Assistance re breaking pm contract

[shacara]

I have just signed with a pm for the first time and all is going well. As murphys law suggests, I have found a tenant for my ip by myself. In relation to the letting fee. Do I still have to pay same or can I now go and negotiate with the pm or is it a case of I have signed so bad luck. Also, I am now wanting to manage the property myself. What fees do I incur with the pm? and can I get out of the contract?. If I choose to get rid of the pm, will they still charge me the letting fees and the ongoing management fees etc. In short, Has the MP got me over a barrel

Hope someone can give me an urgent reply

Thanks
Shacara

 

[JoannaK]

Hello Shacara,

Firstly, you'll need to let us know the state your IP is located in as each state has slightly different laws.

Also, in the meantime, try doing a quick search or read of the PM forum as you'll find heaps of info relating to your situation.

 

[JamesGG]

Shacara,

This will depend on the type of lease authority you have signed with the PM.

It's my (somewhat limited) understanding that if an 'exclusive' lease authority has been signed, then the PM gets their leasing fee regardless of who introduces the tenant to the property. If a 'general' authority, or a 'sole agency' authority was signed, then you've got plenty of room to move as these are designed to pay the leasing fee to whomever finds the tenant - in this case, you.

If you're unsure about what kind of authority you've signed, or didn't even realise there were three different types, chances are good that you're on an exclusive agreement.

As far as self-managing, this also depends on what was written on the authority form. But, you may well find that the agent will let you out of the management without too much of a fuss, however they may at least try to retain the leasing fee if possible.

Mind you, the laws are different in every state, so if your property is outside of Victoria then the situation may be a little different.

Cheers,
James.

 

[Mitzi]

Hi Shacara

I have just signed with a pm for the first time and all is going well. As murphys law suggests, I have found a tenant for my ip by myself. In relation to the letting fee. Do I still have to pay same or can I now go and negotiate with the pm or is it a case of I have signed so bad luck. Also, I am now wanting to manage the property myself. What fees do I incur with the pm? and can I get out of the contract?. If I choose to get rid of the pm, will they still charge me the letting fees and the ongoing management fees etc. In short, Has the MP got me over a barrel

Hope someone can give me an urgent reply

Thanks
Shacara

Think very carefully before you take on your own management and be sure you understand the Residential Tenancies Act applicable to your state.

Although I have many years of PM experience, I have a competant PM handling my properties. I really don't want to have to look for tenants, screen them, organise the electrician or plumber or have to do inspections etc. I understand what needs to be done and keep an eye on it all - as any responsible owner should do - but I can go away and not worry if the tenants are vacating or making too much noise or a few days behind with the rent. There is also the intimacy I wish to avoid. I have trouble asking for money for myself ( if the tenant is out of work or there are medical bills, I don't want to be the nasty landlord demanding the rent, do you?). The cost of a PM is really small considering what they do (I know, I know... some DON'T but there ARE good ones) as it is all tax deductible. I have always negotiated letting fees and if they really want your business there is room in most cases - have you asked? The other advantage I find is at tax time when the yearly statement is posted with all the ins and outs listed so it is cheaper and far less hassle when dealing with the accountant. It is your own decision of course but just thought I'd mention a couple of things you may not have thought about.

Good luck

Mitzi

 

[Michael Yardney]

Shacra
Listen carefully to what Mizi is advising you.

DO you want to be a landlord or a property investor?

Landlords collect rents, clean up mess fix leaking taps etc -not very exciting

Property investors learn how to maximise their time and find great deals, improve their negotiation skills, learn how to use tax effective structures etc.

I know it is tempting to try and save a few dollars in agents commission, but you should be able to use your time more effectively than by landlording

 

[shacara]

Thank you all for replying. I will take it all on board

Shacara