Some of the comments in this thread confused me a little. We have 2 situations. A) tenant vacates and a new tenant need to be found. B) A fixed term with an existing tenancy expires, and should or not a new fixed term be entered into.
While I appreciate that landlords look at the monthly management fee and then ask why is a letting fee also applied? We have tenancies where they have occupied for a long time in fact many years and others where the tenancy changes every 6 months. What are the contributing factors?
There is a lot of work involved in reletting to a new tenant. From starting with exit inspection/condition reports photographs etc, following up with the outgoing tenant of getting issues fixed/resolved, then viewings, receiving and vetting applications. Preparing paperwork (to comply with legislation) getting it signed up (which with the disclosure requirements takes time) and then doing bond transfer etc and then finally, reviewing the tenants returned "entry condition reports" comments.
With regard to renewal of a tenancy, yes the PM has to be abreast of "current value" of rents. How do they do that. Each day spend some research time. In QLD we have to come to agreement 60 days prior to expiry on the new rental. Which means we start the process 90 days out. Guess what they ignore us so we have to follow up and follow up etc. They don't see the need to respond until the fixed term is about to expire so the follow up is very time consuming when a LL insists on not having periodic tenancies.
I believe more and more agencies are including percentages of income into salary packages in the property management arena, so attract the best people they can. So give thought to chasing discounts when hiring a PM
ACE, I appreciate that agencies will consider reduced fees when you are a multiple owner, as there are efficiencies an agency enjoys and can then pass on. I tend to think that the LL and PM agency are is some respects forming a partnership. One provides one part, and the other another part. If one believes there is an imbalance then the outcome will not be to "both's" liking in the long run.
I have read in many threads on this forum, as an investor treat it like a business, which I agree with, however while I understand it may refer to remove as much "emotion" as possible, but I also believe it means paying for value. I am not saying that a higher price means better value, I believe most adults can distinguish between price and value.
To the OP, yes its 2 different jobs, and 2 different fees. Think about it, and I am sure you will understand.
