Pure Rentals Property Management Brisbane has just turned one

[rchad]

What is of importance to an investor

Hi Russell

Your flat fees is THE KEY DIFFERENTIAL for me

Second most important aspect - YOUR FOLLOW UP of issues

Third most important aspect - investors want THOROUGH property inspections without an additional fee! and with digital photos to assess wear and tear esp when one has property not close by; photos must include inside the oven; tiled areas/grout areas for mould assessment etc

RC

 

[priscilla]

When I owned my own real estate agency, one of the most effective marketing tools I used was a free period coupled with the lowest fee.

We went against all the big agencies (who in Canberra were charging 10% fees) - we launched with 5% management fees and first 3 months free.

We built our rent roll to 600 in less than 4 years, and sold the business a few months ago.

I think price coupled with amazing service and experience will always win.

I'm about to launch a new business (in my signature block), which will be offering all the tools that a property management department offers, but for $20 a month - and this is what I'll be pushing hard to the market.

Why pay a property manager, who spends on average 1 hour a month on your property? They generally don't have their own investments, or any real experience, and their hourly rate is in excess of $100 an hour!

It's ridiculous, and the industry needs to change - agencies have been making FAR too much money off landlords.

I digress ... push your price!

I cannot agree that a Property Manager spends an average of 1 hour a monh on your property! Maybe thats what your agency did but I certainly would not think that is an industry average we would spend considerably more than that on each property on average. In Sydney with the average management fees there there is no way agencies are making far too much money off Landlords.

Lets do the maths, to find a good experienced PM would cost around $80,000 pa give them an assistant at $50,000 that is a total of $130,000 pa (these are conservative figures in Sydney), add on all other expenses rent, phones, stationary etc etc etc.

In Western Sydney the average rent would be around $350 per week, and the average management fee around 6% therefore returning $1092 pa, therefore that PM team would have to manage 120 properties just to cover their wages - not allowing for any other expenses or the huge profits you discuss!! Obviously these figures alter with higher rents and higher management fees.

I think you are just promoting your own interests here, I dont believe you can offer all the 'tools' as you put it because what clients want is customer service and a positive experience, that is why they hire a PM in the first place.

 

[ashes]

I cannot agree that a Property Manager spends an average of 1 hour a monh on your property! Maybe thats what your agency did but I certainly would not think that is an industry average we would spend considerably more than that on each property on average. In Sydney with the average management fees there there is no way agencies are making far too much money off Landlords.

Lets do the maths, to find a good experienced PM would cost around $80,000 pa give them an assistant at $50,000 that is a total of $130,000 pa (these are conservative figures in Sydney), add on all other expenses rent, phones, stationary etc etc etc.

In Western Sydney the average rent would be around $350 per week, and the average management fee around 6% therefore returning $1092 pa, therefore that PM team would have to manage 120 properties just to cover their wages - not allowing for any other expenses or the huge profits you discuss!! Obviously these figures alter with higher rents and higher management fees.

I think you are just promoting your own interests here, I dont believe you can offer all the 'tools' as you put it because what clients want is customer service and a positive experience, that is why they hire a PM in the first place.

120 properties managed is 15 hours per year, or 1 hour per month (approx). (37.5 hours /week *48 week per year /120 properties=15 hours per property)

So the experienced manager only gets 1 hour per month on your property.

Just wanted to point out your sums don't quiet match your argument.
However that 30 hours (both people) is only $36/hour, so hardly over payed.

$1000 just does not buy very much.

 

[BeYourOwnAgent]

120 properties managed is 15 hours per year, or 1 hour per month (approx). (37.5 hours /week *48 week per year /120 properties=15 hours per property)

So the experienced manager only gets 1 hour per month on your property.

Just wanted to point out your sums don't quiet match your argument.
However that 30 hours (both people) is only $36/hour, so hardly over payed.

$1000 just does not buy very much.

Thank you - saved me writing the reply myself.

 

[melliemellie]

Congratulations on your first year of business!

All the best for the future

 

[russellpeter]

Congratulations on your first year of business!

All the best for the future

Thanks this is a old post and about a month away from the end of year 2

but feels like we are still at the start and enjoying every moment of it.

 

[Peterw]

120 properties managed is 15 hours per year, or 1 hour per month (approx). (37.5 hours /week *48 week per year /120 properties=15 hours per property)

So the experienced manager only gets 1 hour per month on your property.

Just wanted to point out your sums don't quiet match your argument.
However that 30 hours (both people) is only $36/hour, so hardly over payed.

$1000 just does not buy very much.

Ashes, not sure which way you mean the statement
"$1,000 just does not buy very much"

Just stepping it a bit further, 15 divided by 12, is a bit more than 1 hour per month. $1000 is just over $80 per month, with your wages calculations of $36. While that calculation is just that, a calculation. Does the office receptionist not also need to be considered, as does the end of month processor, who distributes that funds, the IT person, who keeps the software functioning, the accountant who audits the records, to ensure your interests etc are protected, not to consider the rent, power etc?

I have admiration for those that self manage. They have made a decision to commit a degree of their time to do so. Some do it better than others, as we can all see by the types of questions asked on this forum. However, some look at the time they spend, but a value on it, and think it’s better for them to pay to have it done. I do think that some, do not put a value on their time, and then think what they may be making saving. If they have the time to spend great, however if they are time poor, maybe it’s time to rethink, and see what else you could do with the time saved. As a father, I won’t say any more.

The only other comment I would like to make is insurance. I do know that I am opening myself up to a claim from my friend on this forum of being lawyer panicked, but insurance is an important consideration. We have at least one member of this forum, who I know is still fighting his insurance company over his 2011 flood claim. At least he has insurance, and believes it has the right “cover” items and level’s. Having been in the industry for over 30 years, and having had to deal with claims from accident to death over my time, I have developed the view that insurance is a pain in the a.. when the premium arrives each year, however you are thankful you have it when a claim arrives.

 

[BeYourOwnAgent]

Ashes, not sure which way you mean the statement
"$1,000 just does not buy very much"

Just stepping it a bit further, 15 divided by 12, is a bit more than 1 hour per month. $1000 is just over $80 per month, with your wages calculations of $36. While that calculation is just that, a calculation. Does the office receptionist not also need to be considered, as does the end of month processor, who distributes that funds, the IT person, who keeps the software functioning, the accountant who audits the records, to ensure your interests etc are protected, not to consider the rent, power etc?

I have admiration for those that self manage. They have made a decision to commit a degree of their time to do so. Some do it better than others, as we can all see by the types of questions asked on this forum. However, some look at the time they spend, but a value on it, and think it’s better for them to pay to have it done. I do think that some, do not put a value on their time, and then think what they may be making saving. If they have the time to spend great, however if they are time poor, maybe it’s time to rethink, and see what else you could do with the time saved. As a father, I won’t say any more.

The only other comment I would like to make is insurance. I do know that I am opening myself up to a claim from my friend on this forum of being lawyer panicked, but insurance is an important consideration. We have at least one member of this forum, who I know is still fighting his insurance company over his 2011 flood claim. At least he has insurance, and believes it has the right “cover” items and level’s. Having been in the industry for over 30 years, and having had to deal with claims from accident to death over my time, I have developed the view that insurance is a pain in the a.. when the premium arrives each year, however you are thankful you have it when a claim arrives.

It doesn't take much time at all, and those that self manage know this as a fact.

11 months out of the year you generally don't hear anything from the tenant - apart from some maintenance, which you then outsource to the relevant maintenance company, who then liaise with the tenant for access.

Rent increases and renewals? 15 minutes research on comparables and then the increase letter and lease to the tenant.

Releasing? Advertising (using the same ad and photos as last time), and 30 minutes on a Saturday to run the open home and hand out application forms.

Processing of application and signing new tenant? Picking your most suitable tenant, followed by a 10 minute phone call to check references. Next step is filling out the tenancy agreement and associated documents and emailing to the tenant. 30 minutes tops.

That's about it folks!

Yes, there will be issues along the way, but it's all common sense, backed by a basic understanding of the rules and regulations.

The old saying holds true - 5% of your clients generate 95% of the workload. The other 95% of the clients remain silent through the year until renewal or vacating.

 

[rchad]

Service is critical eg. some landlords wait 1.5 years for BC issues to be followed up - service is what landlords are looking for and thinking outside the box to solve problems

I just noticed your poll questions.



yes i would rather take over the property now and manage it for free than leave it in the hands of property managers who are not working to maximize your returns.



we have a 7 day exit clause for all our clients.



min standards on all my property are professorial photos and scripts.

helps me get a tenant faster. helps promote my business and gets a higher rent. it just makes sense to have this. with the scrips one of my staff has a double degree in English literature and journalism . so all scripts are of a good standard.

see link to current marketing Gordon st photos are getting refreshed when the property is vacant.

http://www.realestate.com.au/rent/by-dadtem/list-1

 

[property_girl]

It doesn't take much time at all, and those that self manage know this as a fact.

The old saying holds true - 5% of your clients generate 95% of the workload. The other 95% of the clients remain silent through the year until renewal or vacating.

Beyourownagent, I agree with you that it doesn't take much time at all to self-manage; that is, if you have a good tenant. I self-manage one place with a great tenant. She will contact me only if there is a real issue such as a shower leak.

However, if you have a nightmare tenant (and I have one) then a good agent is worth their weight in gold. I wouldn't--and couldn't--manage this ppty because I wouldn't be able to manage the tenant.

 

[D.T.]

But how would you know whether the tenant is good or bad until you've had them for a while? And what if they change from good to bad or vice versa after say 6-12 months?

Anyone who self manages is defeating the purpose of property investment in my opinion.

 

[Neptune]

We tried self managing once....tenant was a lawyer nonetheless.....and boy did she start to let us know what her rights were. Fortunately she moved out after her lease was up and we went through a property manager. New tenants have been there for 7 months now and we've not heard diddly from them since they moved in. Never going to self manage again.

 

[Xenia IM]

The flat fee is certainly a striking point of difference.

 

[Nattl3s]

Congrats on 1 year of business. I think word of mouth is a powerful way to grow so keep your current clients happy. Good luck for the future, cheers nat.