PM discount

[jonesy427]

Hi all,
just thought i would post up here to remind everyone just to ask the question. i was going through my PM management contracts and gave them a call, asked if there is anything that they can do about it (discount wise) and they rang back an hour later knocking off 1%.
so it doesnt hurt to ask the question. worst they would say is sorry there isnt any room to move (or similar).
regards

 

[russellpeter]

I would have to agree

I just took over a property from an agent that was managing a $700pw property at 9% the owner called and said they are changing companies and the PM said we are now doing our management fees at 5% if you are interested in staying. nice thanks you tell me after 2 years of management at 9% a saving of $1456pa

 

[Sez]

Depends how high your management fees are!!! While I do agree that many agencies will knock the price down, don't get annoyed if they can't move on it, I work for a small agency and we keep our costs low, however, if someone asked to reduce their management fee I would have to introduce incidental fees (which I currently don't charge) to accommodate the lower management!!

 

[ali]

I have never had any trouble negotiating 1-2% off rates and getting other fees removed (eg 1.5 weeks rent to release the property to the same tenants!) It hasn't seemed to compromise their service.
Cheers Ali

 

[jonesy427]

Depends how high your management fees are!!! While I do agree that many agencies will knock the price down, don't get annoyed if they can't move on it, I work for a small agency and we keep our costs low, however, if someone asked to reduce their management fee I would have to introduce incidental fees (which I currently don't charge) to accommodate the lower management!!

but it doesnt hurt to ask. if you cant move on it chances are your rates are already low enough. just want to encourage others to ask the question.

 

[Don K]

I tried a couple of times but did not go well. They did not even waive $5.50 monthly admin fee. I do not mind paying a bit more if they do a good job but 4% cut would be great.

 

[Sez]

but it doesnt hurt to ask. if you cant move on it chances are your rates are already low enough. just want to encourage others to ask the question.

I completely agree that people should ask, I would attack the incidentals first though such as the monthly admin fee, statement fee, sundry fee, accounting fee, END OF FINANCIAL YEAR STATEMENT FEE!!! (I dislike that one the most), easier to get these knocked off sometimes that the management fee. In the agency fees I have had experience with I find the incidental charges to be far more of an issue than the management fees .

 

[Dazz]

if someone asked to reduce their management fee I would have to introduce incidental fees (which I currently don't charge) to accommodate the lower management!!

Fantabulous - can I do business with you - please.

I'll ask for a 1% drop in PM fees, you say you can't do that, but you will drop the PM fees by 0.5%, saving me as the Owner $ 100 per year on a $ 400 pw rental. Then you introduce all of your incidental fees of $ 65 per quarter for inspections, $ 6.00 P&P per month, then a re-let fee of 2 weeks rental.

Sounds like a bargain - I'd go for it - sign me up Johnny !!

 

[Sez]

Not quite Dazz - I don't charge admin, statement, end of financial year statement, VCAT attendance, routine inspection charges, re-leasing (to same tenant) etc. etc. etc. and I only have a flat fee for leasing for all properties which includes all advertising, documentation, photos etc. etc. To be reducing the management fee I would have to introduce some of those things (but not too many). Obviously we want the landlord to make money on their investment so we don't want to take all of their profit in our fees but we are a business too and have to make sure we are able to cover our costs!!!

Besides, I do offer a management discount for multiple properties

 

[jonesy427]

more PMs should offer that kind of thinking SEZ.
2bucks+GST for my statement even if its emailed! gimme a break.

 

[russellpeter]

discounts should not go on what % you go off what the weekly rent is.

when I was working for someone else before having a flat management fees

I would discount my fees if your property rented for over $450pw

but if it was a rental at $300pw you would pay normal fees

Why at $300pw 8% you pay $1248pw at $450PW 8% you pay $1872pa

same job more profit so can discount

 

[Sez]

Thanks jonesy - I find emailing is very easy and it costs nothing, why charge my landlords for something which is of no additional cost to us????

 

[jonesy427]

because they can and often do.

side note im pretty darn happy with my PM atm. got notice to vacate last week from one of our tennants. PM called and advised us, increased the rent and put up on net, called today saying they want to let it out! not even a week and its still tennanted until the start of next month. so little if any vacancy period.

 

[jaycee]

Not quite Dazz - I don't charge admin, statement, end of financial year statement, VCAT attendance, routine inspection charges, re-leasing (to same tenant) etc. etc. etc. and I only have a flat fee for leasing for all properties which includes all advertising, documentation, photos etc. etc. To be reducing the management fee I would have to introduce some of those things (but not too many). Obviously we want the landlord to make money on their investment so we don't want to take all of their profit in our fees but we are a business too and have to make sure we are able to cover our costs!!!

Besides, I do offer a management discount for multiple properties

Then someone asking you for a discount should perhaps, since that is the case, get a better answer than a "warning" about bad work for a low price mate which is a bit how your previous email came across... we dont know how good a job you will be doing in comparison to the cheaper company either

 

[Beau Miller]

Fees are always tricky as often the fee negotiation will happen even before the PM has a chance to prove themselves.

I would prefer to offer the first month free as a trial period so that the landlord can decide if I am worth the money or not..

Then I have two rates. An ALL INCLUSIVE % (no hidden fees) and a PAYG option (lower % rate and then additional charges).

I agree with your thoughts here Sez and have tailored my package to offer a choice.

Russel I worked for a flat fee agency for some time and it worked fantastically because we were only in the prestige market with $500pw+ properties. I have no doubt this appeals to owners would love to hear how you go.

Its great to see the PM industry finally has some variations out there and that this forum almost keeps owners in check with their options. Keep it up!

 

[Sez]

Then someone asking you for a discount should perhaps, since that is the case, get a better answer than a "warning" about bad work for a low price mate which is a bit how your previous email came across... we dont know how good a job you will be doing in comparison to the cheaper company either

Sorry Jaycee, not at all how I intended to come across. I agree that to start with, new clients may have little to go on as to how my performance will be, this hasn't been too much of an issue so far as most of my new business has been referrals. While it is true that you get what you pay for my fees are quite competative by keeping a flat rate and removing incidental costs compared to other agents who will reduce their management fee below mine. Add up all your statement fees over the year for example and you will find it makes up a large portion of the difference in management fees. If any one ever feels they aren't happy with my service they are free to go!

It is true that there are good agents and bad agents and price isn't always the best indicator for this (but it is common enough for a lot of people to come to that conclusion)! I didn't mean to sound as though I was 'warning' people, what I try to say is "I just can't meet their management fees, you can of course engage someone at a lower price and if you find you are unhappy please feel free to get in touch"

Besides, honesty is the best policy!

 

[jaycee]

Sorry Jaycee, not at all how I intended to come across. I agree that to start with, new clients may have little to go on as to how my performance will be, this hasn't been too much of an issue so far as most of my new business has been referrals. While it is true that you get what you pay for my fees are quite competative by keeping a flat rate and removing incidental costs compared to other agents who will reduce their management fee below mine. Add up all your statement fees over the year for example and you will find it makes up a large portion of the difference in management fees. If any one ever feels they aren't happy with my service they are free to go!

It is true that there are good agents and bad agents and price isn't always the best indicator for this (but it is common enough for a lot of people to come to that conclusion)! I didn't mean to sound as though I was 'warning' people, what I try to say is "I just can't meet their management fees, you can of course engage someone at a lower price and if you find you are unhappy please feel free to get in touch"

Besides, honesty is the best policy!

Sez,

I am not questioning YOU
Neither is the orignal poster

He just asked is this a good deal ?- and the answer is not going to be automataically YES CAUSE YOU ARE BEING CHARGED A LOT the answer is going to be IT DEPENDS IF HE DOES A GOOD JOB AND IS NOT OVERCHARGING YOU FOR THAT JOB

exactly what the original poster wanted help with working out...

 

[Sez]

Sez,

I am not questioning YOU
Neither is the orignal poster

He just asked is this a good deal ?- and the answer is not going to be automataically YES CAUSE YOU ARE BEING CHARGED A LOT the answer is going to be IT DEPENDS IF HE DOES A GOOD JOB AND IS NOT OVERCHARGING YOU FOR THAT JOB

exactly what the original poster wanted help with working out...

Sorry Jaycee, I think we got our wires crossed - my original response (to the OP) was one of definately give it a go and then in addition if your PM won't reduce your management fees then try to get the incidentals knocked off your PM's price as they can be easier to neg. with than the management fee.....?

 

[jonesy427]

now now children. (lols)

i get where you both are coming from, and thankyou for your time and expertise in commenting. it is very much appreciated.

 

[Michael A]

What I am hearing from this thread is there is still no real choice regarding the cost of property management services. You pay the full fee for the full service. It will just be added up differently. Why doesn’t the real estate industry put a cost to each part of a property managers roll and let the vendors decide what parts of the service they value and want to pay for like other true professions do?
For example if the landlord wrote the ad, what's this worth? Or conducted the inspections, took their own photos, prepared the condition report, conducted the routine inspection, coordinated the maintenance etc. Put a cost to each task and let the landlords choose the service level they want. My bet is all these costs will be justifiable for 75% of landlords to have the full service. What options do the remaining 25% have? Not many.