Hi
I need to hire a Manager to manage my rental property. Can anyone tell me what the fees might be approx.?
thanksJULES1
Email MeI 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 commissionI’m sure if you get a few quotes you could haggle with them.
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/
Email Me | Phone MeAdelaide Property Manager
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.
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
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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.
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
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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/
Email Me | Phone MeAdelaide Property Manager
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
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
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
JamieI 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
PeterHi 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?
BennyThis 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/
Email Me | Phone MeAdelaide Property Manager
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 | Australia's leading private lender
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