Is this PM charge reasonable

[flosed]

I got a quota from one PM of blacktown/Mount Druit area.

5.5% management fee
5.5% calculating water usage
$5.5 per statement(twice a year)
$20 annual financial statement
27/hour attending tribunal/court
70/hour processing insurance claim.

Is that reasonable? I know we could negotiate. Just want to have some baseline while shopping around. The $5.5 per statement sound ridiculous to me . Is it necessary?

 

[Propertunity]

What you have there is a VERY good deal. If the PM Company is any good, I'd be signing up to that quote ASAP.

 

[JWR]

Compared to most other states/areas - it seems more than reasonable.

In QLD for example they charge 8% + GST + letting fee and the usual other fees etc...

We have it easy in the competitive Sydney market!

Maybe just ask for the annual $20 fee and postage charges to be waived (if they send by email).

The insurance/court costs are not likely to happen so don't worry about those.

 

[AlmostBob]

Compared to most other states/areas - it seems more than reasonable.

In QLD for example they charge 8% + GST + letting fee and the usual other fees etc...

We have it easy in the competitive Sydney market!

Maybe just ask for the annual $20 fee and postage charges to be waived (if they send by email).

The insurance/court costs are not likely to happen so don't worry about those.

re above:: yep, and if they do, in the scheme of things, it is always less than you think; we have to go to tribunal for EVERYTHING

 

[matto_]

Great rates. norm that I hear of is round the 7-8% mark.

How can they stay in business at these rates? How many props would they need to make it viable and would that detract from the service individuals are receiving?

 

[flosed]

I have 2 properties BTW. I got quota lower than this. But not sure about that company.

Anyway , thank you very much . Will make 2-3 ring call to make my mind.

 

[Propertunity]

Great rates. norm that I hear of is round the 7-8% mark.

8.8% are usually the 'botique' full service guys
7.7% is 'standard'
6.6% is offered if you purchased the property from the same agency or some BA pressures the PM on their client's behalf.
5.5% is you offer them 2 or more properties to manage
Although I notice in Sydney's Inner West (Ashfield) they offer 5.5% to any LL off the street (must be a very competitive marketplace for them).

How can they stay in business at these rates? How many props would they need to make it viable and would that detract from the service individuals are receiving?

I get a really good rate - but the deal is - no letters just emails. 2 x inspections per IP per annum - no cost. No advertising costs. The one agency now has all my IP's (a lot more than 2) - and it seems to work for them & me. But my properties are generally easy to manage - few maintenance issues as they have had full renos after I purchased them. And if something needs fixing, it gets done quickly and with a min. of fuss: my response to requestes is either "I will get my tradie to do it" or "you handle it, I'm busy".

 

[JWR]

As a side note Prop,

As someone who values your opinion highly - would you mind sharing how many IP's you have, where they are and why you bought them in those locations? I think an interview from Y-Man is warranted

 

[bluray]

8.8% are usually the 'botique' full service guys
7.7% is 'standard'
6.6% is offered if you purchased the property from the same agency or some BA pressures the PM on their client's behalf.
5.5% is you offer them 2 or more properties to manage
Although I notice in Sydney's Inner West (Ashfield) they offer 5.5% to any LL off the street (must be a very competitive marketplace for them).


Hi Prop,

Are those percentage GST inclusive or not?

Thanks

 

[womble66]

mines 7.7% incl GST and I would say as his quoted figures are the full number + 10% (eg. 5+(5x10%)=5.5%) then they would all be GST inclusive.

 

[Propertunity]

As a side note Prop,
As someone who values your opinion highly - would you mind sharing how many IP's you have, where they are and why you bought them in those locations? I think an interview from Y-Man is warranted

Y-man has already requested an interview, which is in progress.

 

[Propertunity]

Hi Prop,
Are those percentage GST inclusive or not?
Thanks

Figures are GST inclusive.

 

[The Y-man]

Y-man has already requested an interview, which is in progress.

Honest, I did not prompt JWR to ask!

The Y-man

 

[C-mac]

I agree with others on here; you have a great deal.

Stick with them.

Also remember, if possible (and if in the same city), that as your portfolio grows, you can negotiate further discounts if you get the same PM to manage several properties.

 

[Propertunity]

Honest, I did not prompt JWR to ask!
The Y-man

I started and then got overly busy on the BA side of things - getting it all under control now and will restart shortly....