PM fees western australia

Discussion in 'Property Management' started by Wirra436, 3rd Sep, 2012.

  1. Wirra436

    Wirra436 Member

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    Is it just me, or are WA PM fees high?

    Every IP I have owned , I have used a PM only because I work away and finding the time to do the running around and doing tenant checks, also if there was an issue with the property it can be dealt with quickly etc I felt it was easier and less hassling to pay someone a fee to do this for me.

    Recently purchasing an IP in Perth, well im starting to think Im better of printing off a REIWA lease agreement, taking some pictures/advertising, having landlords insurance and doing this myself.

    On a $500pw property , looking at approx $310-$350 P/month in fees.
    Letting Fees, Leasing fees( 2weeks rent), Management fees, Inspections etc
    or all inclusive for around 17% (ray white)

    what are other peoples experience with this, is it a case of dry the eyes princess and welcome to IP in WA? or have other investors done the work themselves and what were some outcomes?

    Any input appreciated.

    Cheers

    Wirra :)
     
  2. ipinvestor

    ipinvestor Member

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    Location:
    Perth WA
    4 properties, average 12.16%

    Prop 1 : Rent $14965, Mgt fee $2288
    Prop 2 : Rent $18640, Mgt fee $2147
    Prop 3 : Rent $15359, Mgt fee $1718
    Prop 4 : Rent $17135, Mgt fee $1887
    _________________________________
    Total rent received $66099, Mgt fee paid $8040 (including gst & postage)
    It is approx 12% of income.
     
  3. Wirra436

    Wirra436 Member

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    Rent $24,000 Mgt Fee $ 3900 approx 16% of income?

    I am including the Lease Fee and Letting fees. If I take them out we are around the 12%

    Are you going through a real estate agent? or an IP management company?

    I have checked with 5 PM's so far all around the same rates. :eek:

    like i said , could be a case of " dry the eyes princess" haha
     
    Last edited: 3rd Sep, 2012
  4. thatbum

    thatbum law talking guy

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    I get 8% and 1 week letting fee - southern suburbs. And I've heard of other agencies with even better deals.

    There are some around the place.
     
  5. redwing

    redwing Progress Not Perfection

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    Hi Wirra

    1. What's the actual fees in dot point?
    2. You can do better

    Fees are negotiable, you'll also find the more IP's, the more leverage
     
  6. Wirra436

    Wirra436 Member

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    Fees, I will put down two examples:

    Management fee: 8.5%+GST.
    Letting Fee: 2 weeks rent
    Lease renewal: 1 weeks rent.
    Inspections: $55
    Bond Inspection: $93.50
    Postage/Petites: $8.25
    Property Condition Report: $165
    Marketing: $99


    Management fee: 9.35%
    Letting Fee: 2 weeks rent
    Lease renewal: $110
    Inspections: $66
    Bond Inspection: $110
    Postage/Petites: $10.25
    Property Condition Report: $200
    Marketing: $70

    with other small costs here and there, works out both to around 16% of income if you include the letting fees, and around 12% without.

    other places differ here and there but all end up around the same mark.
     
  7. redwing

    redwing Progress Not Perfection

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    Geez Wirra, that's steep either way you look at it

    Property Managers from other states must salivate at that, or think how are they getting away with it?

    With the Management Fee 8.5% + GST is 9.35% in the second example anyhow

    We don't pay 2 weeks Letting fee on any of our WA Properties. Letting fee's used to be equal to 1 weeks rent for the tenant and 1 weeks rent for the landlord. When letting fee's, as charged to tenants, were abolished in 2007, many local PM's thought it best to hit the landlord up for the fee, rather than miss a weeks worth of cream, and many landlords accepted it.

    Your whole list above is negotiable including inspection periods, after all whats the difference between an inspection every three months (standard in WA) or every four months?

    Postage & Petties, I think email and the management fee should cover that?

    With regards to fees, there have been some great posts on the forum about companies who teach property management firms how to milk every last drop

    Having investments in other states brings a dose of reality, as they say, WA is Property Management (Fee) Heaven
     
  8. Doovalacky

    Doovalacky Member

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    There has already been a few threads on this matter.

    I pay only $150 a month with most of those fee's excluded.
     
  9. James_Benson

    James_Benson Member

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    Yes Perth is a rip off.

    I have had managers in Perth charge very similar fees for very bad levels of service. It seems they charge for everything, including a monthly sundry fee for telephone and letters! Wtf?

    This is in contrast to Melbourne where I pay a flat fee of 5% and that's it! Everything else included and the service couldn't be better.

    WA needs a wake up call.
     
  10. Rolf Latham

    Rolf Latham Member

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    Hi James

    well,get to it and find some business partners


    there is obviously significant money to be made and better service to be offered.

    Its my view that in most things in OZ,we have a reasonably efficient market

    If someones pricing is exploiting an area, then someone new will fill that gap pretty quickly

    ta
    rolf
     
  11. Paul j F

    Paul j F Member

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  12. shuggy

    shuggy Banned

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    It's amazing no-one in WA has stepped up to open a property management service and undercut everyone. They would cream it if they charged a flat 10%. Rent roll of 200 properties rented for average of $400pw gives annual income of $416,000. Employ 3 property managers to work from home on $60k each a year and pocket the rest. I pay 4.4% in Melbourne, 6.6% in Queensland and 8% in Thailand for all inclusive service and these guys all have offices.
     
  13. Dazz

    Dazz Banned

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    Hahaha....that was our business idea about 10 years ago.

    We thought there's something 'right' about charging a flat 10% fee....no more to pay, no list of 15 charges.....all those pi22y little charges to actually do something over and above the PM fee, which seems to be the cake, and then they charge you extra if they actually do anything.

    It didn't fly....you haven't taken into account all of the costs and whinging. The wife got her PM ticket, but that's no good....without a full blown tri-ennial certificate you can't start up a business.

    Upon further inspection, it was a farce so we dropped it.

    Flat 10% does not "cream it."
     
    Last edited: 9th Sep, 2012
  14. thatbum

    thatbum law talking guy

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    I was looking to try and do it but unfortunately I would have needed a full license and triennial certificate even for just a PM business.

    Too expensive just for that.
     
  15. redwing

    redwing Progress Not Perfection

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    With the last Financial Year and looking at Agents Expenses from Total Income it worked out to be 12.35% for us
     
  16. INVSTOR

    INVSTOR O+

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    Wow, that really adds up! So you probably earn about $12,000 in wages gross to pay the $8,040?
     
  17. redwing

    redwing Progress Not Perfection

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    Somersoft member Quicklearner, from Investors Edge did actually take the plunge

    Magnum also posted this