Can you negotiate management fees?

Hi, sorry if this has been asked before...but can you negotiate on the fees?

I have contacted several PMs in western Brisbane and I am really impressed with one but they quoted me 8.8% which sounds high. How does that compare to others?

Also, has anyone negitiated with just one IP or otherwise by saying...I will be buying a number of houses over the coming years so I want a discount so that I bring them all to you. Or is that only something you can do once you have at least 2?

Thanks a lot.
Shona
 
Yes, negotiate but compare the whole package. Anecdotally, I have found Brisbane to be around 7.5%+GST= 8.25%... some have admin fees too.

My admin fee was $6.60 which I negotiated down to $1.10 because I asked for all my statements to be sent via email.

If you get good service, then it may be worth it to pay 0.55% more?
Steve
 
The true test for me is whether a PM can maximise tenancy periods whilst keeping tenants happy and keeping rents up to market rates. Don't let 0.5% or thereabouts significantly influence your decision, unless the other factors all wash out even.

There are other threads which list differing PM management rates.

However, in answer to your question....Of course you can negotiate....:)
 
Yes anything in this world can be negotiated.

We have several dozens clients with multiple properties and certainly discount our standard fees for these landlords.

However do remember that you do get what you pay for in this industry.

Whereabouts in Western suburbs are the properties.
 
Thanks for the replies, everyone.

Tania, we are buying around Indooroopilly, Taringa and Toowong. Does that make a difference?
 
Ok should be able to negotiate 7.5% there i think thats what we charge on all of our properties in those suburbs.

Pullenvale, Chapel Hill and Brookfield is a little more.
 
However do remember that you do get what you pay for in this industry.


.


Some of us pay very little and get much better service than if we payed a lot.

Our 5% flat deal is far supperior than the 8.5% + + + + lack of service that we received from other agencies.

Dave
 
Anything is negotiable and whether you can negotiate or not depends on the agency.

We generally do not negotiate anything with our agency but I do believe that our landlords can sleep better and have more money in their account at the end of a financial year than landlords who's properties are managed by cheaper agents. So, look at the whole package one percent may not make any difference if vacancies are reduced and the rents are always kept at a premium!!!
 
A lot of PM's in inner Melbourne will do 5.5% (inc. GST) if you ask, which is my experience. Some have a statement fee of $3 per month or something like that. The leasing fees will vary, but there are no other real 'hidden fees' with the PM's I use. I have several PM's, with only one property per PM and they all charge 5.5%...but, they all also think that one day 'very soon' I'm going to transfer all my other IP's to each of them to PM :D :p!

I like to diversify amongst PM's and use local PM's too :).
 
Ok should be able to negotiate 7.5% there i think thats what we charge on all of our properties in those suburbs.

Pullenvale, Chapel Hill and Brookfield is a little more.
Hi Tania.

Just curious as to why some suburbs would be charged at a higher rate (management fees) than others by the same agency.

Regards
Marty
 
Hi Boatboy

I am glad that you are happy with the service you are getting for the price you are paying. Realistically the day will come when your managing agent cannot make money at those % rates. Certain some of the smaller property agents around the town are trying to buy business organically without growing through acqusition.

Hi Marty

Couple of reasons why the principals rate different suburbs accordingly:

1) Certain suburbs attract a certain type of client which requires more management.
2) Certain suburbs with high rents mean more time spent at the property on inspections hence a higher % charge is made. On a 2 acres property in Chapel Hill / Brookfield it takes longer to complete the property inspection than a 2 bedroom unit in say Clayfield.
 
Couple of reasons why the principals rate different suburbs accordingly:

1) Certain suburbs attract a certain type of client which requires more management.
2) Certain suburbs with high rents mean more time spent at the property on inspections hence a higher % charge is made. On a 2 acres property in Chapel Hill / Brookfield it takes longer to complete the property inspection than a 2 bedroom unit in say Clayfield.

I have never heard of this!

The higher rent means with the same % you get more money anyway, so why up the %?

Bit unfair I think?!
 
JIT

Maybe unfair but i can assure it goes on in every large agency.

We are lucky that I have the ability and discretion to negotiate with a landlord and most appreciate that.

I can name you a dozen agencies around the City that think they are too big or important to negotiate with a client and adopt the attitude that if you dont like it go elsewhere.

Not bad customer service and you havent even used them yet.
 
I have never heard of this!

The higher rent means with the same % you get more money anyway, so why up the %?

Bit unfair I think?!

I'd think that's unfair too. I have multiple IP's with multiple PM's & have never heard of this. I also have a couple of PM's that charge me "very low" rates & no they are not going out of business, nor do I receive bad service. The worst service I have from a PM is the one that charges the most, but I have no option other than to use them as they are the best of a bad bunch in a Regional area.:(
 
Thankfully on a frum such as this you are entitled to an opinion.

I am just telling you what goes on in the real property management world with a lot of property managers.
 
Hi Boatboy

I am glad that you are happy with the service you are getting for the price you are paying..

Very happy at the level of service thank's.


Realistically the day will come when your managing agent cannot make money at those % rates.

Surely as the rent goes up the REA's slice of the action goes up as well.

When you work it out, at the moment my PM gets about $5000/year for how many hours work?

Not many, I can assure you, not that I have an issue.


Certain some of the smaller property agents around the town are trying to buy business organically without growing through acqusition

My PM is one of the big brand names


Dave
 
A Big brand name = franchise.

PM rates are not set by the franchisee.

I am not picking a fight I am telling you what goes on. I am very glad you are happy with the service you are receiving it gives the industry a good name when a PM gets a compliment.
 
Qlds007
Invt Strategist Broker
Top 250 Join Date: Mar 2005
Location: Brisbane
Posts: 666



A Big brand name = franchise.

PM rates are not set by the franchisee.

I am not picking a fight I am telling you what goes on. I am very glad you are happy with the service you are receiving it gives the industry a good name when a PM gets a compliment.
__________________
Richard Taylor -Residential Mortgage Broker Licensed Financial Planner
Ph: 07 3720 1888
[email protected]

I thought we would have got a bit more Devil speak on your 666 post Richard:D

Slightly confused though, are you and Tania the same poster?

Dave
 
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