PM Management Fee & Other Q's

[MERIDIAN]

We just purchased our First investment property in Mernda Victoria after a few years of pondering.... ( the fear of the unknown) and I have a few questions.

Anticipated rent will be $360PW

Management fee of 7.7 % inc GST too high?
Lease Fee 1 week rent + GST does this seem ok?
BOND 1 months rent. does this seem ok?
Re lease fee $110 inc GST does this seem ok?
what $$ should I put into urgent repairs? PM suggests $1800
Exclusive authority 60 /60 is that the norm?

Advertising
Internet $60
Advertising board $90

Any help would be great.

Thank Daniel and Teresa

 

[SeafordSunshine]

Dear Daniel and Teresa,
firstly congratulations!

I would start looking at the vacancy factor for you local area,
how many flats or houses like yours are empty?
Is it better or worse than the other ones?
What would make a person want to rent it?
Know the lifestyle of your tenants, students, workers, families, perhaps?
Also, have a look at the Victorian FAir Trading website and familiarise yourself
http://www.consumer.vic.gov.au/renting
I would be asking about the quality of management, as well as the fees,
So do they do things on time?
How long does it take for them to rent?
Is it 2 weeks or 6 weeks (think about you paying the mortgage when its empty)
do you have a $ buffer?
I suspect a lot of your questions will be answered by Fair Trading

get reading, and congratulations!
I hope this helps

 

[MERIDIAN]

Thanks for your response.

There Is a fair bit of competition however we brought a house in a great location that is close to positive and have a buffer.

Just want to make sure I am not getting taken for a ride, as nearly every can talk the talk but can they walk the walk ... And 7.7% seems stiff

Also looking for another property currently in your neck of the woods Frankston so I want to ensure foundation are strong.


Thanks
Daniel

 

[Lil Skater]

Well, I'm biased.. But here goes.

Management and leasing fees I am impartial as obviously I have my own commission structure.

Bond, if the rent is over $350pw you may ask for more bond. One month tends to cover plenty, but it's your choice. If you wish to increase it, maybe consider 6 weeks.

$1,800 for urgent repairs is actually part of the legislation.

For the authority periods, they're generally 30-90 days.

 

[bychaw]

hi.. y don't you talk to a few more PM and ask for more quote for comparison?

Thanks for your response.

There Is a fair bit of competition however we brought a house in a great location that is close to positive and have a buffer.

Just want to make sure I am not getting taken for a ride, as nearly every can talk the talk but can they walk the walk ... And 7.7% seems stiff

Also looking for another property currently in your neck of the woods Frankston so I want to ensure foundation are strong.


Thanks
Daniel

 

[misakimen]

We just purchased our First investment property in Mernda Victoria after a few years of pondering.... ( the fear of the unknown) and I have a few questions.

Anticipated rent will be $360PW

Management fee of 7.7 % inc GST too high?
Lease Fee 1 week rent + GST does this seem ok?
BOND 1 months rent. does this seem ok?
Re lease fee $110 inc GST does this seem ok?
what $$ should I put into urgent repairs? PM suggests $1800
Exclusive authority 60 /60 is that the norm?

Advertising
Internet $60
Advertising board $90

Any help would be great.

Thank Daniel and Teresa

Get a few quote from at least 3 agents in the area, and use the best offer as your bargaining power. Not quite sure about Melbourne, but in Sydney most cases you can talk down to <6%, and try to ask them to waive the advertising fee.

 

[The Y-man]

Management fee of 7.7 % inc GST too high?
Lease Fee 1 week rent + GST does this seem ok?
BOND 1 months rent. does this seem ok?
Re lease fee $110 inc GST does this seem ok?
what $$ should I put into urgent repairs? PM suggests $1800
Exclusive authority 60 /60 is that the norm?

Advertising
Internet $60
Advertising board $90

Any help would be great.

Seems pretty normal.

The Y-man

 

[Joe D]

Bond, if the rent is over $350pw you may ask for more bond.

4 weeks Bond is pretty standard, however, in WA rent needs to be over $1200pw before you can ask for more bond!! (Prior to July 2013 it was $500pw).

So if you can ask for more Bond, definitely do it as 4x$360 (or similar) won't cover much.

 

[Lil Skater]

4 weeks Bond is pretty standard, however, in WA rent needs to be over $1200pw before you can ask for more bond!! (Prior to July 2013 it was $500pw).

So if you can ask for more Bond, definitely do it as 4x$360 (or similar) won't cover much.

$1200pw! That's insane!

Here it's one calendar month, so a little more than 4 weeks, but still worth increasing it if you can.

 

[elsLan]

Hi Daniel and Teresa

Depends on the agent and what their service level is. Ask them what you get for your money!
7.7% is the higher standard rate most agents will start at. You will find many agents in the area your IP is in are anywhere between 5.5 to 7.7%. There are many agents competing for your business in the area with the high growth and development rate.

Negotiate no re letting fee if you pay for the advertising.

Urgent repairs legislation is $1800 now.

Leasing fee can vary from 1-2 weeks plus gst. Ask how many open homes they do, when the do them, if private appointments are conducted and ask to see the standard of legal documents you are getting for your leasing fee- eg: condition report with photos. Credit checks on applicants- are they utilised?
and thorough feedback after prospective tenants inspect- ask what the procedure is- do they report back to you when validating applications and if you don't get any interest how will the agent ensure your vacancy is minimal? Dropping your price isn't always the answer.

The board seems expensive- depends on size. Internet costs are reasonable but ask which sites your property will be listed on and the quality of photos/ advertisement text you will receive.
There are many available properties so you need to be standout in Mernda. New homes with 3-4 bed, 2 bath and all inclusions like heating/cooling are currently renting anywhere between $320-360 per week. Ask to see the agents recent letting results in the area that are the same or close to that of what your property presents.

Bond amount is standard as is authority. However you really should be considering landlord insurance from a specialist broker (not the bank or standard insurers) that will cover you for accidental and malicious damage inclusive of your contents as well as your rental income.

Don't forget your depreciation schedule being a new property also.

Hope this helps.
Happy to answer any further questions by forum or pm.

Elisabeth.