property management

hi all

has anybody got any ideas on reducing the costs of property management.
I am curently paying about $7000/yr over 6 ip's in Vic and Qld.

I'm happy with the management but qld does charge a couple of % more than vic but my total amount is creeping up.

thanks for your ideas
 
Are they all managed through the same agency ? Most agents will give you a discount for managing multiple properties through them.

What % are you paying now ?

Unless it is overly high for the area, I don't really see the problem - it's a fixed percentage of the rent you actually receive - no rent received, no management paid. As your rent increases, the amount you pay increases - but you also get more money yourself. Not sure why this is a problem ?

The only other avenue really would be to manage them yourself - but you have to look at the real cost of doing so... the time taken and overheads in self managing often end up costing more than using an external professional manager. Then there's the SANF as well.
 
"but qld does charge a couple of % more than vic"

Ah yes.... But what does that mean in $ / week ????

Something between 6.5 - 8% is "normal" in Brissie, while Vic is - I don't know - say 5%??

Note, I don't have "actuals" but check this against your known situation:-

Brisbane rent (say) $220/week - agent fees 8% = $17.60
Victoria rent (say $350 / week - agents fees 6% = $21.00


Sydney agents fees (I've heard) are around 5% - but with rents higher again, the RE agent is really pulling in MORE, for a lower PM rate.

Go with the dollars rather than the %ages to get a TRUE result.

Regards,
 
hi les
The opposite is true in my case with regard to the rental income
Vic about $220 and qld about $300.

But my main point is that when you get several ip's and you are then paying near $10000 its tempting to start your own management business. Even with the cost of interstate flights there has got to be point when this becomes more and more viable.

May be we could start up an investors managent service whereby interstate investors keep an eye on each others ip's.

Now there's something for further discussion.
 
Originally posted by bundy1964
I think you hit some legal hurdles managing properties other than your own, in SA I would need to be a licened Land Agent and have the required knowledge.

[bundy

You are right Bundy
In all states you must be a licenced real estate agent and have a trust account to manage properties for others
 
hi all
may be as a larger group we could set up our own of management company in the various cities and large towns and deal just with property management.

It could run on a club or association guide lines where there are hundreds or thousands of members

obviously we would charge ourselves only 5%

OR is this too hard and i should stop my Grandious Thoughts

spooky
 
No, the plan could work... so long as you ALL have the correct licenses !

There may be a way to structure it with a couple of licensed agents running the trust account - and everyone else working as contractors performing various maintenance/inspection tasks ?

Gotta be very careful of the legalities of these kinds of things.
 
I've got a block in Queanbeyan. I live here- but I wouldn't be doing the management for anything.

Agent'scommission is $38 pw for the block. In three months, there's been two tribunal hearings for each of two units. If I'd been doing it, I would have had to have taken a minimum of two hours offwork (one hour just travel)- plus preparation.

The PM knows what she's doing, and knows how to handle the properties. That's what a PM is for- not the 98% of the time when everything is right.
 
Well, as several others have mentioned, Spooky, your plan is a noble one, BUT... licenses will be needed.


You will need:
A corporate license for the master company, and a licensed director for that company. (In fact, in most states, EVERY working director will need to be licensed).


THEN

You will need:
A licensed agent for each state in which you wish to operate, in fact, you will need a licensed agent for EVERY office you wish to open. That means, if there are five of you, all over NSW, you will ALL need to be licensed.


THEN

You will need:
Rep's certificates/licenses for each and every person you employ who has anything to do with either trust monies, or leases.



Other than that, Go for it!!!

It's a plan, but will be difficult to implement without the licenses. (well, illegal, but you know what I mean ;) )


For example, I have personal Estate Agent Licenses in both QLD and VIC, and I hold corporate licenses in both QLD and VIC, but, since I have staff in QLD, and am the officer in effective control of the agency in BNE, I can't run any reps in VIC because there wouldn't be a supervising agent. I would have to employ a licensed agent there to look after any reps.


hope this helps clarify the licensing question...

asy :D
 
Pondering again


How much would a reasonable rental manager earn in a year.

I thought that $50,000 for starters would't be too bad.

Now 5% that makes a turn over required of $1,000,000

Average rental / ip in Brisbane $13000 @ $250/wk

That makes about 77 properties req'd which gives a saving of about $390 /ip @ 3%

Between 20 investors thats $1500 each

Thats $30,000 saved between who ever takes part.

May be a property manager out there might tell us how much they earn to make these figures look ok
 
Spooky: To figure what property managers earn just multiply the average rent by the average cost by the average rent roll by the avg vancancy.

For example
Avg Rent: 220
Avg Cost: 8%
Avg vacancy: 5%?

220*8/100 *.95 = $16.72 per property per week. I'd assume some would have about 50-100 properties?

The part that I dont know is (and perhaps any PM's here can answer): Do managers actually get this amount or a commission of it or just a straight wage?
 
You really need to add a heap of overhead to the figures for the cost of running an office, advertising, expenses (particularly travel), admin, equipment, etc.
 
as sim has explained, you've missed out something.
the overheads.
From what I understand a good property manager can can look after about 100 properties. But if you are talking about looking after properties all over Melbourne or Brisbane travelling time would cut down the number of properties.
You need to allow for office space, rent, workcover, PI insurance, computers software advertsing etc.
You also needd an accounting person to look after the trust account but they must also be a lisenced agent or agents rep and you may need a receptionist.
Then what happens when the property manager you employ gets sick of dealing with whinging tenants or stingey landlords
How do I know all this?
I'm not an agent and don't intend to be (no slurr intended)
The timing and content of this post are fascinating as I am in the middle of coordinating something that may be of great interest to forum subscribers in Melbourne where you would get great service from an experienced, established and "fully licenced" property management company who gives first class service with a money back guarantee.
Not of the rent or tenant's performance, but of their performance to you as a landlord
Plus free internet advertising for vacant properties for life.
We have also gone down the path of getting "strength in numbers" as someone said earlier in the post, for our clients.
There is no reason why this can't be extended to forum subscribers.
Its all being organised at present, and should be ready to go in 4 -5 weeks time, but I can't say too much just yet.
If you are a Melbourne landlord and want to find out about this, please email me and I will let you know the details when they are finalised.
The more landlords, the better the deal we are likely to strike.
That may mean a better rate or maybe just better service.
Let's see.
If it all comes off and we can get a great deal for everyone that would be an excellent result.
So Melbourne landlords email me and if you feel comfortable tell me how many properties you would consider giving to a property manager who provides a first class service and adds value to your investments.
[email protected]
 
Last edited:
Originally posted by spooky
hi all

has anybody got any ideas on reducing the costs of property management.
I am curently paying about $7000/yr over 6 ip's in Vic and Qld.

I'm happy with the management but qld does charge a couple of % more than vic but my total amount is creeping up.

thanks for your ideas

$7000/ 6/ 52

= $22.43 average per week per property.

Thats seems pretty good to me, i wouldnt walk up the corner shop once a week for $22.43.:)
 
the property management business is the worst business to be in.

to make enough income, you need at least 100 properties and then 100 properties is too much for just one person to handle.

and if you want to do it properly and look after the landlords and properties as if they were your own - it's sure to send you mad, also it turns you into a real cold hearted bastard, dealing with a 100 a'hole tenants every week, week after week after week after week sob! sob! sob!
 
ruk, thats mostly true. But I'd assume it'd be a better than most industries to be in if your goal was to learn about Property Investment.
 
it would probably put you off property investment.

i had most of my properties before i went into it and it hasn't helped much - only now i do more rental checks on applicants.
 
Indeed - the worst part about property investment is the tenants. When you only have a couple and they are model tenants, then great. When you have 100+ and 2% cause you constant grief, then it's a nightmare.

Tenant issues is the most common reason I've heard for people getting rid of their IPs.
 
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