Hi all
I have my next IP under contract and have been researching property managers that service the area and their fees. I have done a few scenarios on costings and thought I would share the outcome as I have seen a number of posts about PM fees in Perth and it was interesting to find that the general management fees were not all that different across the board it is actually the letting and advertising fees that can cost you heaps (similar to over east but with significantly higher number of add ons in wa).
So it pays to make sure you analyse the fees based on different scenarios (this goes for all states not just wa) as you may have the cheapest management fee while tenanted but if you are changing tenants every 6-12 months then you could be hammered with fees.
Scenario 1 - 4 weeks vacant after settlement tenant in property for 12 months @$350/wk then vacant for 4 weeks then tenant in place for the rest of the period my gross income from rent would be $33,600 over the 24month period based on this PM fees including all add ons marketing and letting few in order of cheapest to most expensive (%age against income in brackets):
1. Property Manager A - $3,360 - (10%)
2. Property Manager B - $5,544 - (16.5%)
3. Property Manager C - $5,833.40 - (17.36%)
4. Property Manager D - $5,953.40 (17.7%)
5. Property Manager E - $6,175.20 (18.4%)
6. Property Manager F - $6,227.20 (18.5%)
7. Property Manager G - $6,599 (19.6%)
8. Property Manager H - $7,326.60 (21.8%)
Scenario 2 - tenanted from settlement at $350/wk for 2 years with no vacancy would give gross income of $36,400, fees below are just standard ongoing running costs inc inspections, admin etc and also all include for initial property condition report at settlement. Again in order of cheapest first are below (letter referencing same as scenario 1):
1. Property Manager A - $3,640 - (10%)
2. Property Manager H - $4,336.60 - (11.9%)
3. Property Manager B - $4,376.80 - (12%)
4. Property Manager G - $4,438.20 - (12.2%)
5. Property Manager C - $4,455 - (12.2%)
6. Property Manager E - $4,474.20 - (12.3%)
7. Property Manager F - $4,517.80 - (12.4%)
8. Property Manager D - $4,733.40 (13%)
Note these comparisons are just for the regular fees that are charged for things like management, admin, inspections, statements, advertising relet fees etc, most of these charge extra for court attendance with rates ranging from $55-$110hr also some charge for managing repairs of higher value, getting more than 2 quotes and also managing insurance fees so it's not a perfect comparison but covers all known fees and expenses that are guaranteed to be incurred. Fees are all their quoted fees I haven't put the thumb screws on any yet.
Also note I did ask for rates of 4 other PMs but they haven't responded so haven't made the list I did note that some of the ones that didn't respond have signs outside their offices saying "rental properties needed" perhaps they should check their in boxes.
I haven't put the Property managers names in the above just called the PM a,b c etc as not sure if I should be disclosing company names and their fees in the public domain.
I know fees are not the only thing you select a Property manager on but clearly if you don't look at different scenarios you could be paying a big bill.
Having rented property for myself to live in in wa for a number of years with various managers it is interesting to see that the property managers who have higher relet costs are the ones that have always persuaded me as the tenant to just do a 6 month lease to "see how it goes" then do a 12 month afterwards now looking at from the other side of the fence I can see why so us as landlords need to be aware of this.
I have my next IP under contract and have been researching property managers that service the area and their fees. I have done a few scenarios on costings and thought I would share the outcome as I have seen a number of posts about PM fees in Perth and it was interesting to find that the general management fees were not all that different across the board it is actually the letting and advertising fees that can cost you heaps (similar to over east but with significantly higher number of add ons in wa).
So it pays to make sure you analyse the fees based on different scenarios (this goes for all states not just wa) as you may have the cheapest management fee while tenanted but if you are changing tenants every 6-12 months then you could be hammered with fees.
Scenario 1 - 4 weeks vacant after settlement tenant in property for 12 months @$350/wk then vacant for 4 weeks then tenant in place for the rest of the period my gross income from rent would be $33,600 over the 24month period based on this PM fees including all add ons marketing and letting few in order of cheapest to most expensive (%age against income in brackets):
1. Property Manager A - $3,360 - (10%)
2. Property Manager B - $5,544 - (16.5%)
3. Property Manager C - $5,833.40 - (17.36%)
4. Property Manager D - $5,953.40 (17.7%)
5. Property Manager E - $6,175.20 (18.4%)
6. Property Manager F - $6,227.20 (18.5%)
7. Property Manager G - $6,599 (19.6%)
8. Property Manager H - $7,326.60 (21.8%)
Scenario 2 - tenanted from settlement at $350/wk for 2 years with no vacancy would give gross income of $36,400, fees below are just standard ongoing running costs inc inspections, admin etc and also all include for initial property condition report at settlement. Again in order of cheapest first are below (letter referencing same as scenario 1):
1. Property Manager A - $3,640 - (10%)
2. Property Manager H - $4,336.60 - (11.9%)
3. Property Manager B - $4,376.80 - (12%)
4. Property Manager G - $4,438.20 - (12.2%)
5. Property Manager C - $4,455 - (12.2%)
6. Property Manager E - $4,474.20 - (12.3%)
7. Property Manager F - $4,517.80 - (12.4%)
8. Property Manager D - $4,733.40 (13%)
Note these comparisons are just for the regular fees that are charged for things like management, admin, inspections, statements, advertising relet fees etc, most of these charge extra for court attendance with rates ranging from $55-$110hr also some charge for managing repairs of higher value, getting more than 2 quotes and also managing insurance fees so it's not a perfect comparison but covers all known fees and expenses that are guaranteed to be incurred. Fees are all their quoted fees I haven't put the thumb screws on any yet.
Also note I did ask for rates of 4 other PMs but they haven't responded so haven't made the list I did note that some of the ones that didn't respond have signs outside their offices saying "rental properties needed" perhaps they should check their in boxes.
I haven't put the Property managers names in the above just called the PM a,b c etc as not sure if I should be disclosing company names and their fees in the public domain.
I know fees are not the only thing you select a Property manager on but clearly if you don't look at different scenarios you could be paying a big bill.
Having rented property for myself to live in in wa for a number of years with various managers it is interesting to see that the property managers who have higher relet costs are the ones that have always persuaded me as the tenant to just do a 6 month lease to "see how it goes" then do a 12 month afterwards now looking at from the other side of the fence I can see why so us as landlords need to be aware of this.
