All Topics / General Property / Rental Management Fees

Viewing 14 posts - 1 through 14 (of 14 total)
  • Profile photo of JULES1JULES1
    Participant
    @jules1
    Join Date: 2003
    Post Count: 147

    Hi
    I need to hire a Manager to manage my rental property. Can anyone tell me what the fees might be approx.?
    thanks

    JULES1
    Email Me

    Profile photo of dtrain28dtrain28
    Participant
    @dtrain28
    Join Date: 2015
    Post Count: 27

    I think it would depend on the area you are in. I was quoted the following in SA
    – 2 x Weeks rent for signing up a tenant + 1 week if they tenant signed a lease extension
    – Advertising at cost
    – 10% of weekly rent as on going commission

    I’m sure if you get a few quotes you could haggle with them.

    Profile photo of JULES1JULES1
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    @jules1
    Join Date: 2003
    Post Count: 147
    Profile photo of XeniaXenia
    Participant
    @xenia-alexarealestate
    Join Date: 2015
    Post Count: 21

    Hi Jules
    Unfortunately property managers are like solicitors and can charge anything for anything.
    Management Fees vary from 4.4% to 11%
    Then there are letting frees, lease renewal fees, fees for routine inspections, outgoing/ingoing inspections, monthly admin fees.

    Cheaper is not always better.

    Have a look at the total package and calculate what you will be paying per week for someone to manage your property – that is the only way to compare between agents.

    all the best

    Xenia

    Xenia | Alexa Real Estate Pty Ltd
    http://www.alexarealestate.com.au/
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    Adelaide Property Manager

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

    1 weeks rental for finding the tenant
    5% for collecting the rent (eg 5.5% with gst)

    They often try and tack on things like advertising fees + account fees + annual statements etc (doesn’t cost them anything so negotiate out if desirable property or bringing more than 1 IP)

    negotiate, negotiate, negotiate……everything helps your bottom line.

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

    Best to focus on getting a quality PM rather than getting the lowest cost option.

    Haggling over a couple of percent will end up being a few tax deductible dollars.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

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

    uhm those percents add up over a few properties. you wouldn’t suggest not bothering to haggle over interest rates as you wont be holding the mortgage for the entire life of the loan.

    yes a good pm who maintains 100% occupancy and gets good tenants/good repair people at reasonable costs are important…..but saying 5% and 7% doesn’t matter as its tax deductible……is silly as it directly affects your potential loan capacity and the result is less properties=less capital growth because you cant service your loan.

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

    uhm those percents add up over a few properties. you wouldn’t suggest not bothering to haggle over interest rates as you wont be holding the mortgage for the entire life of the loan.

    You’re right – it’s just important to not always focus on “lowest” costs. Investors get caught up in wanting the “lowest” everything and often overlook other important facets. Cheap doesn’t usually equate to best.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]go.com.au

    Profile photo of XeniaXenia
    Participant
    @xenia-alexarealestate
    Join Date: 2015
    Post Count: 21

    Good property managers step in and fix issues caused by agents that charge 5.5%

    Xenia | Alexa Real Estate Pty Ltd
    http://www.alexarealestate.com.au/
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    Adelaide Property Manager

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

    Good property managers step in and fix issues caused by agents that charge 5.5%

    why? 5.5% inc gst is plenty. You only need a book of 175-200 properties in order to be delivery revenue for a FTSE inc overheads etc, this means on average you are spending over 1 day per year on the property.

    That’s plenty if you have your processes set up and running efficiently.

    Charging more property management fees isn’t going to guarantee better PM’s

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi all,
    Wouldn’t the rate charged by the agent be somewhat different depending on the rental rate charged in a given area?

    e.g. If 8% were “the going rate” then an agent managing a property in Point Piper for $3000 a week would make $240 a week (for what)?
    Whereas the agent managing a property in Mt Druitt renting for $300 a week makes $24 a week. Is there 10 times more work for the agent in managing the Point Piper property?

    Now, the examples above show two extremes – surely “in the middle of those extremes” agents in differing areas can do quite OK on 5% or 10%, depending?

    Benny

    Profile photo of PetePete
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    @pjewitt
    Join Date: 2015
    Post Count: 50

    uhm those percents add up over a few properties. you wouldn’t suggest not bothering to haggle over interest rates as you wont be holding the mortgage for the entire life of the loan.

    You’re right – it’s just important to not always focus on “lowest” costs. Investors get caught up in wanting the “lowest” everything and often overlook other important facets. Cheap doesn’t usually equate to best.
    Cheers
    Jamie

    I would add to this that expensive doesn’t necessarily mean you’ll be looked after either. I’ve typically paid around the 8% mark over the years, but have paid 11% at one agency, with their service being the worst I’ve experienced.

    cheers
    Peter

    Profile photo of XeniaXenia
    Participant
    @xenia-alexarealestate
    Join Date: 2015
    Post Count: 21

    Hi all, Wouldn’t the rate charged by the agent be somewhat different depending on the rental rate charged in a given area?
    e.g. If 8% were “the going rate” then an agent managing a property in Point Piper for $3000 a week would make $240 a week (for what)?Whereas the agent managing a property in Mt Druitt renting for $300 a week makes $24 a week. Is there 10 times more work for the agent in managing the Point Piper property?
    Now, the examples above show two extremes – surely “in the middle of those extremes” agents in differing areas can do quite OK on 5% or 10%, depending?
    Benny

    This is true Benny – in the back ground most of us work to contract value. The property has to earn a particular income to be worth it for the agency. For a $3000 per week property, 3% or a flat fee may be negotiated and yes it’s all negotiated. If you look for smaller companies they may be more flexible and tailored to what you need and want as a client.

    My initial post re- the 5.5% fees is a personal observation that those clients are easier to convert over to a higher fee after a few years of having experienced the cheaper agents – sometimes.
    The disclaimer here off course is that the ones where everything was going perfectly would not source another agent to switch to.

    Xenia | Alexa Real Estate Pty Ltd
    http://www.alexarealestate.com.au/
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    Adelaide Property Manager

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    It is interesting point Xenia makes and the same comes into play with Sales Commission.

    In Qld the amount an agent can charge for a sale has been recently been deregulated and for anything under say 350K you will find most agents are not charging 3% + wheareas until recently maximum was 2.5% plus $900.

    We regularly get asked by Vendors will we list their property for 1% and the answer is simple …….NO.

    It comes down to the professionalism of the agency.

    Certainly we could act for a lesser fee but it would ruin our Professional name in the area we cover.

    By charging a given amount we can regulate the number of properties we list and provide a better quality service for the vendor who we represent.

    Cheers

    Yours in Finance
    0-40 Properties in a decade. Ask me how.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

Viewing 14 posts - 1 through 14 (of 14 total)

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