Property managers - why not get a group discount?

I am wondering if it is possible to get a discount of PM fees?

I've got 2 properties in QLD, 1 in Toowoomba and the other in Brisbane city. Everywhere i've looked in Toowoomba or brisbane city - their rates seems to be 8%+GST minimum + this + that.

I was able to negotiate with the PM in Sydney (city area of 5% flat fee for 3 properties between 3 people, no other fees). In hindsight we should of went harder however it crosses that invisible line where service to value.

Wondering if anyone here in the Toowoomba/ city area or even in general (ANYWHERE) be willing to negotiate a group discount for PMs to lower their rate for 'Somersoft' members and a 'volume discount'... ;)

I am sure we can all ruffle up some members and start conversations with PMs. ;p thoughts on execution?
 
You can't compare Sydney rates with Brisbane/Toowoomba, because in Sydney there is more rent for the same amount of work. Just forget about 5% in Queensland.
 
I've got a grandfathered agreement on one with RW for 5.5% in BN, the first agency was bought out by a low fee company and their rent roll was bought by RW. Service is fair to average. You can also get a small discount with multiple properties with one agency, I know RE MAX does this
 
Lots of agencies will offer discounts for multiple properties.
Rent roll valuations are however higher if there are not too many multi- property landlords on the books.

Multi property landlords can actually reduce rent roll valuations plus reduce them more by getting a discount!

However- bring more properties on without marketing is a plus.
 
Got a few private message offers and also one below
I'm hoping somersoft member can band together and create a branding...
It could be the same thing as discounts for smoke alarms and also insurance!
We've done this as a family to change banks.. @Morbious - anything is possible..


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PM group discount
Hi Jamontoast

I'm an investor with 3 properties in Brisbane and myself and a few others bought into an apartment block in Brisbane about a year and a half ago. I flew up there personally and interviewed 5 property management agencies to make sure I was finding the right one (as I've generally been sick of terrible PMs). I brought 9 apartments to her and negotiated a rate of 7% plus GST as well as only 1 week letting fees for new tenancies and no other fees.

The reason % is higher in Brisbane (or lower in Sydney whichever way you want to look at it ) is because rents are lower in Brisbane but the costs to run a PM business are generally the same. Therefore PMs need to charge higher % to make the business viable.

I know this because after years of investing and being unhappy with my PMs, myself and a couple of business partners are about to open our new specialist PM agency in Brisbane to be run for investors, by investors with associated services. As I said, we got tired of poor service with PMs not understanding property investment and what we need as investors so we're opening our own! As owners, we're not going to be PMs ourselves (we've head hunted previous PMs of ours with lots of experience who we were really happy with but left) but will be overseeing the business. We'll have a PIPA qualified property adviser on board as well as an investment finance adviser (who I've been using for years for my loans) and relationships with associated services. We'll be targeting investors who get it, not landlords who are just trying to save money...unfortunately, as with anything in life, you get what you pay for. Having said that, we'll be offering a special introductory rate so if you're interested, go to www.mypropertypro.com.au and enter your email and can keep you updated. My number is 0402 141 725 if you want to chat on the phone. We have a lot of interest from investors we know in Toowoomba already so we plan on expanding there within a few months of opening in Brisbane.

It's good thinking though re the group discount. I've used it a couple of times and it does work as if a manager takes on a bunch of properties at once, they're obviously growing their business quite quickly as well as adding capital value to the business in the form of additional managements on the rent roll. It does have to be viable though and if the price is too low, unfortunately you'll find the service levels drop with it.

Good luck with your investing
 
Lots of agencies will offer discounts for multiple properties.
Rent roll valuations are however higher if there are not too many multi- property landlords on the books.

Multi property landlords can actually reduce rent roll valuations plus reduce them more by getting a discount!

However- bring more properties on without marketing is a plus.

Hi Xenia

As a landlord with multiple IPs having launched our specialist PM business servicing Brisbane and Logan City I am being approached about discounts for multiple properties in addition to a recent request for a % quote for 'rent collection only' - after exploring the issue further I learnt that the wish list for 'rent collection only' included significant property management services as well - had to define the boundaries between those service options clearly - what position have you undertaken re: 'rent collection service only'?
 
Lots of agencies will offer discounts for multiple properties.
Rent roll valuations are however higher if there are not too many multi- property landlords on the books.

Multi property landlords can actually reduce rent roll valuations plus reduce them more by getting a discount!

However- bring more properties on without marketing is a plus.

I think all agencies would discount for multiple listings we certainly do.

I don't think having landlords with 2-4 properties on rent roll really impacts the valuation much, more than 4 I would say they would start discounting, a rent roll in Brighton Vic just sold and one owner had over 100 properties on it himself, think that might have impacted the value slightly!
 
Wow one landlord with 100 properties would certainly impact the valuation. We had our rent roll valued in 2009 - I don't remember exactly how multi landlords affect the valuation, but do remember the valuer discounting the value based on our multi- property landlords. The most anyone would have had were 6 properties.

That would not stop me offering a discount for multiple properties however - we do!

Renee, we usually don't do rent collection only - unless it's commercial, as you said when things go wrong it's difficult to know who chases what - if they are collection only, are they on the arrears list or not when payments are late?

Setting clear boundaries is a good idea as clarity is needed to avoid misinterpretations later.

Also if landlords are not doing the rest of it correctly, legal notices not served on time or worded incorrectly etc.... It makes it impossible for proper tribunal representation later if we need to step in. In fact it's almost always a mess!
 
I remember starting out my business in around 2005. I went to see one of my first ever landlords in Henley beach SA and after going through the presentation of how we manage properties he asked how many I was managing - I very reluctantly told him 11, he then asked how many of those are mine - I wanted to run out of the room screaming - but I just looked at him and said 10 of them .

The other one was my friends!!!

Those were not easy times lol - everyone has to start somewhere!
 
So he would have been able to negotiate a very keen price as he could move them in any case an purchase the scraps ;)

The whole value was excluded, he basically had them over a barrel because if they didn't sell to him he would have taken the properties with him to another agency he would have bought. The current agent had staff and infrastructure to deal with his properties that would no longer have been required. Average rent on his own properties is over $800pw, so he got a sweet deal:)
 
Wow one landlord with 100 properties would certainly impact the valuation. We had our rent roll valued in 2009 - I don't remember exactly how multi landlords affect the valuation, but do remember the valuer discounting the value based on our multi- property landlords. The most anyone would have had were 6 properties.

That would not stop me offering a discount for multiple properties however - we do!

Renee, we usually don't do rent collection only - unless it's commercial, as you said when things go wrong it's difficult to know who chases what - if they are collection only, are they on the arrears list or not when payments are late?

Setting clear boundaries is a good idea as clarity is needed to avoid misinterpretations later.

Also if landlords are not doing the rest of it correctly, legal notices not served on time or worded incorrectly etc.... It makes it impossible for proper tribunal representation later if we need to step in. In fact it's almost always a mess!

Excellent insights - thank you
 
I remember starting out my business in around 2005. I went to see one of my first ever landlords in Henley beach SA and after going through the presentation of how we manage properties he asked how many I was managing - I very reluctantly told him 11, he then asked how many of those are mine - I wanted to run out of the room screaming - but I just looked at him and said 10 of them .

The other one was my friends!!!

Those were not easy times lol - everyone has to start somewhere!

Wonderful share And look how far you have travelled since as a PM!
 
This thread has gone off topic or that i didn't specify myself clearly.

I was hoping to see if we can band members together to move services to a single PM. I don't necessarily have multiple IPs in the same location so hence the question.

Its a big ask which hasn't gotten too much heat at the moment.
 
This thread has gone off topic or that i didn't specify myself clearly.

I was hoping to see if we can band members together to move services to a single PM. I don't necessarily have multiple IPs in the same location so hence the question.

Its a big ask which hasn't gotten too much heat at the moment.

Its a great question however a very broad one. Who would manage such a process?? What methodology would be undertaken to explore best PM services to go with for literally thousands of areas across Australia - that would be a significant project management role requiring expertise requiring remuneration - fees charged are one aspect of PM, the other aspect is the quality of a PM service (no point paying very low fees with poor service and impossibly high caseloads per PM to keep rates low) ...there is a lot to explore with this broad question posed - love all the perspectives and ideas shared on SS
 
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