Management Fees

E

ezza

Heya,

I'm looking at renting out my 1 bed unit for the first time and find the whole thing quite overwhelming! :confused: I've found a property manager that I quite like but the fee seems high. Is 11% inc. of GST (for fully furnished) too much? Their fee for unfurnished is 8% + GST. It's looking as though it will rent for approx. $250 - $280 p/ week.

Any advice people can give me about selecting a PM and what to look out for would be GREATLY appreciated.
 
Totally new to this so have no idea, however, their Guide states:

8.5% (+ GST) for an unfurnished property
11% inc of GST for a furnished propery
 
Furnished is theoretically much more work for an agent (eg doing inventory, condition report inspection etc - as well as more maintenance/repair calls to handle)

What city is the IP in? PM fees vary greatly from region to region.

Cheers,

The Y-man
 
The property is in Perth, abou 10 mins North of the city centre. :)

Are management fees negotiable? The unit is pretty small (approx. 50sqm not inc. courtyard) so I wouldn't want to be paying the same as someone renting out a furnished house for example.
 
Our PM in inner west Sydney dropped the rates from 7.7% to 6.6% when they heard that we already had an appraisal done with their competitor. The other justification was that the property was in good condition so it would be easy for them to manage it. Sure it's not a huge difference, but every bit counts.
 
I've not been able to negotiate and I'm in Perth ... but it's only 1 IP that we need a PM for - perhaps those with more than 1 might have success.

Would love to know if any Perth investors have had luck and if so, how many properties we are talking about with the same PM.

Good luck with it all Ezza.
 
Thanks for all the replies. :)

The PM has confirmed that the fee will be 8.5% + GST so effectively 9.35%. It seems high when you consider how tiny my place is so it might be worth asking for a reduced fee. I get nervous when I have to haggle so may need to take someone big and burly with me lol. I have also sent off a few requests for fee schedules from other places so will see how they compare.
 
two words ... haggle hard. In the current environment; PM's are looking for larger than life portfolios to sustain market shares (& indirectly their franchises/jobs/etc). I got my last one down to 5%+GST from 7%+GST
 
Those fees do seem high.. Espeially compared to Melbourne, however I do agree there is more work with furnished properties...

Pay your PM's well, but maybe not that well
 
This fee is very standard for a Perth property manager. In fact we have a furnished property that because it is let short term the property managers end up with 25% of the total income by the time you allow for inspection fees letting fees etc, etc
 
The Y-man said:
What city is the IP in?
Click to expand...


With outrageously high PM fees like that, you shouldn't have needed to ask Y-man.


No doubt the dis-interested PM employee would have yawned and been polishing her nails as she "confirmed" the 8.5% & GST was non-negotiable. It's our 'standard' fee, she would have said.


The only thing to do is yawn back, tell her "Nope - yer standard is grossly inflated" and go and get a real quote from an agency who wants your business. No point talking to the staff, cos they don't give a rats, they get paid either way.


Don't hold yer breath for a decent PM fee in perth, especially if you only have 1 small IP to offer them.
 
I found that the fee they charged was pretty standard here in Perth. Actually I only came across one that was significantly cheaper but seemed dodgy, crappy website, poor response times etc.

Anyways I ended up listing it for $30 p/w more than they recommended and got a tenant within a week of it being put up. I guess this will cover some of the mgt fee. :rolleyes:\

ETA The fee ended up being 8% +GST. It's only furnished with the basics so still attracted their unfurnished rate.
 
Last edited:
Minxdamanx said:
Would love to know if any Perth investors have had luck and if so, how many properties we are talking about with the same PM.
Click to expand...

I have 2 props with one PM in Perth and negotiated (with the Agency Owner at the time) a 6.5% management fee quite a few years ago...fee is still the same today and agency has changed hands a couple times.
 
ezza said:
I found that the fee they charged was pretty standard here in Perth. Actually I only came across one that was significantly cheaper but seemed dodgy, crappy website, poor response times etc.

Anyways I ended up listing it for $30 p/w more than they recommended and got a tenant within a week of it being put up. I guess this will cover some of the mgt fee. :rolleyes:\

ETA The fee ended up being 8% +GST. It's only furnished with the basics so still attracted their unfurnished rate.
Click to expand...

Hi Ezza,

I have a rental in Perth. When I was looking around for a PM I found a huge variation in fees. Most charged a flat 8.5% + GST (management fee) + 2 or 3 wks leasing fee (for 6 and 12 mths respectively), but then they would add on fees for inspections, property condition reports, court attendances, time for arranging maintenance/repairs and then putting together a tax statement at the end of the year.

I ended up going with one which charged 8.5% + GST + 2/3 wks leasing fee + postage/phone (5.50/mth) but which included all the other things above in their management fee.

I don't find paying somebody money to manage the property, but I think that the management fee should include inspections, court attendances, arranging repairs etc - after all it is a management fee not a "rent collection fee".

Kev
 
When I first started out I used to put my props in the hands of 2 or 3 agencies with who ever finds a tenant suitable to me gets the management rights.

They all new they were competing for business :)
 
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