Brisbane PM @ 4.4% - Thoughts??

[JoshyBoi]

Hey

Got an (unsolicited) letter from these guys today...

They were offering PM at 4.4% all inclusive, no hidden costs...anyone heard of ProjectPQ? Good/Bad experiences??

The major draw back I see is that they are a small operation, thus might make it harder for them to find tenants, so what you save in PM fees you could lose in vacancy...

 

[wylie]

I wouldn't think it would be hard for them to find tenants, as I would assume they would put anything on re.com which means the tenants would find them.

You could give them a try.... nothing to lose really. Maybe make sure that if you are unhappy, you don't have to give a long notice period to move agencies.

 

[JoshyBoi]

I have no need for a PM atm, was just posting it for others as it appears to be a good offer - hopefully we'll see more of it

I don't know about termination arrangements, but there is a 3 month free no obligation trial...another potential downside is they may load the PMs up with more then they can handle to save costs as a result of the low fee??

 

[urban cowboy]

hmmmmmm

at 4.4% they would need to have VERY low overheads...or a massive rent roll to get the effect of economy of scale.

may be worth a look though - be interested to hear if anyone has used them.

 

[Peterw]

Interesting, when in most locations, the fees charged by agents are generally within say 1% of each other. That equates to say $3 per week difference in the fee charged to a landlord. If it could be done to manage the property, at the same service levels, for half the fee, I would have thought that quite a few would be going down that track. From my observations, it seems to be "newish" type companies that do it. Usually started by people, that were "employed" in the industry up to now, so still can state that they have x years "experience. However, what sort of experience do they have, or have they had, running a property management business. I am a bit skeptical about the comment, that "put in on realestste dot comm, and the tenants will find you. The reason I say that is, the number of people that are at our window each day, as well as those that come into our office and pick up our rental sheets, and make inquiry about inspection times. To me it confirms, that not all tenants have free and easy access to an internet connection, outside an internet cafe. Remember, each day longer the property takes to rent, is costing the LL, say an average of $40 per day. Perhaps it worth doing the maths. I may be in a small pool, but I still feel a high profile shop front, does make a positive contribution.
regards

 

[JoshyBoi]

The difference is more then $3

Considering most are 8.8% - we are looking at half the cost, so on a $400/wk rent, that would be PM fees of $17.60 instead of $35.20...and there is no $400 letting fee or other ancillary fees...the difference is more considerable then $3...

Agreed though that 'x years experience' doesn't mean running a PM business, and i think its also valid that at that price they may load their pms up a lot...alternatively, they could have low overheads and few staff such that they only have a limited amount of resources?

If it were a start up company, this could be the offer for the first few clients to get them established??

 

[WinstonWolfe]

I looked seriously at doing what these guys are doing (resi PM) several times over the last few years. here's why:

- there's an undersupply of rental accommodation, therefore you can pick better quality tenants.
- you can get a good tenant purely with a rea.com listing = less advertising costs.
- rents have moved up faster than inflation and wages = PM net cash flow same.
- like a bank, PMs don't hold risk for most of their stuff ups, it is passed either to tenant or LL.
- many LLs have become used to having all PM expenses passed through, and 'accept' expenses start off higher than income!!!
- Lots of new naive PIers in the market.....most WANT to be passive investors and are glad to be shielded from hassles. They are also more open to using tradies on a PMs preferred list. This can dramatically reduce time demands on PM and underlings.
- the market is flooded by dodgey greedy REAs putting underskilled PMs in control. therefore there's heaps of room for savvy operators to come in and stand out.
- If you run a rent roll, you automatically have a database of PIers who you can sell and buy IPs for.
- Never have I seen PM net profit so amenable to the pros of streamlining systems and processes. Good computer software and office S&P reduce overheards dramatically.....unfortunately many PMs aren't savvy enough to see where systems can be made more efficient.....especially the ones I've dealt with.
- Property maintenance can be outsourced
- Recession proof. If we have an economic downturn, rental demand is likely to grow, not diminish.
- rents follow house prices.

On the above basis, I could see the opportunity to come in and put a cat amongst the pigeons and undercut the industry to get rid of less savvy operators and build market share.

Another group recently started an e-PM business, where they were centralizing PM to service the whole of Australia. I think that was too ambitious and flawed.

Anyway, I think these guys are probably quite savvy. Proof will be in the pudding though, and if it is free to taste, nothing lost.

I'd run them over a few hurdles first.
- ask how many have done, and what they charge, for small claims and RTA tribunal appearances, and providing info and reports for your insurance claims.
- then negotiate them down to a fixed cost for same.
- tell em you want to see their current rent roll.
- ask to see their rent roll software, and the LL reports it generates.

 

[Peterw]

Joshyboi, sorry I think you misread my comments. I started by saying that most PM's are within say 1% of each other, and that equates to say $3, based on the listed average rental of $300. I also have now picked some typos, sorry, not a speed typre, will try to edit and correct.
ww, an another sorry, however I cannot agree with this statement.

- the market is flooded by dodgey greedy REAs putting underskilled PMs in control.

Not saying that there are none out there, however I have heard of them, but dont know any personally. As time has passed, and communication etce improved, "dodgey practices" are to speedilly communicated, and you are out of business.
regards

 

[WinstonWolfe]

Not saying that there are none out there, however I have heard of them, but dont know any personally. As time has passed, and communication etce improved, "dodgey practices" are to speedilly communicated, and you are out of business.
regards

if you are interested PM me and I'll return the names of several, one in particular who is very well known in the western suburbs and has turned over PM staff every 12-15 mths.

 

[Aulyna]

Anyone used them? good or bad?

 

[russellpeter]

The reason i would not use them

http://www.realestate.com.au/rent/by-abckan/list-1
no properties for rent.

They are a commercial company not a Property Management agency
http://www.realcommercial.com.au/for-lease/by-abckan/list-1

offering a small % fee can be dangerous pick up too many $300pw properties and you can soon find yourself out of business not many agencies can run managing properties for $600pa.