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"
