That's not really true mate
PM fees 3.3% in Western Sydney?
- Thread starter RetireRich101
- Start date
That's not really true mate
Yes it is unbelievable low. This is a similar situation when you're happy with your bank but temptation grows when you hear about the low rate another smaller lender is offering... But I wanted to hear any crappy service/dodgy services they're doing..
It may be that the owner of the business want to get as many as Landlord in their tenancy database as possible, even at a lost year after year, in hope that when Landlord sells they would use them as the selling agent, just my guess.
How often people use the same PM company for management and selling?
Don't forget there is also a relet fee that will generate additional income for the PM. Say it is relet once a year (12mon tenancy contract) on $400/week rent. That is approx $40k income added to PM. I personally think there isn't much work to do for a tenancy renew, and get charged 0.5 to 1.5 week for it.
As for turn over of staff at the PM company, it is not uncommon to see you're dealing with different PM in the same company even you're paying 5.5% or 7.7%. It isn't the best job in the world to deal with demanding landlord and rude tenants.
It may be that the owner of the business want to get as many as Landlord in their tenancy database as possible, even at a lost year after year, in hope that when Landlord sells they would use them as the selling agent, just my guess.
How often people use the same PM company for management and selling?
Don't forget there is also a relet fee that will generate additional income for the PM. Say it is relet once a year (12mon tenancy contract) on $400/week rent. That is approx $40k income added to PM. I personally think there isn't much work to do for a tenancy renew, and get charged 0.5 to 1.5 week for it.
As for turn over of staff at the PM company, it is not uncommon to see you're dealing with different PM in the same company even you're paying 5.5% or 7.7%. It isn't the best job in the world to deal with demanding landlord and rude tenants.
What makes you think this?
There is a lot involved in finding a tenant.
I can think of: Taking photos and editing the wording for the online listing, the sign posting, showing the property during the week or attending open house on Saturdays, reviewing of applications, discussion with tenant & screening, checking references, checking payment ledger from previous real estate agent, discussion with the landlord, signing the contract & moving in inspection
yes, that part is the hard earned dollar.. but what about the same tenant renewing his/her lease every 6 or 12months? There is that charge typical 0.5-1.5 weeks as well, that I say the easy dollar.
when you go to the dentist........................
Actually........ a great tennant with a simple renewal, pay the fee and be grateful.
The money is made in the acquisition of a great tennant in the first place, so perhaps dont begrudge the few cost cover dollars here.
Dont take it the wrong way, but just me perhaps, your view comes across as you'd rather have poor tennant that runs away at renewal, be vacant for a while so the PM "earns their keep".......
This might not win me any friends ( and I have less and less as I get older and simpler and more direct ) ........ for many a focus on what builds their portfolio pays MUCH larger dividends than chasing a few hundred in maintaining the same.
ta
rolf
In a nutshell that's basically it. Except maybe 6 monthly or yearly inspections. Of course if you got a problem tenant there may be more work
Why would a tenant do this?
This never happened to me over many many years
but I think if it did I would only have to pay a lease preparation fee.
If your management agreement with the agent has such a fee listed and you don't like it, tell them upfront and cross the fee out before you hand the form back to them
I think different PM operates differently and how much they charge for tenant renewal upon lease expiration.
It is not uncommon to charge 1 week even to renewal of the Lease upon expiration of the same tenant..
Looking through a few of mine, it appears to they're doing the same, ie take 1 week rent on renewal...am I being ripped off?
I thought it was nasty when a rent was $600, and they took out this amount for a renewal when there is no advertising, inspection etc.
It is not uncommon to charge 1 week even to renewal of the Lease upon expiration of the same tenant..
Looking through a few of mine, it appears to they're doing the same, ie take 1 week rent on renewal...am I being ripped off?
I thought it was nasty when a rent was $600, and they took out this amount for a renewal when there is no advertising, inspection etc.
My thoughts on the 3.3% fees:
So....the income from the management fee alone isn't exactly high, but you've got the lease fees to add to this. How much are they charging for this? 1 week, 2 weeks? You can bet your bottom dollar there is a fee for this.
Then there's probably a fee for paying accounts on your behalf as well, fees for inspections, fees for Data Base searches, fees for photo's, fees for tribunal, fees, fees, fees, fees.
At the end of the day, the 3.3% will NOT be 3.3%
So....the income from the management fee alone isn't exactly high, but you've got the lease fees to add to this. How much are they charging for this? 1 week, 2 weeks? You can bet your bottom dollar there is a fee for this.
Then there's probably a fee for paying accounts on your behalf as well, fees for inspections, fees for Data Base searches, fees for photo's, fees for tribunal, fees, fees, fees, fees.
At the end of the day, the 3.3% will NOT be 3.3%
I looked at a property for sale, listing agent was different. PM was these guys.
Listing agent said they were in the process of transferring the management over to them.
Listing agent said they were in the process of transferring the management over to them.
I will make enquiry to them and find out.
Note:
This low fee is not offered to anyone with just 1 property, he mentioned its only offered to a people with multiple property but dont know how many.
Also I am currently happy with Lang Simmons on fees and services, so am not prepared to move, unless someone where say they're that good.
I was previously with Harold, then they sold business Starr Partner charging me 7% fee. Service wasn't that proactive as well. Then I moved to a cheaper rate with Laing Simmons 5.5% but better services.
I never charge for a lease renewal, part of the service I offer but do charge 6.6% management fee. But if looking for anew tenant 1 weeks rent plus gst.
I have a PM in western sydney. 7.7%.
They weren't the cheapest, but they've been pretty good so far.
If you're interested, msg me. I am rather busy atm and don't surf somersoft that much.
They weren't the cheapest, but they've been pretty good so far.
If you're interested, msg me. I am rather busy atm and don't surf somersoft that much.
This may be old info now but may be worth considering anyway.
In 2009 my company did some market research looking at management fees charged to investors across SA. We looked at heaps of rent statements to calculate the total amount of money paid out to agents.
We found that on average 17% - 19.1% of a properties gross yearly income went into the management of that property. (not including maintenance). Even when the management fees were 7.7% The rest of it wast the "additional fees".
We did not look at 3.3% or 5.5% agents at that time only the standard 7.7 -9.9% agents were looked at.
I had a general manager at that time looking at all this info, I can't remember much about it but remember being shocked at the figure.
Keep in mind that a one week letting or re-letting fee is another 2% off your annual income.
In 2009 my company did some market research looking at management fees charged to investors across SA. We looked at heaps of rent statements to calculate the total amount of money paid out to agents.
We found that on average 17% - 19.1% of a properties gross yearly income went into the management of that property. (not including maintenance). Even when the management fees were 7.7% The rest of it wast the "additional fees".
We did not look at 3.3% or 5.5% agents at that time only the standard 7.7 -9.9% agents were looked at.
I had a general manager at that time looking at all this info, I can't remember much about it but remember being shocked at the figure.
Keep in mind that a one week letting or re-letting fee is another 2% off your annual income.
^^^^^^^^THIS
The commission on incoming rent is only half the story and with many PMs, even less than that. For example, if your PM charges a week's rent each time a lease is renewed to a new tenant, then that's a 2% extra "commission" that you are paying that I am not paying.
EDIT: I meant renewed to a sitting tenant, not a new one. Every PM (except perhaps for that "flat-rate" agency?) bills at least a week for new tenants as far as I know.
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I'm a little late to the thread, only just saw this now... 
Only interaction I've had with Andrew Merton real estate was when we were looking at purchasing a property from them in 2013. Andrew was there and he told us things I wouldn't expect the agent to tell us. Circumstances around why the owner was selling, what he expected the seller to sell it for, etc. At the end of meeting him, we went away feeling as though he was working for us and not the owner. Obviously he wants a quick sale but it didn't feel right, and I told myself if I ever needed to sell a property in the area, I would not use his agency. Also, if you look at their advertising (which YOU had to pay for) it's large advertising, that features the name of the real estate agency, their photo and the fact that they are 1% plus GST. Seemed like they were advertising themselves more then they were the house. On top of all this, when we were making an offer, it was incredibly difficult to make an offer on the house.
On another note, once that house did sell, the sign stayed out the front for probably more then 6 months with a "sold" sticker on it. Again, this made me feel like they were just wanting to advertise themselves.
That's just my opinion from my dealings with them in 2013. I've had no contact with their property management side of things.
Only interaction I've had with Andrew Merton real estate was when we were looking at purchasing a property from them in 2013. Andrew was there and he told us things I wouldn't expect the agent to tell us. Circumstances around why the owner was selling, what he expected the seller to sell it for, etc. At the end of meeting him, we went away feeling as though he was working for us and not the owner. Obviously he wants a quick sale but it didn't feel right, and I told myself if I ever needed to sell a property in the area, I would not use his agency. Also, if you look at their advertising (which YOU had to pay for) it's large advertising, that features the name of the real estate agency, their photo and the fact that they are 1% plus GST. Seemed like they were advertising themselves more then they were the house. On top of all this, when we were making an offer, it was incredibly difficult to make an offer on the house.
On another note, once that house did sell, the sign stayed out the front for probably more then 6 months with a "sold" sticker on it. Again, this made me feel like they were just wanting to advertise themselves.
That's just my opinion from my dealings with them in 2013. I've had no contact with their property management side of things.
