Is this PM greedy or what?

[Yerfdog]

I just received a management agreement renewal notice from my PM who are currently managing my two IPs, and almost fell off the chair after reading their fees. The sad thing is I have been with them for years and they said these fees are not negotiable. What do you think? I won't name and shame, but they are in WA.

Per IP:
Agreed Management fee: 9%
Property Condition Report: $247.5
Final Bond inspection: $132
Inventory reports: $165
Routine Inspection reports: $88
Lease renewal: $132
Annual Financial Summary: $0 (surprise)
Court Attendance: $85 Max $450
Postage, Petties, Tel, Fax, Email: A WOOPING $16.5/mth
Charge for attendance at meetings: $85/hr Max $170
Advertisting and Marketing: max $200 / fortnight in print media
Internet ad: $66 / occassion
For Lease sign: $88 / occassion
Title search: $24
Strata Plan search $24
Tenant Enquiry Fees:
(i) $12/person / enquiry for tenancy database checks
(ii) $12 / person / enquiry / credit checks
Other:
(i) Preparation of court doc: $88
(ii) Preparation of insurance paperwork: $166

There is no doubt that low fees is not the only thing I should look at, however, if a PM becomes so greedy and not willing to maintain their existing customers database. See you later.

 

[Rolf Latham]

the good thing is one can vote with their feet

ta
rolf

 

[Property Meister]

fkn ridiculous!!!!

I think your PM may mistakingly think he is a lawyer,

he obviously doesnt need your business or is too greedy if he is not negotiable,

id suggest you take your business elsewhere and tell others to do the same,

and if he agrees to waive them all, just say take another 10% off on top that

 

[Norwester]

Rolf,

the good thing is one can vote with their feet

Generally not in WA.

For some reason they seem to take the cake in PM costs......ahh thats right must be the mining boom......

ciao

Nor

 

[Ian (WA)]

I asked about buying a small hovel in Kensington in 1997 through the local Professionals RE office. I didn't go through with the purchase, but they sent me out a full management rights pack in the mail and it was eerily similar to what you've listed there Yerfdog.......the dollar rates are not that far off what they were way back then.

After coming from Adelaide, where we even today we still have 7% and some nominal fees, to WA it seemed like all out robbery.

Bloody rude!......Shop around and you might find something more palatable.

Ian.

 

[wylie]

Is the 9% just the charge for having a bank account for the rent to go in and passing the money to you once a month?

That seems to be the only thing they aren't charging extra for

Why not self-manage? With that outlandish fee structure, you would need to do very badly at self-managing to outspend the money it will cost you to pay someone to do it.

 

[Dazz]

fkn ridiculous!!!!

I think your PM may mistakingly think he is a lawyer

I'd hazard a guess the Principal of the business has taken both his advice and format structure from his lawyer - yes. The act of writing that the fees are non-negotiable gets in most folk....the others are just argumentative sods and the Principal's usually tell the PMs that they aren't keen on attracting those types of nitpicky clients anyway - "tell 'em to bugger off if they don't want to pay."

he obviously doesn't need your business or is too greedy if he is not negotiable

Par for the course here in WA.

id suggest you take your business elsewhere

Any suggestions ?? You'll struggle.

 

[INVSTOR]

yerfdog, when you say Agreed management fee 9%, 9% of what?

 

[Doovalacky]

9% of gross rent.

yerfdog, Not sure what the agents are like up Perth but Remax have a flat rate fee option that may be worth inquiring about. Good if you have a higher value rental compared to the %.

 

[JWR]

Why are there such differences between different states?

In Sydney I've found it at around 5.5%

I thought my mgmt fees were high in QLD where I have my property (7.5% + GST with one weeks letting fee per tenant - and no other fees).

Is it possible to self manage everything but pay someone to do the inspection for you (if you are from another state?) This would help with fees and probably still ensure a reasonable job is done.

 

[INVSTOR]

9% of gross rent.

yerfdog, Not sure what the agents are like up Perth but Remax have a flat rate fee option that may be worth inquiring about. Good if you have a higher value rental compared to the %.

Thats what I thought the norm was. I didn't realise till I was doing my tax that I'm getting charged a % for the tenants water use and court fees as well as the rent from property managers. (All incoming payments from tenants) Ouch!!

 

[Doovalacky]

Invstor I had agents try to pull the same trick. Check your agreement in my case it said x% of rent not all payments.

9% not extreme for WA last time I checked I was getting quoted between 11 and 12%.

 

[Yerfdog]

Actually it is 9.35% including GST of gross rent.

Yep, I am moving to another PM. Funny that after I notified them that I am leaving due to their fees and not valuing me as a loyal client (I used their buying agency service as well), they told me that I have to give them 28 days notice.................so I can post this online I guess. lol.

 

[Angel13]

I agree with Wylie, you should look at self managing, it sounds like you'd save a lot of money. You could ask for lower rent seeing you won't be paying PM fees which means you'll have people fighting to rent your place.

 

[INVSTOR]

Invstor I had agents try to pull the same trick. Check your agreement in my case it said x% of rent not all payments.

9% not extreme for WA last time I checked I was getting quoted between 11 and 12%.

Yes, it is in the agreement and I failed to notice/understand at time of signing. I had never heard of such a thing and fail to still understand why I would have to pay a percentage for tenants expenses on top of a pecentage for rent and other seperately charged items. I guess what I'm paying for is this: The tenant asks a question, the question gets passed onto me, I answer, answer gets passed back and I'm paying a % of rent for privelege of playing chinese whispers.

 

[Sez]

Wow, Just, wow. Every time a WA management fee thread comes up I wonder how there are any PM's left there, they should all be able to retire at age 35!!

 

[w0nnie]

so if they are presenting an itemised list of most things they will charge for, what is the 9% covering.

lawyers will hit you up for a fee each time they speak to you but generally they aren't also going for a big chunk of your turnover week to week as well.

 

[Goofy]

WOW!!!!!!

Those fees are insane.. as someone has already said if they are charging you extra for every task they do what the hell is the 9% "management fee for"??? I am surprised they haven't charged you for the coffee they need to drink to stay awake long enough to charge you all of those fees!

WA Agents must be absolutely raking in the cash!! I am a big supporter of paying PM's well and not dropping my pants on fees, but PM fees should consist of a monthly management fee, a leasing fee, statement fee and possibly a re-leasing fee (which i don't charge but a lot of agents do) and then any expenses incurred by the agency (such as advertising, credit checks, tribunal application fees).

Excuse me, i need to go and check some flights i am moving to WA to be a PM!

 

[boods99]

WA Agents must be absolutely raking in the cash!! I am a big supporter of paying PM's well and not dropping my pants on fees, but PM fees should consist of a monthly management fee, a leasing fee, statement fee and possibly a re-leasing fee (which i don't charge but a lot of agents do) and then any expenses incurred by the agency (such as advertising, credit checks, tribunal application fees).

Excuse me, i need to go and check some flights i am moving to WA to be a PM!

Goofy, could you please clarify as to why agents charge a statement fee? As far as I am aware, all they do is generate a report via their software and hey presto, there's the statement...much like generating reports in MYOB etc. It literally takes 10 seconds...

For what it's worth, I pay 8.5% managment fees plus GST, plus all the other bits and bobs on top of that (including the statement fee ).

Boods

 

[Goofy]

Goofy, could you please clarify as to why agents charge a statement fee? As far as I am aware, all they do is generate a report via their software and hey presto, there's the statement...much like generating reports in MYOB etc. It literally takes 10 seconds...

It literally takes a LOT longer than 10 seconds - there is the imputing of invoices, checking statements, and a lot of other general accounting practices... A landlord run can take a few hours each time (depending on the number of course - that would be for a run of approx 100 properties) so $3.00 isn't that much when you think about the labour involved. Agents will continue to charge this because we are getting beaten down in our fees everywhere else and despite the common misconception that we don't do a hell of a lot i can tell you that it is 12:04am and i am still working!