PM - Does this seem too expensive?

[dmb1978]

Hi all,

We have a house in Canberra and the PM charges are as follow:

Management Fee: 9.9% plus GST
Establishment Fee 2 weeks rent plus GST
Re-Letting Fee: 1 weeks rent plus GST
Renewal Fee: 1/2 weeks rent plus GST.
Advertising: $256

Our previous tenant did not renew and they advertised for new tenants online and had a new family signed up within a week.

I have received my statement and cannot speak to PM until Monday but have been charged a "Letting Fee" which appears to be 2 weeks rent at nearly $1300 plus the $256 advertising.

My question is would this scenario be a Re-Letting as it appears they have charged another establishment fee. Given that the "Letting Fee" doesn't appear anywhere in the contract should I be arguing for a Re-Letting Fee instead?

I am hoping i shouldn't have to pay $1500 every time i get new tenants.

Thanks

 

[Darlogus]

Hi all,

We have a house in Canberra and the PM charges are as follow:

Management Fee: 9.9% plus GST
Establishment Fee 2 weeks rent plus GST
Re-Letting Fee: 1 weeks rent plus GST
Renewal Fee: 1/2 weeks rent plus GST.
Advertising: $256

Our previous tenant did not renew and they advertised for new tenants online and had a new family signed up within a week.

I have received my statement and cannot speak to PM until Monday but have been charged a "Letting Fee" which appears to be 2 weeks rent at nearly $1300 plus the $256 advertising.

My question is would this scenario be a Re-Letting as it appears they have charged another establishment fee. Given that the "Letting Fee" doesn't appear anywhere in the contract should I be arguing for a Re-Letting Fee instead?

I am hoping i shouldn't have to pay $1500 every time i get new tenants.

Thanks

Seems extremely high, although I don't have a property there so it may be the norm, but I doubt it very much.

 

[Tano]

This is what i am paying (Perth average)

Management Fee: 8.5% plus GST
Establishment Fee None
Re-Letting Fee (new tenant): 1 week for 6 months, 2 weeks for 12 months
Lease Renewal Fee: None
Advertising: $50
+ Postage/Petties each month

I think Syd, Melb etc average around 6.5-7.5% for the Management Fee

 

[dmb1978]

Thanks, I think the management fee is fairly standard but i am just hoping there is an error and it goes back to one week plus GST. At this rate my actual rates are cheaper than having a new lease.

 

[Brett R]

2 weeks rent plus an advertising fee of $256 sounds very expensive. I'd try and renegotiate your fees. You might be surprised what you get if you ask.

 

[dmb1978]

Thanks, yeah will try to get a better deal but it seems great PM's are hard to find so if price is the only issue at the moment is it better the devil you know??

 

[DistinctPM]

Ouch! Those fees are expensive (even for Canberra). To give you a comparison, we (distinctpm.com.au) are a Canberra based Agency managing approximately 200 properties....we aren't a discount provider and owners and tenants can access everything online (at no extra charge)

Management Fee - 7.3% (inclusive of GST)
Letting fee (1 weeks rent + GST) - waived if you find your own tenants
Lease Renewal Fee - $96.80 (incl GST)
Advertising: $149 (which is the rrp for Allhomes in the ACT)

We do charge $151.25 (incl GST) to prepare an inventory & condition report (one off charge).

Fees in Canberra are generally more expensive than in other States (staff costs are much higher), but more better priced alternatives are coming in to the market and are offering better service, more accountability and better value for money.

You should always make sure you are getting value for money, if your current Agent can't justify why they charge more then you should put the pressure on them to look at a discount for you.

I'm not an advocate of switching Agents just based on price alone, the knowledge your PM has in regard to the history of your IP and their relationship (assuming this is positive) with the tenants is definitely worth something.

Sorry if this comes across as a 'plug' for Distinct, but I think it is fair to provide comparisons when asked

 

[AYK]

Hi dmb1978

The charges seem high. Is it for a two year lease?

We have two PMs for two different IPs in Canberra. We use different PMs because of different locations.

PM1:
Management fee - 8% + GST.
Inventory & condition report $100 + GST.
Letting fee - 1 weeks rent or equivalent + GST.
Lease renewal - 1/2 week rent + GST or equivalent.
Advertising $30 + GST per insertion (first two weeks no charge for initial tenant). $149 insertion to websites.
Admin fee - $8.00 per disbursement + GST.
Termination fee: 2 weeks rent if there is a fixed term lease.

PM2:
Management fee - 8% + GST
inventory & condition report $150 (inc GST).
Letting fee - one year lease: equivalent to one week's rent (+GST); two or more year lease: equivalent to two week's rent (+GST)
Lease renewal fee - $99 (inc GST)
Advertising – allhomes website – at cost
Admin fee - $6.60 (inc GST) per month
Termination – no cost; but need 30 days’ notice.

 

[luckyone]

Ouch! Those fees are expensive (even for Canberra). To give you a comparison, we (distinctpm.com.au) are a Canberra based Agency managing approximately 200 properties....we aren't a discount provider and owners and tenants can access everything online (at no extra charge)

Management Fee - 7.3% (inclusive of GST)
Letting fee (1 weeks rent + GST) - waived if you find your own tenants
Lease Renewal Fee - $96.80 (incl GST)
Advertising: $149 (which is the rrp for Allhomes in the ACT)

We do charge $151.25 (incl GST) to prepare an inventory & condition report (one off charge).

Fees in Canberra are generally more expensive than in other States (staff costs are much higher), but more better priced alternatives are coming in to the market and are offering better service, more accountability and better value for money.

You should always make sure you are getting value for money, if your current Agent can't justify why they charge more then you should put the pressure on them to look at a discount for you.

I'm not an advocate of switching Agents just based on price alone, the knowledge your PM has in regard to the history of your IP and their relationship (assuming this is positive) with the tenants is definitely worth something.

Sorry if this comes across as a 'plug' for Distinct, but I think it is fair to provide comparisons when asked

Just so you know, on your site it says in one part that fees are 7.3% inclusive of GST, but under fees it says it is exclusive of GST.

From your site:-

Fees

Distinct Property Management’s regular management fee is 7.3% exclusive of GST. Typical Property Management fees in Canberra range from 8% anywhere up to 15%, yet in other states it is much closer to 7% inclusive of GST. Why pay more simply because your property is in Canberra?

 

[DistinctPM]

Thanks Luckyone. I missed that, I've just updated it - our fees are definitely 7.3% (inclusive of GST) - (6.64% ex GST).

 

[jenni_nextplace]

Ouchhhh, sounds like you have signed up with the most expensive Real Estate agency in the country. Are you helping pay for all those politicians perks..

 

[Peterw]

Knowing a few agents in Canberra, I can confirm that with the commonwealth being a big employer in town, and paying very high wages, staff costs in agencies there tend to be higher as a consequence.

 

[dmb1978]

Thanks all,

We have just purchased another property which will be managed by a different PM agency so was going to see how that one goes before I make any decisions. But it seems from all the responses we can be paying heaps less.

I don't mind paying for good service but i must say i have sent an email asking about the high amount not mentioned on the contract and it has been 4 days and no reply but i did receive a marketing email from PM's direct email.

With the figures Distinct has provided we would save over $20 a week on management fees alone just on one property.

The tenants have only been in for 2 weeks on a 12 month lease so the relationship wouldn't be that solid. The previous tenants never raised any issues for the whole year so have no idea how the PM fairs with repairs etc.

I'm not one to bother a PM as no news is good news but when i have to chase up something wrong on an invoice most months I feel I am not getting much value for money.

Will be checking out the Distinct website.