About to rent my Unit

In the next few months i will be moving out of my unit and into another which i recently built.
I am leaning towards employing a PM to take care of everything to save any headaches and this will give me the time to slowly acquaint myself with the laws and dealings with tenants and then maybe if it is all worth saving alittle money every month take over as PM myself.
For now i would just like to know what is the current % charged for a RE to manage my property and also how much is reasonable to pay an agent to find me a tenant.
I rang a few agents and they said im looking at 1 1/2 weeks rent to find me a tenant if i choose to manage the property myself after that or 1 weeks rent and then they will manage the property from then on.
I failed to ask how much % they charge to manage it.
Also are these figures negotiable. Is it worth ringing one agency and get then to give me a good deal then ringing others in the area and try to crunch them down to below what the last one quoted me, or is this bad practise on my behalf?

Your imput would be very much appreciated.
 
how much % they charge to manage it.

7.7% is the standard rate
8.8% if they charge high
6.6% if you have 2 properties
5.5% if you have multiple or are a good negotiater
lower than that & they lose interest in doing a good job

The 1 week rent to find is pretty normal.
 
I pay 4.4% inc GST but have 7 with the one PM, inner bayside Melbourne.
Usual fees are about 5-6% plus GST and 1 weeks letting fee.

Don't forget to have the place valued for CGT purposes and also get a depreciation schedule done when you move out.
 
Thanks for the imput

Thanks for the prompt reply commrades!

Wow i thought PM fees would have been around the 5% mark or lower.
Guess like you said it depends on how many properties in a portfolio, as i only have one rental in my portfolio, that isnt enough to get any agent excited or help my negotiation skills much.

Yes i have already contacted Depro to have a Depreciation Schedule, I think they charge $500 for the report.

So you said that i would also need to have the place valued for CGT. Could you please elaborate on what purpose this will serve? and also who does this valuation.

Once again thanks for your input it was much appreciated.

Regards
John
 
Thanks for the imput

Thanks for the prompt reply commrades!

Wow i thought PM fees would have been around the 5% mark or lower.
Guess like you said it depends on how many properties in a portfolio, as i only have one rental in my portfolio, that isnt enough to get any agent excited or help my negotiation skills much.

Yes i have already contacted Depro to have a Depreciation Schedule, I think they charge $500 for the report.

So you said that i would also need to have the place valued for CGT. Could you please elaborate on what purpose this will serve? and also who does this valuation.

Once again thanks for your input it was much appreciated.

Regards
John
 
Whilst your unit is your residence, your property is exempt from CG tax.
As soon as it becomes income earning it is not, so you need to establish a cost base. A market valuation, from a licensed valuer, gives you this figure and any capital gains or losses will be worked out from this figure.
I also believe that the holding costs, such as rates, insurances etc. whilst it was your residence, can also be added to the cost base, but you will need to discuss this with a tax professional.
 
Thanks Morg for your input and advice.
I shall follow up and get the ball rolling as i dont have long before i move.
Thanks once again
John
 
7.7% is the standard rate
8.8% if they charge high
6.6% if you have 2 properties
5.5% if you have multiple or are a good negotiater
lower than that & they lose interest in doing a good job

The 1 week rent to find is pretty normal.

Unless you live in Canberra, In which case 10% is pretty standard and anything less is cheap. :rolleyes:
 
Valued for CGT

Hi All,
Could someone please inform me on the best way to go about getting my IP valued for CGT.
Is it sufficient getting the valuation from a local Real Estate Agent, or is a valuation from a licensed valuer recommended and how much should i be paying.

Regards
John
 
Shall get 3 Agents as per thread

Thanks for the link to the thread Propertunity, i shall get 3 appraisals from RE's.
Regards
John
 
Is it worth ringing one agency and get then to give me a good deal then ringing others in the area and try to crunch them down to below what the last one quoted me, or is this bad practise on my behalf?
I think this is an unethical negotiating tactic in any situation, ie using entity 1's deal/offer to try and get a better offer out of entity 2. Just ask both what their best offer is, letting them know that you're putting this to several entities if you want, and then choose between them. Revealing entity 1's offer to entity 2 to try and get entity 2 to make a better offer is unethical, IMHO. If entity 1 made the best offer, why would you not reward them for submitting the best offer and go with that?

It's also more likely to get the best outcome by just conducting (effectively) a tender. Let's say entity 1 and entity 2 both normally charge 8%, but are prepared to go down to 5.5% to win your business. You ask entity 1 for a quote and they say "because it's quiet we'll go to 7%". You go to entity 2 and say "entity 1 offered me 7%, can you beat that?", and they'll say 6.5%, and you go with that.

Had you asked both for their best offer, without telling them what others have quoted, and told them that you were asking multiple agencies and then picking the best quote, one of them may have gone straight to 5.5% to win your business. One of them may even have gone to 5.25%, knowing that the other will go down to 5.5%.

But when they know you're going back and forth and giving "second bites", there's no incentive for them to make you their best offer. They can simply offer slightly better than the other. Just like an auction doesn't get the top price - it only gets a fraction more than what the second-highest price was. ;)

I actually think very few decisions should be made on price alone, anyway, but that's another discussion. If you are going to do it on price alone, then I think this "back and forth" trying to use offers against each other is unethical.
Is it sufficient getting the valuation from a local Real Estate Agent, or is a valuation from a licensed valuer recommended
Propertunity said:
I don't think you need a sworn val for CGT purposes.
You live and learn! I was quite sure you did need a valuation, rather than an appraisal, but it would appear that you and wylie are correct (again ;)):

From the ATO website:

How do you obtain the market value?
You can choose to:
obtain a valuation from a professional valuer, or
work out the market value yourself using reasonably objective and supportable data - such as the price paid for very similar property that was sold at the same time in the same location.​

If you do go with the latter method, just make sure it does pass the "reasonably objective and supportable" test.
 
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