5.5% PM fee

[WBG Redcliffe]

Hi all

A friend and I have 11 IPs in the Redcliffe Rothwell area’s. I am thinking of approaching a number of agents and asking for a quote re PM fees. I was thinking 5.5% flat and only one let fee per year.

What are your thoughts is this a bit to low.

 

[buzzlightyear]

Don't tell them a number as you don't know what they might go down to. Get them to provide you a formal response and then you can negotiate further.

Personally, whether its 5 or 5.5% or 3.5%, the 'low' number is sometimes a false economy if you and your tenants aren't getting the service they need.

How are you going to assess the service element of their offering though?

 

[skater]

I am charged 5.5% by one of my PM's. It is a standard fee they charge anyone who has over a certain number of properties managed by them.

 

[Xenia]

The number of work involved in property managment is not reduced because multiple properties are owned by the same person. Each is treated as an individual service.

5.5% from a management agency point of view would barely be scraping in a profit and too much of a business risk to take on! I personally would NOT but it depends how desperate for listings the agency is.

If it is an agency that make most of their profits from sales, they may be willing to on the chance that they may be able to convert at least some of the properties to sales commissions in the future. In this case you need to consider SERVICE!

PM fees are tax deductible and not the biggest expense for property investors. The largest expenses for investors are vacancy rates and improper rent renewals (properties being rented too low for the market). An agency focused on property management and service would be on top of both of these and you will benefit in the long run by having the RIGHT agency rather than a cheap and desperate agency!

 

[jaycee]

In a lot of business, you get better prices if you have more business with them, not everyone does this, but a lot do. Even small businesses, the cafe I go to drops off the change off the bill every time "make it $8 John" all the time.... and the coffee (for me anyway) is always superb..... And it take them just as long to make my coffe as anyone elses, but I go there a good number of times a week, we have developed a friendly relationship so they decided to do this). Now because I like the guys so much, I always put it any chang ein their tip jar as appreciation - and, they are not desperate for business.

besides interest, I think my PM & fees are my biggets expense, I get $20k rent, and pay the PM nearly $2k - nothing else costs more than per annum

of course, the cheapest is not always reliable, but neither is the most expensive, I've bought expesive crap & bought cheap stuff that has lasted longer too, same experience with businesses, the most expensive is not always the best. That cheap Italian restaurant using homemade tomato sauce is often better than the hotel restaurant charging $30 for a plate of spaghetti.

WBG Redcliffe's paln was to select agencies & negotiate a price, I guess he would check the service levels same as we did before we chose our PM's (?) and the only difference is he wants to negotiate a price

 

[toony]

I say go for it. I pay 5.5% for all my properties. When all goes well, the property managers dont really do alot do they. Bank the rent and pay you the difference. Take a few calls. 6 month inspection and rental reviews.

Mine are local so i still manage the property managers.

I said how much for 2 properties and we agreed on 5.5% (include GST) and with the other agency I am a conduit between his agency and the local football club.

 

[JoannaK]

when I ran my real estate agency I offered my landlords a sliding scale of fees commensurate with the number of properties I managed for them. It is common practice

 

[imonmyway]

I pay 5.5% including GST for 1 IP in Melbournes West

 

[GoAnna!]

We get a discount due to multiple properties. The service i get is fantastic although less formal. Instead of flash letters I get quick e-mails and we often make decisions "in bulk". At the beginning of the letting season we decide on rents so that we don't need to look at each one as they come up. Again just 2 - 3 quick e-mails and we are done.

I don't agree that I get poor service with my lowered rates. I seem to be one of the few that is not complaining about PM's on this site. In return I keep my properties in good repair and they let with little fuss. And I am delighted with the level of rents achieved and low vacancy rates. Between us we have nearly tripled the rents since 2001 which means that the PM is collecting very nice commissions as say 5% of $300 is way better than 8% of $100.

Open homes are at times combined, and of course inspections are done at the same time as each other which again saves time (given they are all at the same location)

Given that they are dealing with a "business" they know that I understand the processes as I have been through them so many times. I don't ummm and ahhh over tenant selections, tenant requests, repairs, evictions etc.

 

[skater]

I don't agree that I get poor service with my lowered rates. I seem to be one of the few that is not complaining about PM's on this site.

Hmmm......well I have complained about crappy PM's, but the one that charges me 5.5% is fantastic. Never had a problem. I've got another that charges just slightly more & she is great too.

BUT.....the most expensive one I have is not good at all. Can't get rid of her as it is in a Regional area & they are the best of a bad bunch.

 

[WBG Redcliffe]

Thanks for your replies,

My partner and I advertise for the tenants and show the properties then send the tenants with a blank application to the PM. PM does the rest in relation to selection.

Our properties are mostly under 12months old and we both have the attitude that if we take prompt action with the repairs the tenants will stay longer. All of the older properties have been renovated or are in very good condition and the repairs are made quickly as well.

The PM groups my properties on one statement per month and same for partner.

My day job gives me the chance do the drive by’s on the properties for the agent also.

I think 5.5% is fair.

 

[outbackjack]

WBG

"My day job gives me the chance do the drive by’s on the properties for the agent also. "

I didnt think that Brisbvegas had got to the point of drive bys and Gangsta`s.

WBG which gang are you with homie ure sthside or nthside


Tongue in Cheek

 

[brett & shellee]

on the subject of property management, can anyone recommend a decent property manager in the redcliffe/clontarf area as we're not especially happy with the one we have. thanks in advance..........

 

[WBG Redcliffe]

Hi Outbackjack

My gang is called the QPS. Can't think of a better gang.

 

[Qlds007]

I have just given Tania at Mayfair Realty 20 of our properties on the Northside (Caboolture, Redcliffe, DB etc) and she offered 6% which is very attractive.

She had several of my inner city properties for some years now so i knew the level of service was second to non.

Give her a call on (07) 3262 4533 or 0403 464 048.