One PM I have talked to , has a couple of fees and charges I have never encountered before eg. a hefty percentage of one weeks rent when a lease is extended/renegotiated or an hourly rate to organise repairs. I would have thought this is why we pay them a commission and management fee. Anyone had to pay these sorts of charges?
PM's fees/charges?
- Thread starter gazza
- Start date
My PM also charges 1 week rent per re-let year per property in TVL, if no re-let no fee, if more than one re-let in year then one fee, works for me. Also been happily paying 7.5% management fee for years with no probs. With EFT of funds to owners and even tenants paying rent electronically these days, the only time the PM's do anything to justify the management fee is when they have to sort out repairs. If mine started talking hourly rates I'd start talking alternate PM's.
My PM has just raised fees from 5% to 6% (+ GST) (Discount for nine units, and discount for buying from that agent).
The new fees include a relet fee for new tenancy only- no relet for the same tenant renewing, and no relet fee if the landlord finds the tenant.
They are introducing a tribunal attendance fee, which is quite fair.
But fees to extend an existing rent, or an hourly rate to organise repairs- that really is over the top imho.
There are agents who get a cut from tradesmen on top of all fees.
Gazza, time to ask around.
The new fees include a relet fee for new tenancy only- no relet for the same tenant renewing, and no relet fee if the landlord finds the tenant.
They are introducing a tribunal attendance fee, which is quite fair.
But fees to extend an existing rent, or an hourly rate to organise repairs- that really is over the top imho.
There are agents who get a cut from tradesmen on top of all fees.
Gazza, time to ask around.
"There are agents who get a cut from tradesmen on top of all fees."
Yes and sometimes it can be substantial.
For example , my mate used to mow lawns (mostly unit blocks ) and do landscaping etc in Newfarm, Brisbane, He happened to find out that his bill was being marked up substantially. For example from $60 to $100 or more when on billed to the owner.
One of the agents I used for a "away " property used to attach the tradesmans bills to by rent statement each month. I think it is reasonable that the agent charge some kind of fee. However, I think , the amount of markup above is excessive.
Yes and sometimes it can be substantial.
For example , my mate used to mow lawns (mostly unit blocks ) and do landscaping etc in Newfarm, Brisbane, He happened to find out that his bill was being marked up substantially. For example from $60 to $100 or more when on billed to the owner.
One of the agents I used for a "away " property used to attach the tradesmans bills to by rent statement each month. I think it is reasonable that the agent charge some kind of fee. However, I think , the amount of markup above is excessive.
Gill Bates said:
I dont consider it reasonable.. the management fee that agents take for the rents is exactly that a "MANAGEMENT" fee.. Managing involves coordinating repairs. Taking a margin on the repair, or a commission/reward/bonus etc is unacceptable unless its pre-agreed with the Landlord that that shall happen.
The problem is that with so many new Landlords on the scene management contracts are not being properly read before being signed. People have a blind faith in the Agents ethics and approach.
It's not really a problem unique to Real Estate, hardly anyone properly reads binding legal agreements before signing them.. its just that the Real Estate Industry of late seems like its becoming more aggressive in its revenue expectation from its rent roll.
Hi All
I concur with duncan, reading the variuos threads, there does seems to be a trend of MA's pushing up prices.
I just took my fee from 5% to 4% for the bulk of my properties
Pay 1/2 week releting fee on all my properties. No fee apart from statutory fee re reletting fees. ( Generally don't renew lease but just let it run only renew lease if tenant insists)
Don't pay appearance fee re tribunal hearings as I consider this is a shared experience. Again I do pay the tribunal fee's.
Some time back I was about to sign an agreement having arranged the details re management fees over the phone when I read through the agreement before signing and found a gem in the form of a $200 lodgement fee to cover all tribunal/wages costs, whether the matter went to the tribunal or a settlement was negotiated prior to tribunal. Needless to say got up and left that office without signing. Walked up the road and found an alternate agent who has been managing this property since '99.
All realestate statements have relevant outgoings backed up by invoices attached to the statement. These expenses also tally back to my expense authorisation register which is recorded when agent phones up for repair authorisations.
My main agent will also vet the reported problem before he phones to discuss the problem. For example, water heater problem, he will be able to tell me date of manufacture whether there are evident leaks etc.
Seem to have better results with the diagnosis of problems with male managers. Females seem to want to simply sit on the phone and pass on messages. (an inflamitry statement).
As Geoff has already indicated keep looking Gazza. Remember your the client.
Cheers
I concur with duncan, reading the variuos threads, there does seems to be a trend of MA's pushing up prices.
I just took my fee from 5% to 4% for the bulk of my properties
Pay 1/2 week releting fee on all my properties. No fee apart from statutory fee re reletting fees. ( Generally don't renew lease but just let it run only renew lease if tenant insists)
Don't pay appearance fee re tribunal hearings as I consider this is a shared experience
. Again I do pay the tribunal fee's. Some time back I was about to sign an agreement having arranged the details re management fees over the phone when I read through the agreement before signing and found a gem in the form of a $200 lodgement fee to cover all tribunal/wages costs, whether the matter went to the tribunal or a settlement was negotiated prior to tribunal. Needless to say got up and left that office without signing. Walked up the road and found an alternate agent who has been managing this property since '99.
All realestate statements have relevant outgoings backed up by invoices attached to the statement. These expenses also tally back to my expense authorisation register which is recorded when agent phones up for repair authorisations.
My main agent will also vet the reported problem before he phones to discuss the problem. For example, water heater problem, he will be able to tell me date of manufacture whether there are evident leaks etc.
Seem to have better results with the diagnosis of problems with male managers. Females seem to want to simply sit on the phone and pass on messages.
(an inflamitry statement).As Geoff has already indicated keep looking Gazza. Remember your the client.
Cheers
Just recieved my new P.M. contract.....What are your views?
1.....Management Fee nil to 2.5% includes GST
2.... Total Agent Fees on Rent.... 5.5% to 7.5%
3.... Renewal Fee nil to 50% of first weeks Rent
4... Postage & bank Fees $3.30 p.m to $5.50 p.m includes GST
5... Rent Collection 5% plus GST
The person that operates this business is on a small scale and does not have the overheads that of larger real estate companies.
1.....Management Fee nil to 2.5% includes GST
2.... Total Agent Fees on Rent.... 5.5% to 7.5%
3.... Renewal Fee nil to 50% of first weeks Rent
4... Postage & bank Fees $3.30 p.m to $5.50 p.m includes GST
5... Rent Collection 5% plus GST
The person that operates this business is on a small scale and does not have the overheads that of larger real estate companies.
Hi Ojas
What's the "rent collection 5%" ? Isn't that a duplication of the management fee % which I assume is based on the rent collected in any given month ?
Hi Jas
Because PM's priority is making money for the REA, it stands to reason they will maximise their fees while still doing their job for you. So, I would suggest making the MA Agreement terms discourage Tribunal attendance and tenant turnover. A PM can select tenants who are unstable or erratic payers in order to maximise Tribunal attendance and tenant turnover. This can be avoided by ensuring you get a copy of all tenancy applications. Better to reward PM's for annual renewal of existing lease to existing tenants, nil arrears, fortnightly payment of rent to you, monthly payment of bills by you, preventative maintenance and sensible prices, etc. Rewarding PMs for re-lets to new tenants encourages tenant turnover and the inevitable vacant downtime and ads cost.
cheers
crest133
What's the "rent collection 5%" ? Isn't that a duplication of the management fee % which I assume is based on the rent collected in any given month ?
Hi Jas
Because PM's priority is making money for the REA, it stands to reason they will maximise their fees while still doing their job for you. So, I would suggest making the MA Agreement terms discourage Tribunal attendance and tenant turnover. A PM can select tenants who are unstable or erratic payers in order to maximise Tribunal attendance and tenant turnover. This can be avoided by ensuring you get a copy of all tenancy applications. Better to reward PM's for annual renewal of existing lease to existing tenants, nil arrears, fortnightly payment of rent to you, monthly payment of bills by you, preventative maintenance and sensible prices, etc. Rewarding PMs for re-lets to new tenants encourages tenant turnover and the inevitable vacant downtime and ads cost.
cheers
crest133
Just got a quote from an agent in Hobart
Our fees for Property Management are charged as per the REIT Scale of Fee:
Residential Leasing Letting fee):
Less than 12 months 5.5% of annual rent
12 mths to 24 mths 6.7%
Over 24 mths 8.1%
Managing Property (monthly fee):
Residential 11.61%
Not a bad earn.
Our fees for Property Management are charged as per the REIT Scale of Fee:
Residential Leasing Letting fee):
Less than 12 months 5.5% of annual rent
12 mths to 24 mths 6.7%
Over 24 mths 8.1%
Managing Property (monthly fee):
Residential 11.61%
Not a bad earn.
This is a bit off topic but on,
Do you know what you are valued at as a landlord to an agency?
Now I stand to be corrected here (Asy / Kevin) but I’m of the understanding that it’s 3 x’s the monthly rent.
Agency’s can borrow against their Rent Roll and it’s a saleable item. Actually it’s one of their main assets.
It’s a shame property managers are so transient and aren’t explained the value to an agency a land lord is.
Talk to some one who really values your business.
Do you know what you are valued at as a landlord to an agency?
Now I stand to be corrected here (Asy / Kevin) but I’m of the understanding that it’s 3 x’s the monthly rent.
Agency’s can borrow against their Rent Roll and it’s a saleable item. Actually it’s one of their main assets.
It’s a shame property managers are so transient and aren’t explained the value to an agency a land lord is.
Talk to some one who really values your business.
All landlords should read their PM agreements diligently. Every Real Estate office will charge differently. I don't believe they should be charging for re- letting, tribunal hearings, organising maintenance etc these are all part of the general day to day running of a rent roll.
Shop around, talk to different PM's at least three to four and make sure you are happy with them. Good tenants are not that hard to find if you try hard enough, so a good PM should not be that hard to find either.
Jarrod
Jarrod Lane Real Estate
Shop around, talk to different PM's at least three to four and make sure you are happy with them. Good tenants are not that hard to find if you try hard enough, so a good PM should not be that hard to find either.
Jarrod
Jarrod Lane Real Estate
