Melbourne Rental Fees
- Thread starter LoneWolf
- Start date
My letting fee is 2 weeks. Commission is 5.5, including GST.
Statement fees are $3.
From memory, your signboard/internet seems comparable with what I've paid.
Statement fees are $3.
From memory, your signboard/internet seems comparable with what I've paid.
I will climb on my soap box and have a rant about fees. Before I start my rant;
- I am an agent specialising in property management.
- We provide a premium service to our property owners and tenants.
Fees are important, it is an investment property after all, and you want to maximise your returns.
The question should not be, are these fees good. The question should be what level of service are you getting for your fee and can your property manager show me that their fee is justified. An overworked property manager (or a lazy property manager) may cost you more in the long term, both financially due to inaction and to your stress levels by simply not being kept informed and having to chase the property manager.
At a minimum your property manager should; regularly review your rent, carry out routine inspections, follow up on repairs and maintenance, communicate with you and devote proper time to your property. If your property is handed to an overworked property manager who does not have time to do this and you have to chase them, then it does not matter if you are being charge 5.5% or 7.7% you are not getting value for your money.
A premium property manager will do the above, plus discuss with you related property issues e.g. depreciation, insurance, adding rental value to the premises, discuss future maintenance etc.
In regards to signage & advertising costs;
Signboard $ 125.00 is about right. The signboard company we use charge $ 99.00 and we simply pass on this cost.
Internet. This is an acceptable price
- I am an agent specialising in property management.
- We provide a premium service to our property owners and tenants.
Fees are important, it is an investment property after all, and you want to maximise your returns.
The question should not be, are these fees good. The question should be what level of service are you getting for your fee and can your property manager show me that their fee is justified. An overworked property manager (or a lazy property manager) may cost you more in the long term, both financially due to inaction and to your stress levels by simply not being kept informed and having to chase the property manager.
At a minimum your property manager should; regularly review your rent, carry out routine inspections, follow up on repairs and maintenance, communicate with you and devote proper time to your property. If your property is handed to an overworked property manager who does not have time to do this and you have to chase them, then it does not matter if you are being charge 5.5% or 7.7% you are not getting value for your money.
A premium property manager will do the above, plus discuss with you related property issues e.g. depreciation, insurance, adding rental value to the premises, discuss future maintenance etc.
In regards to signage & advertising costs;
Signboard $ 125.00 is about right. The signboard company we use charge $ 99.00 and we simply pass on this cost.
Internet. This is an acceptable price
I am managed by a large agency in Melbourne, great service the pm has an interest in the agency.
Nil Sign Board
Nil advert fee on RE.com
5.5% commission
$3 statement fee
1 week letting fee
I have a few properties with them.
My last rental took 6 days to rent
Nil Sign Board
Nil advert fee on RE.com
5.5% commission
$3 statement fee
1 week letting fee
I have a few properties with them.
My last rental took 6 days to rent
Good question Dave.
On a very simplistic level it comes down to a few points, Communication, follow up, attention to detail.
In the larger picture, we look at your property not just as a rental investment, but where it sits in your wealth creation cycle. We meet (or talk) with our property owners once a year (in addition to the routine inspections, leasing etc) and talk to them about their property, changes and trends in the suburb, changes to legislation etc.
We discuss future repairs and map out short, medium and long term repairs, we have a look at cost benefit analysis of the repairs/upgrades.
We make sure that you are aware of depreciation, insurance, land tax etc. We have end of financial check lists to help your accountant.
Our advertising copy and photos are good. There are strategies in place for slow markets. Timing of leases is very important. The list goes on?
Let me revert to the original 3 points, communication and follow up are the most important, not just with property owners but with tenants and tradesman. At every stage of communication each party knows exactly what is happening, when its happening and what will happen next. This is the same if it is a repair, a lease renewal, routine inspection or a simple phone enquiry.
What you are getting with our office is the confidence of solid reliability, combined with experience and lastly common sense.
On a very simplistic level it comes down to a few points, Communication, follow up, attention to detail.
In the larger picture, we look at your property not just as a rental investment, but where it sits in your wealth creation cycle. We meet (or talk) with our property owners once a year (in addition to the routine inspections, leasing etc) and talk to them about their property, changes and trends in the suburb, changes to legislation etc.
We discuss future repairs and map out short, medium and long term repairs, we have a look at cost benefit analysis of the repairs/upgrades.
We make sure that you are aware of depreciation, insurance, land tax etc. We have end of financial check lists to help your accountant.
Our advertising copy and photos are good. There are strategies in place for slow markets. Timing of leases is very important. The list goes on?
Let me revert to the original 3 points, communication and follow up are the most important, not just with property owners but with tenants and tradesman. At every stage of communication each party knows exactly what is happening, when its happening and what will happen next. This is the same if it is a repair, a lease renewal, routine inspection or a simple phone enquiry.
What you are getting with our office is the confidence of solid reliability, combined with experience and lastly common sense.
Sorry to be sounding negative,
At the end of day, as an investor, my main concerns are:
What are my returns?
How to reduce fees to maximise my return?
Do we really care who lease it out, yes to an extent, but more importantly, the above 2 points
I guess it should matter what sort of rent you are charging as well (thats another reason why different areas charge different fees). For example if my house was $650 per week at 5% I'd be paying $28 per week.
But if my house was $350 per week but I was getting charged 8% (3% MORE) I"d still be paying $28 per week.
Even though my business is about helping self managers, I can understand Domus points.
If you Buy a cheaper TV your savings (returns) are higher (short term) and you still get to watch TV but if you get a better TV yes you pay more for it but that TV may last twice as long and give better sound and visual display.
*Sorry if this is a bad example haha*
By managing a property better - your long term returns will be better.
Here's one example:
By having a better tenant your returns are higher. You may not realise straightaway but over time (and this is not a sprint) your tenant stays in the house longer, they take better care of it and makes your life a lot easier. All this reducing your outgoings - Increasing your return.
There are more points I could make but this is enough to read!
But if my house was $350 per week but I was getting charged 8% (3% MORE) I"d still be paying $28 per week.
Even though my business is about helping self managers, I can understand Domus points.
If you Buy a cheaper TV your savings (returns) are higher (short term) and you still get to watch TV but if you get a better TV yes you pay more for it but that TV may last twice as long and give better sound and visual display.
*Sorry if this is a bad example haha*
By managing a property better - your long term returns will be better.
Here's one example:
By having a better tenant your returns are higher. You may not realise straightaway but over time (and this is not a sprint) your tenant stays in the house longer, they take better care of it and makes your life a lot easier. All this reducing your outgoings - Increasing your return.
There are more points I could make but this is enough to read!
Lone Wolf,
You ask two important questions
What are my returns?
How to reduce fees to maximise my return?
I think the questions should be
How do I maximise returns and
How do I reduce risks.
In my above post I concentrated on communication, follow up etc as these are the areas where we receive the most positive feedback, a common response is ?you get things done?. That is not to say that returns are forgotten about.
In regards to maximising returns
It is not a question of reducing fees, it?s a question of reducing your losses and also adding value to your property
Example. Largest loss of income is at change over of tenancy, due to vacancy period. How do you limit this?
- It starts when you first put the tenant into the property. Make sure that the lease end dates falls at a peak time, e.g. if the property suits students then at the beginning of the university term, if the property is near the water, then spring/summer is better then winter. There are definite peaks in the rental market, time your vacancy to the peaks.
- Get your initial pricing right.
- Have quality copy & photos.
- Have strategies in place for slow markets.
The list goes on?.
If it takes an extra week to lease your property due to your PM being overworked, lazy, not getting the price right, or tenant providing limited access that is the equivalent of your 5.5% management costing you 7.7%.
Your PM should also be talking to you about how to add value to your IP, however this can be discussed in another post.
You ask two important questions
What are my returns?
How to reduce fees to maximise my return?
I think the questions should be
How do I maximise returns and
How do I reduce risks.
In my above post I concentrated on communication, follow up etc as these are the areas where we receive the most positive feedback, a common response is ?you get things done?. That is not to say that returns are forgotten about.
In regards to maximising returns
It is not a question of reducing fees, it?s a question of reducing your losses and also adding value to your property
Example. Largest loss of income is at change over of tenancy, due to vacancy period. How do you limit this?
- It starts when you first put the tenant into the property. Make sure that the lease end dates falls at a peak time, e.g. if the property suits students then at the beginning of the university term, if the property is near the water, then spring/summer is better then winter. There are definite peaks in the rental market, time your vacancy to the peaks.
- Get your initial pricing right.
- Have quality copy & photos.
- Have strategies in place for slow markets.
The list goes on?.
If it takes an extra week to lease your property due to your PM being overworked, lazy, not getting the price right, or tenant providing limited access that is the equivalent of your 5.5% management costing you 7.7%.
Your PM should also be talking to you about how to add value to your IP, however this can be discussed in another post.
Here is what use to charge:
Sign board $150
Internet $0
Letting fee 1 weeks plus gst
Lease renewal: 1/2 weeks rent plus gst (but rarely charged it as I personally didn't agree with it)
Commission 7.7% plus gst
Statement/stationary fee: $0 as I sent statements out via email only.
Sign board $150
Internet $0
Letting fee 1 weeks plus gst
Lease renewal: 1/2 weeks rent plus gst (but rarely charged it as I personally didn't agree with it)
Commission 7.7% plus gst
Statement/stationary fee: $0 as I sent statements out via email only.
Why would you charge signboard fee of $150 when you can reuse the same signboard for years for multiple properties?
If you don't agree with lease renewal fee, the. Why have it in the first place?
Signboard fee:
Sorry I should have made it more clear the signboard fee was actually the whole marketing fee. However our signs were the BIG ones that had to be professionally put up. So there was a significant cost to the agency to pay for the guy to go out there and put them up and then take them down on request.
Lease Renewal:
Was not my business, the boss was very pro on these lease renewals. Extra cash the boss could splash.
