Exclusive Management Authority Perth Fees - Is this expensive ?

What do you think of the following? Expensive? Any advice would be good. I wish I hadnt left all the research till the last minute but I guess its better late than never hey. I wont be rushing into signing any contracts until i talk to a few pm's. 2 pm's are coming in the morning. Hope someone will reply to my thread in time. Sorry to leave this so late, work and other stuff has been so busy and time got away from me, time flew past and I guess I got distracted and forgot. ooops


Total of tenants in database are 9000

Exclusive Management Authority
Two year term of agreement - Good idea ? or go for a 1 year contract



Here are the agents fees for services

Marketing and Advertising expenses - On the internet up to a maximum $199

Leasing fee for each new tenancy ? Equivalent of 2 weeks rent plus GST

Management fee is 9.3% of Gross collections

Property Condition report fee at the commencement of each tenancy $210

Final Bond inspection at the termination of tenancy $210

Inventory report fee $110 if applicable

Routine inspection report fee $75 (every 3 months)

Lease renewal/negotiation fee ? equivalent to 1 weeks rent (gross amount)

Annual financial summary required yes/no - $110 per report

Court tribunal preparation and attendance - $99 per hour up to a maximum of $490 per claim against tenant

Admin Fee - $7.50 per month

Meeting attendance - $99 per hour up to a maximum of $495

Title Search fee $22 per search

Professional photography $120

The above agreed agents fees will be reviewed each year of the term or any extension or renewal by an increase of 5%. Eg if an agent fee was $10 and a 10% increase applied then the new fee would be $11
 
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That all looks pretty much on par for perth. Some look a bit cheaper and some a bit higher there.
The more properties you have the better rate you can get.

And some of them will be negotiable. If you dont ask you dont get.

Cheers
 
I've said it before.. I need to move to Perth!

That seems like a HUGE amount to me, but what would I know about Perth?

Let's work on a $300/w property, at the minimum you're looking at $3229.80 p/a or 20.7% of your rental income. This is assuming all figures include GST (I've added GST to the leasing fee already).

For a break down all I've included -
  • Letting fee
  • Advertising
  • 4x inspections p/a
  • Ingoing/Outgoing condition reports
  • EOFY statement
  • Monthly statement
  • Rent collection

I'd suggest getting all the quotes together, and adding up what each agent charges at a minimum per year.

I think you're always best to pay a little more for the best service, but again I'm in a very fierce market where you'd be laughed at for wanting anything even remotely close to those figures.

What strikes me is the fact the contract is on a yearly basis, not sure what's the done thing, but I'd strongly suggest trying to get this back to 3months or so. That way you're not locked in for poor service.
 
That all looks pretty much on par for perth. Some look a bit cheaper and some a bit higher there.
The more properties you have the better rate you can get.

And some of them will be negotiable. If you dont ask you dont get.

Cheers

If those look like Par for Perth then remind me not to play on that course :eek: Like you say they're all negotiable though. Perth PM's really do rip LL's off in comparison to eastern staters.
 
Way do you get for the management fee then? :rolleyes: If all the other stuff is extra, are you paying 9% for them to collect rent and organise the odd tradie?

Just pray for capital gain I guess.
 
I've said it before.. I need to move to Perth!

That seems like a HUGE amount to me, but what would I know about Perth?

Let's work on a $300/w property, at the minimum you're looking at $3229.80 p/a or 20.7% of your rental income. This is assuming all figures include GST (I've added GST to the leasing fee already).

For a break down all I've included -
  • Letting fee
  • Advertising
  • 4x inspections p/a
  • Ingoing/Outgoing condition reports
  • EOFY statement
  • Monthly statement
  • Rent collection

I'd suggest getting all the quotes together, and adding up what each agent charges at a minimum per year.

I think you're always best to pay a little more for the best service, but again I'm in a very fierce market where you'd be laughed at for wanting anything even remotely close to those figures.

What strikes me is the fact the contract is on a yearly basis, not sure what's the done thing, but I'd strongly suggest trying to get this back to 3months or so. That way you're not locked in for poor service.

thanks for the tips :) i'll print this off too.

Yep, I'll compare all the quotes and then decide. Its a 2 year authority to manage not 3 months :confused: I'm not sure where you saw 3 months?

Let's work on a $300/w property, at the minimum you're looking at $3229.80 p/a or 20.7% of your rental income. This is assuming all figures include GST

My pm I have currently cost me $2151 in total management fees for the period July 2012 - June 2013, which was 13.5% of my total rental income.
Wow so this mob are charging 20.7%. It is a lot of money (id say highway robbery) although they do promise very good customer service, but still wow I dont think i'll go with them at 20%. If they can come down to 16% I might go with them.

It will be interesting though to chat with them to see what they offer and to learn some stuff about pm etc, pick their brains.

Thanks again I appreciate it. :)


I'm still at work, i've been researching since 5.30 pm its now just gone after 8pm here. I'm getting hungry i better head off now. Next time i need to plan/prepare better for this. I have some facts and lots of info i have printed as well as some questions i need to ask pms when i interview them.
 
Jesus christ that's high, even for Perth.

Some of those extra fees are ridiculous too (court representation, end of year report).

Anyway, I wouldn't pay more than 1 week's initial letting fee, or more than a token fee for renewals.

For the term of the management agreement, you want as short as possible (no way for 2 years). My preference is a rolling/periodic management agreement which I can terminate with notice at any time (I think its 28 days notice).

Time to self manage?
 
I've said it before.. I need to move to Perth!

That seems like a HUGE amount to me, but what would I know about Perth?

Let's work on a $300/w property, at the minimum you're looking at $3229.80 p/a or 20.7% of your rental income. This is assuming all figures include GST (I've added GST to the leasing fee already).

For a break down all I've included -
  • Letting fee
  • Advertising
  • 4x inspections p/a
  • Ingoing/Outgoing condition reports
  • EOFY statement
  • Monthly statement
  • Rent collection

I'd suggest getting all the quotes together, and adding up what each agent charges at a minimum per year.

I think you're always best to pay a little more for the best service, but again I'm in a very fierce market where you'd be laughed at for wanting anything even remotely close to those figures.

What strikes me is the fact the contract is on a yearly basis, not sure what's the done thing, but I'd strongly suggest trying to get this back to 3months or so. That way you're not locked in for poor service.
And don't forget that they are taking a percentage for all gross collections (not just rent) - so include a percentage for water usage , bond repairs and court costs reimbursed by tenants.
 
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hehe you dont make money! Not in perth! My property is currently ng to the tune of around $1,500 pa after my tax return. If I didnt have to pay management fees it would be neutral.

That's the point. You don't have to pay.

Even learning as you go, it's unlikely you would make a $3000 p.a. mistake if you did self manage.
You have insurance if you needed to use it.

You don't actually think PM's attend to every tenant request, before they engage a tradie, do you?
No..they call up their tradie, and send them out.
All which can be done by an owner.
 
That's the point. You don't have to pay.

Even learning as you go, it's unlikely you would make a $3000 p.a. mistake if you did self manage.
You have insurance if you needed to use it.

You don't actually think PM's attend to every tenant request, before they engage a tradie, do you?
No..they call up their tradie, and send them out.
All which can be done by an owner.

+1.

Its now easier than ever to self manage in WA since the new laws and prescribed lease/forms came into force this July. With a resource like somersoft, and your own obvious diligence, I find it hard to believe that the effort or risk is worth chucking in $2k to $3k a year.

You might even learn something in the process!
 
I don't agree to anything longer than a 3mth PM contract at the beginning so that I can see how they perform. Do NOT agree to 12 or 24mths until you are happy with their performance.

All those fees are negotiable. Mine for example are

Property condition report $165
Final Bond $88
Routine Inspection $66
Lease Renewal $88
Annual Summary $38.50
Court/Meeting attendance if req $88/hr

If you want to reduce your fees then you can
a. negotiate
b. put tenants onto a longer lease - if you have 6mth leases then you are up for the lease renewal fee EVERY 6mths.
c. reduce the number of inspections. Hold one at 6 weeks then 4 or 6mthly there after.

And don't forget to end the lease at a time that you want. For example my tenants are negotiating new lease in a couple of weeks and I don't want it ending Dec or even first half of Jan next year as it means we'll be trying to find a tenant over Christmas so they'll be getting a 14mth lease.
 
wow you guys in Perth sure get screwed. I'd be negotiating HARD for much more satisfactory costs. How hard is it to be a PM in Perth? Similar to Vic and you only need to do a short course? I'm thinking of a career change!
 
wow you guys in Perth sure get screwed. I'd be negotiating HARD for much more satisfactory costs. How hard is it to be a PM in Perth? Similar to Vic and you only need to do a short course? I'm thinking of a career change!

The upside is that our yield is often better if you buy well but yes it's more expensiv here.
It is a short course BUT someone needs to have a full REA license in the company - same as Vic - so you can't just have a solo PM with no REA license.

According to most Perth PMs that I spoke to, break even is around 6.5% plus fees even if they work out of their own home. I have gotten most to agree to around high 7s or 8 through negotiation.
 
I have gotten most to agree to around high 7s or 8 through negotiation.

Is that high 7s or 8, just the management fee which all the other fees (leasing, advertising, etc.) need to be added on to?

Or is it all inclusive at high 7s-8s% of gross rental takings
 
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