Property management fees

Hi,

What sort of property management fees are agents charging in Melbourne?

I've been quoted 5%+GST of the gross rent (I think, though it could be net rent) on an already tenanted property.

Which is what I pay for my residential properties, so it seems reasonable.

Am yet to find out about the re-leasing fees and associated advertising costs, and any statement fees or postage fees...

Thanks.
 
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not sure what they're charging in Melbourne but for many of the properties that I deal with in NSW we're looking at between 2 -3% of gross rent generally on A to A- grade property, the mum & dad stuff is a little higher.

Letting fees generally equate to 11% of the first year's rent.
 
5% + GST is the norm for smaller properties in Western Sydney.

You may be able to get this dropped slightly if you have numerous properties. Although, I would suggest you ignore the price - instead, base your decision on how capable you think they are of managing your property.

A good managing agent may charge 1 or 2% more but I guarantee that they will make more than 1 or 2% difference to your bottom line.
 
You cannot - in your wildest dreams, guarantee that.

What would you be willing to put up as security to give some substance to that guarantee - your house ??
 
Sorry to disagree Dazz, but I don't think all managing agents are created equal. One who understands the full implications of each lease, who knows how to enforce these, who knows when a tradesman is over-quoting, can keep arrears under control, can conduct market reviews when required and bring your rent up to where it should be, who knows when an owner should let go of a tenant, who knows when the owner's unwillingness to spend some money on repairs will result in the loss of a major tenant who is paying above market rent in a property which is difficult to find a new tenant for etc etc.. Surely this is better than a managing agent that just sends you a statement at the end of the month and couldn't care less?

I'm sure you either use a very good managing agent or are proficient in managing your own properties, but I'm sure you'd agree that switching to a new agent who doesn't have your best interests at heart, to save 1% on management fees, wouldn't be a good move...
 
Sorry to disagree Dazz, but I don't think all managing agents are created equal. One who understands the full implications of each lease, who knows how to enforce these, who knows when a tradesman is over-quoting, can keep arrears under control, can conduct market reviews when required and bring your rent up to where it should be, who knows when an owner should let go of a tenant, who knows when the owner's unwillingness to spend some money on repairs will result in the loss of a major tenant who is paying above market rent in a property which is difficult to find a new tenant for etc etc.. Surely this is better than a managing agent that just sends you a statement at the end of the month and couldn't care less?

I'm sure you either use a very good managing agent or are proficient in managing your own properties, but I'm sure you'd agree that switching to a new agent who doesn't have your best interests at heart, to save 1% on management fees, wouldn't be a good move...

Regrettably in this day and age I find it hard to find anyone other than myself with my best interests at heart.

I agree that cutting your contractor's throat for a percentage may lead them to be less than enthused in working for you but conversely paying top dollar doesn't guarantee top service.
 
I definitely concur that paying a higher rate doesn't guarantee better service. I also agree that it's hard to find good help - there are plenty of people that only care about their own backside.

I think in the Investment Property game you need a good team (accountant, lawyer, finance broker etc) and an agent is also part of this team.

Jonno
 
I don't think all managing agents are created equal.

Absolutely - but then one can say that about any trade / profession.

Trouble is, even though every trade / profession exhibits exponenets that range from the very good thru to the downright dangerous and woeful.....without exception, all of 'em will tell you they are absolutely brilliant, and far better than the clowns down the road.

The clowns down the road tell you they are the best, and the clowns up the road are hopeless.

This is every trade / profession. Property management is no different.

People skiting that they can guarantee something when both they and I know full well they will never guarantee anything of the sort....well, that just is one indication of many that us as consumers must rely upon.
 
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