster60, you guys offer great help!
I will remember to keep a cool head regarding PMs.
The buyer agent was fantastic. Very smooth transition from dream to reality and they were always available for queries. I would recommend them to anyone interested in using one. I also used a fantastic mortgage broker. The only point where I hit a snag was with the settlement agent & bank. Countless losing of documents by bank and settlement agent late with payments to everyone! Next time I will use a bank for settlement because they are much cheaper than Settlement agents.
Reno’s completed yesterday, looks great, and should now be able to get $220/week instead of $180 when it was in original condition. Still a big gap between rent and mortgage, but perhaps we can find something with a smaller ratio next time. At least our foot is in the door and hopefully in 20 years time the negative gearing on the property wont be an issue.

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October 13, 2006 - 12:31 pm

I’m a complicated girl ctaing [stitch]
Thanks for the advice. The accountant doesn’t think there is much point in doing a depreciation schedule because the house was built in the 70’s (and not renovated since then – psychadelic rooms). The only new things it will have are a gas cooker ($610) and a security screen with sliding door ($1630 after tenant moves in).
My husband earns a good wage, so it is a shame I didn’t forsee tax benefits.
I will seek out Terryw and enquire further with my lending institution.

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October 12, 2006 - 6:45 pm

Can anyone confirm that if you let the REA arrange everything from carpet cleaning to key cutting (billed to your monthly account), you can still claim it back as a tax deduction easily?
Also, we are negatively geared and the property is in both of our names (with my mum as garaunteer), but I’m not earning a wage. I spoke to an accountant who explained that come tax time, half of the loss needs to be debited from my wage which doesn’t exist. Does anyone know how to get the mortgage in my husband’s name? Would it be after we build enough equity, refinance and get mum out of the picture? [stun]

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October 9, 2006 - 5:34 am

Thanks so much for all the advice! This is a brilliant forum for new investors like me.
I ended up narrowing it down to 2 PMs in the local area that charged less than 9.35% management fee. The cheaper one (8.6% fee inc GST) sent me out a contract and crossed out additional fees and wrote a cheaper price for them all. I decided not to go with him for one reason, his manner over the phone. He cut me off a few times and seemed to like the sound of his own voice.
I have a meeting with the other one tomorrow on site. She charges 8.8% inc GST and is roughly $5 – $10 more expensive for additional charges. They have 0% vacancy rate and the woman was so friendly and professional over the phone, that I have a good feeling she will look after us. They are a small business too, so I’m confident we wont get treated like just another number.
I’ve given up on the flat fee because most REAs want to charge 15 – 16% – might as well buy a DHA house for that
[puke]

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September 26, 2006 - 4:36 am

I emailed agents in the local area via realestate.com.au last night and this is what one of them has sent through:

FEES CHARGED
INCLUSIVE OF GST
Schedule of Fees
Property Management

Management Fees – 9.35% of the gross collection for unfurnished
11.00% of the gross collection for furnished
17.25% of the gross collection for holiday accommodation

Property Condition Report – $93.50 for properties exceeding 2 bedrooms
$66.00 for properties not exceeding 2 bedroom

Routine Inspections – $44.00 per quarterly or $60.50 per half yearly

Bond or Final Inspections – Free of charge

Inventory (Furnished only) – $44.00

Leasing Fee – 6 mth lease is two weeks rent + GST, less one week paid by tenant

12-mth leases is three weeks rent + GST less one week paid by tenant

Note this is charged every time a new tenant goes in

Advertising – $15.00 per article in newspapers.
Rent list, Internet, window all free of charge

Attending Court on – Free of charge
Behalf of Landlord

Postage & Petties – $5.50 per month for one property
$2.75 per month for each additional property

Maintenance – $5.50 – organizes & finalize

Insurance Claims – $27.50 – every claim that we do on behalf of you

Title Search – $16.50 (waived if copy of title provided)

This one states that they don’t do flat fees because it usually ends up being more expensive for the landlord. Another states they will do a flat fee of 14.9% but it will only include management fees, postage & petties and routine inspections. Looks like I’m going to have to brush up on my math and convert charges to a percentage and work out if I’m being ripped off or not. Thanks for the advice so far

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September 25, 2006 - 2:36 pm

Being a beginner and looking at the charges outlined, it seemed a little steep to me. It seems that I need to do some phoning around and ask questions about how they deal with unpaid rent, how fast, do they have regular maintenance workers that they use, how many on books? The house is a 1970s 3×1 on 804sqm. We are currently making cosmetic improvements before we get tenants in there. Would the property manager be the one who recommends the rent to be charged after we’ve finished? This agent is in Mt Lawley (about 50km away from Shoawater), but I was advised by the buyer agent and the selling agent that this is not uncommon for property managers to be this far from the property. Do you guys use PMs who are located closer than that? Would it be an angle of negotiation for using a more local agent by pointing out that they don’t have to drive as far for inspections in petrol expenses in trying to land a flat fee? Has anyone noticed a correlation between what you pay and the service you get?

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September 25, 2006 - 4:43 am

Interesting points of view! We bought the place through a buyer agent, due to the Perth Market being so heated, our lack of experience and feeling overwhelmed. They inlcuded a property managers details in the report in which a draft contract was included. I know that we don’t need to feel obligated to choose them,but it goes like this:
Management fee – 8.8% of annual gross collections/annum
Property condition report @ commencement of each tenancy – $99.00
Final Bond inspection @ termination of each tenancy – $88.00
Routine inspection reports – $49.50 (every 3 months)
Postage/petties etc – $9.90/month
Advertising up to $220.00
Fixed management fee – N/A

Like Terryw, I don’t want to be directly involved with tenants because I know my limitations and I am likely to be taken in by sob stories. To avoid that senario and until I develop more business savy, I feel more comfortable with a middle man.

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January 3, 2006 - 4:38 pm

For real. Thaks for the advice, I’ve got a few different areas in mind and will continue to do research for at least the next 6 months. I hadn’t heard anything about buyers agents until recently on the net, then I found out a friend of a friend went through one. It cost them about $2000 and then one I saw on the net worked out to be nearly $4000! Seems like a fair difference to me and then I found that costs were not easy to uncover on various other web sites. I’m not sure why they don’t advertise this. It made me a little suspicious. [cigar]