Property mgt benchmarking in WA

S

svamin

Hi Investors,

Have just finished with analysing quotes from a number of PM agencies to manage my property in Perth, WA. Might think this summary could be of interest to a forum reader. Your comments/personal insights are welcome (as I am still deciding). Enjoy :)

The benchmark is given as Annual PM Cost Proxy (Mgt Fee + Leasing Fee + Mkt Costs + 1x Condition Report + 4 x Routine Inspections + Final Bond + Monthly Petties + Account Summary) / 52wk rent estimate * 100%:

De Freitas & Ryan 10.0%
LJ Hooker 17.6%
Elevate 13.8%
Joyce Property 16.9%
Rent West 16.3%
Investors Edge Real Estate 17.2%
GETREAL Estate Agents 12.1%
Crest Residential 14.3%
Century 21 17.4%
Rain and Horne 13.1%
 
svamin said:
Hi Investors,

Have just finished with analysing quotes from a number of PM agencies to manage my property in Perth, WA. Might think this summary could be of interest to a forum reader. Your comments/personal insights are welcome (as I am still deciding). Enjoy :)

The benchmark is given as Annual PM Cost Proxy (Mgt Fee + Leasing Fee + Mkt Costs + 1x Condition Report + 4 x Routine Inspections + Final Bond + Monthly Petties + Account Summary) / 52wk rent estimate * 100%:

De Freitas & Ryan 10.0%
LJ Hooker 17.6%
Elevate 13.8%
Joyce Property 16.9%
Rent West 16.3%
Investors Edge Real Estate 17.2%
GETREAL Estate Agents 12.1%
Crest Residential 14.3%
Century 21 17.4%
Rain and Horne 13.1%
Click to expand...

is the leasing fee only payable on until lease? If so you have to divide that cost by the anticpated turnover rate of new tenants, my experince would be 3 years
 
Bigtone said:
is the leasing fee only payable on until lease? If so you have to divide that cost by the anticpated turnover rate of new tenants, my experince would be 3 years
Click to expand...

You know if someone had some time to make a comprehensive list and report it then theres quite a bit of money in it. I would pay $50 a search to find the cheapest local PM (sort of like choice.com.au)

I have had 3 PM's from the same company managing 1 property in 18months due to turnover. So you cant say company X is the best even though its more expensive because factors change so quickly.
 
Tano said:
You know if someone had some time to make a comprehensive list and report it then theres quite a bit of money in it. I would pay $50 a search to find the cheapest local PM (sort of like choice.com.au)

I have had 3 PM's from the same company managing 1 property in 18months due to turnover. So you cant say company X is the best even though its more expensive because factors change so quickly.
Click to expand...

Interestingly there is a resource 'sellmycastle' claiming to give you this servicw... In my case it gave me only two out of ten agencies from this selection. The rest I had to find by myself... something local ITgeeks might consider a good start up idea.

By the way there is no a single claim which agency is better, moreover I intentionally have not disclose the suburb and locality of agencies. Basically the figuelres on benchmarking are for benchmaeking their costs among agencies, not giving qn investor an accurate proxy of his rental expense.
 
I thought sellmycastle is just a way for all the PM's to contact you. I got one response but ignored it.

If there was a table showing the breakdown of costs across all PM's then that would be handy. All the schedules of costs by PMs are 15+ pages with the costs scattered everywhere and quite often no cost. eg Property Condition Report : cost + 10%. I have no time to email each of them asking to clarify these undiscolsed costs. So yes, a website that compares all PM's costs (and maybe landlord reviews based on the service) is something i would pay for.
 
Or from highest to lowest

LJ Hooker...........................17.60%
Century 21.........................17.40%
Investors Edge Real Estate....17.20%
Joyce Property....................16.90%
Rent West..........................16.30%
Crest Residential..................14.30%
Elevate..............................13.80%
Rain and Horne....................13.10%
GETREAL Estate Agents.........12.10%
De Freitas & Ryan.................10.00%

I've heard of a couple offering an all in one fee of 10%, others discount if you hold more than 1 IP with them. For the majority, they prefer the traditional fee-fest of 8.5% +GST, plus every other fee you can imagine and REIWA would be happy with that

FlickRealty (Duncraig & Joondalup) apparently offer the below at 5.5%

Flick Realty was set up with accessible property management fees in mind and we know that the main requirement by most owner investors is service, an agreeable fee and a low staff turnover.

“We offer 6 Star Service with a written guarantee to back it up, taking the risk from you and placing it squarely on our shoulders.

”Our property management fees are an unbeatable 5.5% (gst inc) management fee which is saving you a substantial amount of money annually to spend else where.
Click to expand...
 
Great comparison but the % eaten by fees will vary due to the rental amount ie any fixed fee like petties or inspection will hammer returns more on a $200/wk g/f than on your Peppermint Grove digs.
 
What rental per week does that assume?

% wise, petties/inspections/reports would be higher for a lower pw rent.
 
HotRod said:
What rental per week does that assume?

% wise, petties/inspections/reports would be higher for a lower pw rent.
Click to expand...

Assumed $420pw. As I said as long as you use the same basis the relative ranking will likely stay the same.

Re low fees it might look great on the paper but one should be cautious about underpaid PMs. The systems and processes should be superb and overheads low to achieve profitability at low % level. We should be mindful about whether PM is properly incentified... look at this from other situation: say a good PM should bring its company 200k, allowing for 120K overheads and profits and getting salary of 80k. Let give him 120 properties and efficient systems to take care of them... So it means a single property shouod bring him 1666pa which is 8% at $400pw×52. It is rough but you have got the picture.
 
Can't believe what i am reading below!

Been with my same PM for 2+ yrs. She has branched out under her own name "Property link WA" recently and is offering 7% + gst management fee. All sundries are reasonable as well. Good to see a someone challanging the excessive rates in perth while still offering quality service.
 
chevycruiser said:
Can't believe what i am reading below!

Been with my same PM for 2+ yrs. She has branched out under her own name "Property link WA" recently and is offering 7% + gst management fee. All sundries are reasonable as well. Good to see a someone challanging the excessive rates in perth while still offering quality service.
Click to expand...

Mate, just take the formula from the first post and calculate the effective cost %... and you will find It might not be as competitive if compared on the same basis.
 
chevycruiser said:
Can't believe what i am reading below!

Been with my same PM for 2+ yrs. She has branched out under her own name "Property link WA" recently and is offering 7% + gst management fee. All sundries are reasonable as well. Good to see a someone challanging the excessive rates in perth while still offering quality service.
Click to expand...

wow, thanks for letting us know, it was especially kind of you to register just to tell us.
 
Tano said:
You know if someone had some time to make a comprehensive list and report it then theres quite a bit of money in it. I would pay $50 a search to find the cheapest local PM (sort of like choice.com.au)
Click to expand...

If only the cheapest meant the 'best'... Finding the cheapest PM is relatively easy. Finding a good one is significantly harder.
 
Newbie here. I read Chevycruiser's comment above and immediately looked up the agent he/she was referring to. She didn't have any current properties available for rent, at least not on her website. Given that Chevycruiser has only made that one comment on this entire forum, can I assume that Sanj's following comment was based in sarcasm? lol
Just checking.
 
Sunnies said:
Newbie here. I read Chevycruiser's comment above and immediately looked up the agent he/she was referring to. She didn't have any current properties available for rent, at least not on her website. Given that Chevycruiser has only made that one comment on this entire forum, can I assume that Sanj's following comment was based in sarcasm? lol
Just checking.
Click to expand...

Sarcasm yes.
 
I just got an appraisal done for my place in Forrestfield by Harcourts in Kalamunda. It wasnt the main reason for her visit, so didnt ask many questions about it.

Management 9.35% of gross rents received
Letting 2 weeks rent + GST
Tenant Enquiry fees $11 per applicant
Advertising $77
Admin $11 per month
Routine Inspection $66
Final Inspection $150
Photography $44
Tribunal Attendance $77/hr
Insurance claims fee "With our compliments" (yay!)
Property Condition Report $99/hr
Financial Year Summary $44
Lease Renewal / Renegotiation $99
All include GST

It also has another option on it of 16% + gst + all fees & charges. Im not sure what this includes, whether its all of the above or not.

Who wants to go halves in a Real Estate Agency with me? :p:cool:
 
Who wants to go halves in a Real Estate Agency with me?
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Theres money to be made.
But are you any good at managing? Because im hopeless so will require you to do most of the work but still a 50/50 profit split :D
 
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