Love that 80/20 rule. The challenge is to find one of the 20 amoungst the rest. That applies to all things in life, not just R/E.
Re-let fee for same tenants staying on another year?
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Love that 80/20 rule. The challenge is to find one of the 20 amoungst the rest. That applies to all things in life, not just R/E.
If it is the same tenant, how much time could it poswsibly take? Our agent doesn't charge us a re-let fee for the same tenant, because, in her words, "All we do is hit print and get the tenant to sign. All the work has been done previously".
Yep, the office, not the PM.
I do know what work is involved in a relet, because I have been doing it for years too, and Lil knows my son is working the same type of job as her. I know he works his buns off. And I know Lil works her buns off too
What I am trying to say (perhaps not very clearly), is that a re-let is a LOT less work than finding a brand new tenant, holding opens, accepting applications, vetting those applications, doing exit condition reports for the outgoing tenants and entry condition reports for the new ones (and aren't they lovely fun?).
I hope your son is enjoying himself there, it can be quite a fulfilling job at times
A re-let does take some work - But no where near the same amount as a new lease. I had a look at work yesterday and we charge a lease prep fee of $35, that's it.
A re-let is a heck of a lot less work, which is why no one should pay a full re-leasing fee.
Jaycee, it's not necessarily a "low" wage - But when you take all the liability involved with such a position and the things you have to put up with, it is.
Also, take into account this wage is usually for a Senior Property Manager, not just someone like me.
Although, I would hope that if that Senior PM is employed at a large Agency with a lot of listings and Junior staff to supervise, and is excellent at their job that they would get above this figure. I'm pretty sure my two top ones do.
AAhh, now Skater, does the 80/20 rule apply to LL's, or should I not go there . No doubt the same goes with remuneration, the better you are at what you do, you should be able to negotiate a rate to reflect that. I think a few have missed the OP being a property manager of commercial property, and yes, its very different negotiating a renewal of a commercial lease.
. No doubt the same goes with remuneration, the better you are at what you do, you should be able to negotiate a rate to reflect that. I think a few have missed the OP being a property manager of commercial property, and yes, its very different negotiating a renewal of a commercial lease.Although, I would hope that if that Senior PM is employed at a large Agency with a lot of listings and Junior staff to supervise, and is excellent at their job that they would get above this figure. I'm pretty sure my two top ones do.
Ah, yes it's a good idea to be paid what you're worth - but alas this is not always the case..
I can tell you ours doesn't..
Oh, absolutely! I am sure it does.
Hmm......but once you have the training and experience, you can then take it elsewhere, if necessary.
I am sure Christine said that one of the reasons that she works where she does was because she was offered a "good deal".
Of course, you are right there, but he should have made that obvious from the start. The Commercial world is a lot different to the Resi world.
I understand that, at times, they may have to put up with some rather ordinary clients, however, what liability do they accept ?
My experience is they accept none.
Hi Wylie
It is the PM who is driving all this. The PM's are booking the certifier, are arranging the repairs (not all certifiers are authorised to repair and as well as inspect!) and communicating back and forth with the landlords and contractors.
The biggest issue is right now trying to get pools inspected before a tenant can move in. You have a vacant house with a pool right now, you can not lease it until you have a certificate in place, meaning new tenants can not legally move in. Government can fine you $16k for doing this, so PM's are madly rushing to get it done. It is a bit easier in units/body corp who have more time but it is the PM's who are getting it done. I had a agent ring me the other day saying a landlord wanted the agent ignore the law and just get his house rented and didnt care about the pool laws and will get it sorted out after the tenant moves in. The agent had to refuse or risk a $16k fine.
It is the PM who is driving all this. The PM's are booking the certifier, are arranging the repairs (not all certifiers are authorised to repair and as well as inspect!) and communicating back and forth with the landlords and contractors.
The biggest issue is right now trying to get pools inspected before a tenant can move in. You have a vacant house with a pool right now, you can not lease it until you have a certificate in place, meaning new tenants can not legally move in. Government can fine you $16k for doing this, so PM's are madly rushing to get it done. It is a bit easier in units/body corp who have more time but it is the PM's who are getting it done. I had a agent ring me the other day saying a landlord wanted the agent ignore the law and just get his house rented and didnt care about the pool laws and will get it sorted out after the tenant moves in. The agent had to refuse or risk a $16k fine.
You don't need to change the base fee. It is percentage based which gives you an automatic increase in income.
That is $36.40 for EACH property under management. In the last couple of years most of mine have gone up in excess of $100pw, based on your 7% of fees that is $364 per property, now lets multiply that by 100 properties (most agencies would have many multiples of this, but let's be conservative) and you get $36400 extra.
Why, oh why, should it always be the Management Department that has to fund the Sales Department? If the Agency is having trouble staying afloat, then maybe it is because they are overstaffed in the Sales Department.
It is great that you have got growth of $100pw of your IP, but for many areas in Qld rents have only grew by 8-10% this year based on RTA reports. Not every property has increased and while we would love this growth, we have to be real. It is also a bit random that you assume that every one of those 100 properties will get $364 increase. If that was the case we all would be agents with those kind of figures per year. I hear your point but generally a agency per 100 properties per year will only generate an extra $5-10k extra in revenue. Residential Tenancy Authority (Qld) show data that supports that IP rents only grow about 8-10% annually. We have to remember as well that not all of those 100 props you mention will increase in rent - based on supply and demand and market conditions. Many parts of Qld right now have seen reductions in rent value and while we are concerned about our return on the IP, the agency also will lose income.
Your comment about agencies and Sales Departments is spot on. It is usually the way but agenices have rent rolls to cover overheads and a little profit. Sales revenue is now considered the cream on the top, but every business will always need them and they just have to be worked harder for results.
Wow! Isn't CPI around 3%? This means there is a growth in income at over 3 times CPI. A bit greedy to be wanting more than this, don't you think?
Hi Skater
This data is averages based on RTA data of bonds lodged by landlords and agents. Not all areas achieved growth. CPI is calculated on a number of areas of consumer needs and the housing sector (one of 11 sectors that make up the CPI) as for the 12 months to September had a 5.2% growth.
As I say, that growth of 8-10% will vary if you have a look at what area you IP is in.
This data is free to access via www.rta.qld.gov.au/Median_rents.cfm
Just find out what region your IP is in, look at the bonds lodged and compare the yearly changes and growth/decline. As I say not all areas are going gangbusters!
I never rely on what the TV says about the CPI, because it covers 11 sectors and will only give you the combined average and you watch, after Christmas the Alcohol and Tobacco sector goes off
I look at the housing sector and financial sector, they are what drives us all in IP's.
This data is averages based on RTA data of bonds lodged by landlords and agents. Not all areas achieved growth. CPI is calculated on a number of areas of consumer needs and the housing sector (one of 11 sectors that make up the CPI) as for the 12 months to September had a 5.2% growth.
As I say, that growth of 8-10% will vary if you have a look at what area you IP is in.
This data is free to access via www.rta.qld.gov.au/Median_rents.cfm
Just find out what region your IP is in, look at the bonds lodged and compare the yearly changes and growth/decline. As I say not all areas are going gangbusters!
I never rely on what the TV says about the CPI, because it covers 11 sectors and will only give you the combined average and you watch, after Christmas the Alcohol and Tobacco sector goes off
I look at the housing sector and financial sector, they are what drives us all in IP's.
Simon, firstly I don't have an IP, I hold several in several different areas and across more than one State.
Secondly, I don't give a flying fig about what is happening in your little part of Australia, because even if things aren't growing at the moment, they will sooner or later, that is how the cycle works.
Thirdly, any good Business Manager looks to their bottom line to cut unnecessary expenditure and retain profits. Holding multiple IPs is a Business with a large asset base. I don't believe that it is good value to pay any more than what I currently pay. When interviewing PM's one of the topics that comes up is how much they charge. It is not the only thing I look at, however I insist that I get value for money.
And finally, I don't understand why so many people say "it's tax deductible" when they want to take a large chunk of money. Whether it is tax deductible or not, it is an expense that cuts into my profits, so this is irrelevant. BTW, I'm not just picking on you with this, there are a whole lot of people that think that if something is tax deductible, then it must be alright.
Secondly, I don't give a flying fig about what is happening in your little part of Australia, because even if things aren't growing at the moment, they will sooner or later, that is how the cycle works.
Thirdly, any good Business Manager looks to their bottom line to cut unnecessary expenditure and retain profits. Holding multiple IPs is a Business with a large asset base. I don't believe that it is good value to pay any more than what I currently pay. When interviewing PM's one of the topics that comes up is how much they charge. It is not the only thing I look at, however I insist that I get value for money.
And finally, I don't understand why so many people say "it's tax deductible" when they want to take a large chunk of money. Whether it is tax deductible or not, it is an expense that cuts into my profits, so this is irrelevant. BTW, I'm not just picking on you with this, there are a whole lot of people that think that if something is tax deductible, then it must be alright.
Skater
Love the energy you have and good for you. I am not defeating your right to negotiate fees, but just wanted to mearly explain the perspective that many investors never see on why agents charge like they do.
I dont really care if you are interested in my neck of the woods or not, I was just explaining were the data came from as you questioned the increase in reference to CPI, which I note you have not commented on as it is clear you don't understand how it really works.
Love the energy you have and good for you. I am not defeating your right to negotiate fees, but just wanted to mearly explain the perspective that many investors never see on why agents charge like they do.
I dont really care if you are interested in my neck of the woods or not, I was just explaining were the data came from as you questioned the increase in reference to CPI, which I note you have not commented on as it is clear you don't understand how it really works.
Skater
Love the energy you have and good for you. I am not defeating your right to negotiate fees, but just wanted to mearly explain the perspective that many investors never see on why agents charge like they do.
I dont really care if you are interested in my neck of the woods or not, I was just explaining were the data came from as you questioned the increase in reference to CPI, which I note you have not commented on as it is clear you don't understand how it really works.
Phfftt! I understand just fine how it works. I fear that you don't understand how an investor works.
Anyway, I'm now bored with this conversation. This now has nothing to do with the thread topic, so I feel it is time to move on.
Phfftt! I understand just fine how it works. I fear that you don't understand how an investor works.
Anyway, I'm now bored with this conversation. This now has nothing to do with the thread topic, so I feel it is time to move on.
You started it LOL
Just wondering if this is correct?
Lease renewed for another year, same tenants, is it standard to be charged a re-letting fee?
Thanks you for your advice
I used to charge 1 weeks rent and sometimes 1/2 weeks rent for renewal... I only ever had a couple of properties which had freebie renewals.
This doesn't seem to be the "norm" however.
