Queensland Property Management

[redwing]

Queensland Property Management


Just having purchased a QLD property in a residential complex we’re looking at the PAMD Form 20A (Appointment of Agent-Letting and Property Management).

The Paperwork is different from any of the Western Australian Authority forms that we’ve signed, with the WA forms it’s usually a case of going through and ‘adjusting’ the myriad of fees and charges andchecking the conditions, i'm sure it's no different here,however, is there anything we need to be aware of for the QLD forms other than:

1.Tick One Box in page 1 and record our ABN

2.Tick One Clause in paragraph 4.4 in page 2 and initial

3.Sign where indicated in Part 8 on page 4

4.Complete Insurance Details in part 10

5.Sign where indicated in part 20

Part 5 Commission appears to be-

• $13 per week of the lease (5% of Rent)
• $260 letting fee per lease (1 weeks rent letting fee)
• GST $1.30 p/w of the lease +26 (10% of the commission)

TOTAL $14.30 p/w of the lease +$286



However, Schedule to PAMD Form 20a -Permanent lettings Fee’s and charges (GST inclusive) is:

• Rent Collection Commission (5.5% of Rent)
• Management Fee (2.75% of Rent)
• New Tenant Let fee (1 weeks rent + GST)
• Window cleaning charge per month (not applicable)
• Postage,Phone,fax costs ($5.50)
• Pest control charge per year (Pest Control companies current rate at time of treatment)
• Letting Agreement Negotiation/renewal fee (one half of one weeks rent +GST)
• Quarterly Inspections (No Charge)
• Mediation/Tribunal fee per hr (By arrangement)
• Replacements (actual cost of item, plus labour at $22 p/hr for obtaining, supplying, installing)
• Maintenance/repairs (actual cost of item, plus labour at $22 p/hr for arranging such repairs and maintenance)
• Bin Cleaning/lawn mowing/gardening (up to $10 p/wk)

As with any contract I guess the devils in the detail and there are some other Parts that I’m looking at, it appears that the agents can also rent items to the tenants in the complex (hey…......no cut for me?)


Also, it appears standard with these types of deals that they want any new purchaser to accept the purchase/transfer with the tenant intact(makes sense for them as they get no money for an owner occupier, tenants are preferred)

Advertising is written down as 'actual cost' so I uses I’ll be putting a limit there.

Anyone who has any QLD IP's have any tips?

 

[Raddles]

HI there
the only other thing to review is perhaps the notice you can give to terminate the relationship - your preference but 30 days is the norm
thanks

 

[sailor]

Redwing, what suburb is the property in please?

 

[redwing]

8 Mile Plains

 

[sailor]

Sorry Redwing...can't help you there...mine are all up north...and I tend to negotiate a bit with the one PM I do use.

 

[redwing]

And there I was hoping to glean a pearl of wisdom sailor

Having read through the document nothing outlandish has jumped out at me yet, it's cheaper than WA, however, it'll be interesting to see what everyone esle thinks about the fee structure above, is this the norm for BrizVegas?

 

[Raddles]

Hi there Redwing
your fee structure seems very similar to what we have for a property in Spring Hill - though we don't have any gardens etc and we also have a slightly higher charge for short term lettings. Unfortunately I can't comment on 8 mile plains either.

 

[Les]

G'day Redwing,

Whew!! Quite a list - I wonder if they keep this aside especially for WA landlords

In short, I only have 2 that are managed by RE - one at 8.8%, and one at 6% (longstanding, same tenant for 7 years).

Let's take a look:-

• $13 per week of the lease (5% of Rent)
• $260 letting fee per lease (1 weeks rent letting fee)
• GST $1.30 p/w of the lease +26 (10% of the commission)

TOTAL $14.30 p/w of the lease +$286

This all seems right so far - 5.5% ongoing, with one week's rent for a new tenant - it's all cool.

However, Schedule to PAMD Form 20a -Permanent lettings Fee’s and charges (GST inclusive) is:

• Rent Collection Commission (5.5% of Rent) [color = blue]perhaps fair enough if they have to COLLECT it, but if tenant pays them (and comes to them), it's not on!![/color]
• Management Fee (2.75% of Rent)
• New Tenant Let fee (1 weeks rent + GST)
• Window cleaning charge per month (not applicable)
• Postage,Phone,fax costs ($5.50) some PM's do add this... helps with their CHristmas party I think...
• Pest control charge per year (Pest Control companies current rate at time of treatment)
• Letting Agreement Negotiation/renewal fee (one half of one weeks rent +GST) NEVER heard of this one - but time does move on.. But WHY are they charging GST when the original "one week's rent" didn't have it?
• Quarterly Inspections (No Charge)
• Mediation/Tribunal fee per hr (By arrangement)
• Replacements (actual cost of item, plus labour at $22 p/hr for obtaining, supplying, installing) Never heard of this one - if I need a sparky, or other tradesman, the PM is not involved. But even when they HAVE been sourcing tradies, my PM's have NOT charged extra - I'm already paying them for "looking after" the property for me....
• Maintenance/repairs (actual cost of item, plus labour at $22 p/hr for arranging such repairs and maintenance)same as above
• Bin Cleaning/lawn mowing/gardening (up to $10 p/wk)What??? How much EXTRA is this PM doing??

What I think I'm hearing (apart from those "outside the square" situations) is that you will be up for 5% + 2.75% (+$5.50 for petties) = 7.75% (+10% GST) = 8.525% + petties. Sounds about right. But DO check out my comment in Blue re the "extras" - most of them are news to me too.... and I'd be questioning them. If your PM becomes a bit precious over your questions, I'd be looking for another not so precious. When you think of it, the standard 8% is pretty good as rental values continue to rise (above inflation),

Regards,

 

[Jaffasoft]

Hi RedWing,
I'm proud that you have bought another property!

I also think you have bought in a good demographical area with everything that is happening and what will happen in S.E Qld and around Brisbane.

Is the property post 1985 for tax depreciation purposes or advantages? Can you give some stats of the properties purchase price, rental income, land size? Can it be sub-divided or developed further down the track in some way?

What was the determining factors in purchasing the property. Did you get a discount on the listed price, was there any negotiations that came into play to get the end purchase price? How did you end up financing...using a deposit or equity in some you already own? What was the LVR before purchasing?

I'm not far from that location let me know if you need anything done on site I will possibly be traveling through there next week or two will schedule it in if there is anything I can help with.

Few questions sorry, just curious and interested!

 

[redwing]

Thanks for the Feedback Les;

I should’ve explained in the post that the property is a townhouse in a gated complex, with residential management available on-site (the residential manager has been managing the property prior to this).

The residential manager is available to conduct small repairs and maintenance.

 

[redwing]

Hi Jaffasoft


Hopefully it turns out to be a good purchase, I'm pretty confident though after a lot of looking around we decided on a couple of areas of interest , I was informed by a fellow investor that a property next door sold for $15 1/2 k more than what we paid for ours a year ago

The property is a 3x2 townhouse

We used the equity achieved in Perth’s great CG run to pay Stamp Duty and associated costs in this acquisition

Yield is around 5.75% plus depreciation benefits with a rent rise due in a couple of Months to catch up to the market

The IP is only about 6-7 years old, I have Scott and the team from www.depreciator.com.au on the job

Negotiations were fun with the REA saying I couldn’t put an offer in as ABC Pty Ltd ATF XYZ and with him being off-side for this and some of my other conditions the negotiations were interesting; throw into that mix another four (4) interested parties and me being in Perth, the owner in Sydney and the IP in QLD I was a bit nervous about the whole thing until documents were signed.

Next move is some additional Managed Funds to assist with cashflow and to use some lazy equity, plus our SMSF is nearly established (I've considered Super "dead money" until now and am still peeved about the days of being charged management fee's for -6% returns, at least if i get a -6% return its my own fault) I'm excited by the ability to build our SMSF

One day down the road; doing a development or two is our plan, with a new baby due any day soon though we'll have to wait

 

[Jaffasoft]

Thanks for that. All the best.

"Perth, the owner in Sydney and the IP in QLD", the communication age hey.

Sounds like you have got a quality building which will be low maintenance and hassle free once the finance & lose ends is sorted out then you will be able to sleep easy at night..until the little one comes along!

Sounds as though since it's gated and a newish type dwelling that it will attract perhaps a good elderly tenant or a quality tenant for that matter. 5.75% Yield for that area seems about the norm from what I have read.

Come the rent rises and CG in a couple (few maybe) years and things will balance out better.

Is the 3x2 3 houses on a block of land each with 2 BR? Do other investors own the other dwellings on separate titles how can it be developed later? Will you be able to just re-develop your title block with something suitable to blend in with the existing character?