First PM - what to look for, and fees?

Hi everyone.

I'm (hopefully) just about to purchase my first IP.

But now I need to look at getting a PM sorted. There is already one managing the property (yes, it's already an IP), but before I decide whether to keep the current PM, or try and find a new one, what are some of the things I need to consider?

Mainly:
(a) what type of fees should I be paying (should it be a % of the rent, or a set $ fee)?
(b) how much should I actually be paying (%-wise or $-wise per week) - what is normal/standard?
(c) what are the types of services that I should really be looking for (and what is just 'fluff', designed to increase their fees, but really isn't necessary)?

TIA
KayTea
 
Grats on getting your 1st purchase under way :)

I'd pretty rarely keep the same PM in place. I'd much rather go and find my own. It's a fairly basic procedure for your chosen PM to take over the existing tenant & lease and have the bond transferred to you.

For fees, I'd probably go and talk to a few and see what they're charging. Most of Brisbane seems to be anywhere between 6 and 9 %. Different ones will charge different additions on top of that, eg some charge for inspections, monthly admin, postage, maintenance, renewals, etc etc

I'd definitely not make price your primary decision. Use the price to determine if they're in the same ball park as the market, but you really need to get a gut feel for someone you can trust, has good property market knowledge, has good processes for vacancies/arrears, etc

Russel Peters and Renee Chad both post on these forums and are PM's in Brisbane. Maybe they're worth a chat?
 
Thanks Dave

I had already read Russell Peter's name on another thread, and I like your advice about considering moving to another PM.

I'll start doing my research…………….

KayTea
 
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Just call a few or arrange a time/place to meet and see how they act and what information they send through to you.

If your experience is anything like mine, there'll be a few you can cross off your list straight away. Eg, don't respond in a timely fashion, have complex fee structures, sound like they dont care or dont have time.

Remember this is a business relationship you'll have for a few years.
 
Vacancies are a huge hidden cost.
I would be finding out the number of days on average that properties are on the market.

Whether they are proactive in showing through prospective tenants before other tenants leave.

How maintenance is handled - how quickly - huge issue in property management.

Hidden costs are all the bs ones - postage, admin fees, lease preparation costs, anything that is not related to either letting or management can be questioned!
 
Hi everyone.

I'm (hopefully) just about to purchase my first IP.

But now I need to look at getting a PM sorted. There is already one managing the property (yes, it's already an IP), but before I decide whether to keep the current PM, or try and find a new one, what are some of the things I need to consider?

Mainly:
(a) what type of fees should I be paying (should it be a % of the rent, or a set $ fee)?
(b) how much should I actually be paying (%-wise or $-wise per week) - what is normal/standard?
(c) what are the types of services that I should really be looking for (and what is just 'fluff', designed to increase their fees, but really isn't necessary)?

TIA
KayTea

Hi Kaytea,

I suggest you don't focus on fees initially. Meet with 3 or 4 first and see what they offer in terms of reports, inspections, systems, experience etc. The most important thing is who would you trust the most with your asset. From there you then weigh up costs and fees.

Good luck!
 
First hurdle for a PM is that they return your calls in a reasonable timeframe. I left a message for one to call me in Melbs and 2 weeks later got a call back. Lot's of excuses... off my list.
 
First hurdle for a PM is that they return your calls in a reasonable timeframe. I left a message for one to call me in Melbs and 2 weeks later got a call back. Lot's of excuses... off my list.

I second that. Also, email replies are key for me. When I was searching for a property manager for one of mine in Melbourne, only ONE agency replied to my email requests. After the rest of my research, I decided to go with these guys.
 
1st PM

Grats on getting your 1st purchase under way :)

I'd pretty rarely keep the same PM in place. I'd much rather go and find my own. It's a fairly basic procedure for your chosen PM to take over the existing tenant & lease and have the bond transferred to you.

For fees, I'd probably go and talk to a few and see what they're charging. Most of Brisbane seems to be anywhere between 6 and 9 %. Different ones will charge different additions on top of that, eg some charge for inspections, monthly admin, postage, maintenance, renewals, etc etc

I'd definitely not make price your primary decision. Use the price to determine if they're in the same ball park as the market, but you really need to get a gut feel for someone you can trust, has good property market knowledge, has good processes for vacancies/arrears, etc

Russel Peters and Renee Chad both post on these forums and are PM's in Brisbane. Maybe they're worth a chat?

Thank you kindly Dave for mentioning both myself and Russell...

This Forum is an amazing forum with so much shared expertise and great insights. Every day one learns so much from fellow investors.

Kay Tea - I will PM you some information about our business. The recommendations from fellow SSs is sound - talk to several PMs and make an informed decision as this is a partnership that is long term.

Russell from Pure offers a fantastic service as well and very generous in relation to sharing his insights. You have many good options to explore

Warm regards

Renee and Martin
 
My first test is whether they pick up their phone when you call. If they don't leave a clear and concise voicemail and whether they call back and how quickly. More than two days to return the call is off the list right away.

Sharing from personal experience with 7-8 different PMs over the years. Some are still managing my IPs, some I would only refer my enemies to them :)
 
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