Property management fee increases

Discussion in 'Property Management' started by paguatao, 27th Apr, 2012.

  1. paguatao

    paguatao Member

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    Has anyone else in Perth experienced an increase in PM fees? We've been with our for about 5 years now. They are ok - not that great, I constantly have to nag them to chase things up.

    Anyway they're merging with another company, so new lease agreement arrived.

    Letting fee - still 2 weeks rent + GST
    Management fee - still at 8.5% + GST
    Now an Admin fee - $25 per month
    Property condition report - from $95 total, to $77 ph up to max of $400
    Routine inspection report - from $55 total to $77 total
    Final bond inspection - from $95 total to $77 ph up ot max of $170
    Postage, petties - $0 to $10 per month
    Title search - from $15.80 one off charge to $35 per search

    Previously we crossed off whatever we weren't happy with, eg changing Postage/petties from $10 to $0 as we asked for statements to be emailed.

    So I guess we'll do the same for this one, but I wondered if anyone else has noticed increases? And why an Admin fee of $25 per month? I'm already paying them 8.5% management fee a month which works out to over $100 per month for ..... what ....??

    I'm not feeling very happy at the moment, especially when I've had to constantly chase them up and question things. So I may look around at other agents' costs ....
     
  2. Doovalacky

    Doovalacky Member

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    I'm in Bunbury, last time I checked agents were between 9-11%.

    Currently I am paying $160 flat rate.
    Covers marketing, condition reports/inspections, finding tenants, statements.
    Works out at roughly 9.5% vs current rent.

    Leasing fee 1 week rent
    Meeting attendance, $33 p/h (ie attend strata meeting)
    Court attendance $85 p/h
    Inventory of furnished properties extra $77
     
  3. goonandtell

    goonandtell Member

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    If they want a fee for each routine task what is the management and admin fees for?!

    I haven't dealt with WA REAs but the regional ones in vic are a lot less compedative than city, my basic structure is.

    Lease fee - Yes i pay it, the vic standard is 1 week.
    Management fee - market dependanat.
    Advertising fee - No, i refuse too.
    Tribuneral/Court - by negotiation.
    Every other BS task fee - no, never, flat out will not consider.

    If they want an increase get them to build it into the management fee, to me anytime anyone tries and tacks on other fees and charges in any industry its to weasle and hide what they are really charging. If they want to be a 13% agency thats there call but they should be a 13% agency not a 7.5% with $2 for using the bathroom and $3 for blowing their nose.
     
  4. DaveM

    DaveM KFC Buyers Agent

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    So they want you to pay a management fee, then an admin fee to manage the management, and an inspection fee to check on the property that they are managing and charging you to administrate and manage?
     
  5. Propertunity

    Propertunity Real Estate Buyers Agent

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    Yeah I don't get WA prices for PM at all!

    Over here on the East Coast:
    5.5 - 6.6% PM fees includes 2 - 4 inspections per year.
    No advertising.
    $5pm statement fees.
    1.5 weeks rent to find and sign up a tenant.
    That's all!
     
  6. Lil Skater

    Lil Skater Member

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    I need to set up shop in Perth!!

    That's incredible.

    Effectively your 8.5% is covering..... What? Clearly not admin or inspections because they need to charge extra for all of that. I'm surprised they're not charging you to supply quotes on repairs!

    Seems you're paying them to do nothing, and you should feel privileged they're "looking after you". Especially since you need to chase up everything.

    I don't know the Perth market very well, but if you can find a decent PM who charges 9.5% with one weeks letting (no extras) you'd surely be better off!
     
  7. Ricky

    Ricky Member

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    This seems to be the going rate in Perth with most agents, the
    9.35% + letting fee 2 weeks + gst, + inspections + postage + monthly admin + + + all the other fees. I have noticed some increase in fees from my REA too.
    When it comes to fees, I have no agent to suggest to you OP, some charge a little less monthly, some charge more on inspections, etc etc.
    Find one who at least does the job properly (if that even exists) :mad:
    If it were not for the fact that I like to take off and travel a few times per year, I would do it all myself. !!!!!
     
  8. paguatao

    paguatao Member

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    I've contacted another agent who was quite prompt with an email reply, quote is for 13.2% (12%+GST) inclusive of everything, except the letting fee which is 2 weeks and court fees.

    I told her who we were with and she sniffed "oh yes, we heard that they're on this thing of 'getting the most out of our rent roll' ..." so I googled rent roll out of interest.

    Found a really "interesting" article which probably shoudn't be made public, I think it will raise hackles on a few landlords:
    http://www.darrenhunter.com/_admin/userfiles/file/Property Management Fees Update Jan 2012(1).pdf

    Pretty sure it won't be up for long :)

    It raised my hackles, with statements like:

    The Lease Renewal Fee:
    Associated with renewing a further fixed term with the same tenancy in place, this generally only involves negotiating the further fixed term between the landlord and tenant, and paperwork involved (usually a simple one page addendum).
    This has to be the ‘easiest’ and possibly the most lucrative fee of all......
    ...
    We do state that anything less is too low!
    This fee has an amazing impact on profitability when charged across the board and we get the best results here on profitability when charged.
    Amazing- The most extreme fee we have seen an agency charge successfully is 2.2 weeks rent, in a surrounding market place that charges nil to $55. They believed they could do it, so they did!


    Routine Inspection Fee:-
    This is a charge for every periodic or routine inspection conducted, the interim inspection
    conducted during a tenancy. Considering all the work involved, a majority of agents still do not charge this fee, and believe they couldn’t get it however all admitting this is one of the tougher and more difficult services to provide due to the many inspections that need to be conducted annually.
    Commonly charged- $11 to $77 per inspection
    We wish to confirm however we have seen up to $66 charged per inspection in a market that charges anywhere from nothing to $22 per inspection (in South Australia).
    When I questioned this person about how difficult is it to charge and justify this fee in a
    marketplace that charges much less, the reply was the same ‘we believe we are worth it,
    we can justify it, so we get it!’
    It looks like the power of the right mindset wins again!

    Property Condition Report (PCR) Fee:-
    A PCR Fee (the in-going inspection conducted at the start of a new tenancy) is commonly charged in Western Australia but nowhere else we have seen. This is also charged in addition to the letting fee and covers the expenses of the preparation of the ingoing inspection report.
    Commonly charged- $55 to $220 per in-going inspection (per new tenancy) (Common to
    WA)
    The difference we see in Western Australia is that departments charge this fee for just the first inspection done when the property is new to the company but charge nothing or a reduced fee when the inspection is amended for the next new tenancy (when typed up on an easy to amend MS Word document).
    We would like to add that the departments that charge the same fee for the first and
    subsequent PCR inspections get no resistance from clients at all.
    Again, the mindset of these agents allows that same fee to be charged regardless and
    remain more profitable than the departments that lower the fee on amended PCR reports.
    Well done Western Australia- again!

    Tribunal/Court Attendance Fee:-
    Usually charged at an hourly rate, this covers staff time and preparation for a tribunal
    hearing. This fee also helps reduce requests from landlords wanting you to take matters to tribunal you may consider as ‘frivolous’, or a ‘waste of time’.
    What we recommend is charging a fixed fee, regardless of time as this is easier to
    administer as the departments we see charging per hour end up charging nothing at all
    because property managers haven’t recorded their time, so this vital fee is missed and
    overlooked!
    The challenge I would like to give you is this. When cleaners are charging from $35 to
    $55 per hour, plumbers and electricians from $55 per hour and computer technicians to
    clean a virus off your computer from $100 per hour, I believe our responsibilities as
    professional property managers overseeing tens of millions of dollars worth of real estate
    dictate we are worth more than this!
    I see departments charging $55 per hour so often when they should be charging between
    $110 to $165 per hour for their time at least!

    End of Financial Year Statement Fee:-
    Charged every year the annual statement is sent. Consider charging per property or per
    landlord (some landlords have multiple properties).
    The benefit to landlords is easy to see. If the landlord didn’t have access to a yearly
    summary statement that accumulates all monthly statement information into one, how much would their accountant charge to compile the same?
    It would be charged at an hour of their time starting at $165 per hour!
    Therefore a charge of $66 for a yearly statement is very easily justified!
    Commonly charged- $44 to $88 for each annual statement
    This fee is common in Western Australia but not so common elsewhere. However we have
    seen this fee charged successfully in marketplaces that only charge a management fee,
    letting fee and a monthly administration fee. Again, it is your mindset and not your landlord clients that state whether you can charge this fee!
    Note- consider charging also for landlords who may have misplaced their statement, and
    wish to have another. This fee does reduce these statement replacement requests.

    Tenancy Agreement Preparation fee:-
    This covers the time to prepare the residential tenancy agreement for each new tenancy.
    This is charged in addition to the letting fee.
    To those of you that are thinking ‘what is the letting fee for?’ if you also charge this fee.,
    perhaps ask that question to our Western Australia colleagues who get a letting fee, a
    property condition report fee, and tenant database check fee and also in some cases,
    property photos fee as well!
    It is our mindset that determines what we believe our services are worth! If you believe you are worth it, can justify and sell it, you will get it!


    Sounds like an ad for that hair colour - "Because you're worth it" ;)
     
  9. Ricky

    Ricky Member

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    oh and you have to love this one;

    Increased Rent Fee :rolleyes:

    This is the most recent fee we have come across, and only once have we seen this fee
    charged in this manner. The concept is simple, the fee is based as a percentage/commission
    of the overall fee increase amount attained for the next 12 months.
    For example, if you increased the rent by $20 per week, the overall yearly increase in rent is
    $1040. The fee is based on a percentage, for example 11% of the increased rent, per
    annum.
    In this example of charging an extra $20 per week, the agent would earn a rent increase fee
    of $114.40 (inc GST), being 11% of $1040.

    Suggested charge- 11% of the annual increased rent amount
     
  10. redwing

    redwing Progress Not Perfection

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    I found this interesting from the link

     
  11. redwing

    redwing Progress Not Perfection

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    PS: WA is Property Management Paradise when it comes to fee's
     
  12. paguatao

    paguatao Member

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    Latest update on my lovely and efficient PM (NOT):

    Sent email 5 Jun:
    Hi xxx,
    Noted that rent payment has been updated to new bank account details as requested, thanks.

    Please advise when lease expires - I believe it is very soon. Also what your opinion is on any rent increase.

    Request that any outstanding rent, and water charges are recovered prior to end of financial year.

    Thanks

    == NO REPLY ==

    Sent email 13 June:
    Hi,

    Can I please get a response to this email? I'm not sure why I'm constantly chasing you up re the status of things: asking for a copy of the lease agreement, checking if the tenants have updated their rental payments and getting conflicting information ...

    I sent this a week ago and haven't received a reply. I'm pretty sure the tenants' lease has expired, and surely this should have been followed up your end BEFORE the lease expires?

    Email response same day:
    Hi zzzz
    The tenant has not responded regards singing a new lease. I am of the opinion she will be wanting to move out of the property and I would suggest remarketing the property for $300.00 per week if this is the case.

    My email response:
    If she hasn't responded then can we initiate action to get her out?
    And please ensure all her rent and water charges are recovered as soon as possible.

    We would like the rent to be increased to $310 and for new tenants to be shown through the property as soon as possible even while she is still there.

    Email response:
    No Problem and thanks you.
     
  13. CHAOS

    CHAOS Member

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    We recently changed managing agents only becasue we were going to sell the property and we thought it easier - but I was shocked at the much higher percentage fee, plus the list of other chargable items. And I am gobsmacked at the link I have just read.

    With a different property/agent I queried the postage and petties that was itemised on my monthy statement becasue I wanted to know why they were charging me $5.50 when stamps were only 50c, envolopes 10c and the paper 10c - and I was told we are charged for them typing it up - The result they started emailing me the statements for $2.20 but for some reason they reverted to posting them but I only pay $2.20.

    The question I have then is What is the management fee for?

    I haven't done the sums but it may be cheaper to pay the itemised costs on a when they occur basis and remove the 'so called management fee'.
     
  14. boomtown

    boomtown Member

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    I just cross off all the extra fees and laugh. If they don't like I can find someone else. This isn't rocket science.
     
  15. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Be cheeky, cross out the management fee & leave the other charges. After all the fees etc what are they being paid to do?
     
  16. boomtown

    boomtown Member

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    Nice I like your logic.
     
  17. fisherman

    fisherman Member

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    The way is open for groups of owners to band together to negotiate for a prescribed services contract with performance standards written in and the single contract fee per house.

    After all, if householders are prepared to group together to get a discount with an electricity authority, REAs need to be a little careful with their manners.

    It is not so hard to advertise on here for other owners in a particular locale who want to get together for a better deal.

    Perhaps that would make sense for a local agent too.