REA or more expensive PM?

[Soontoberich]

I have had quotes from an rea and a P.M. The latter is more expensive but I think they may be more trustworthy compared to the rea. I understand that you get what you pay for but..

P.M. fees:

8.5% management fee
2 and a half weeks rent for new tenant
1 and a half weeks for re-signing existing tenant
$150 advertising
$15 credit check
plus incidentals (postage, etc.)

This appears to be more than most people here seem to be paying. I don't mind paying a bit extra for a professional service, but is this too much?

 

[Empty Pockets]

I'm not convinced fees can correlate with performance.

My cheapest PM at 6.6% is the best.

 

[65fbk]

2 and a half weeks rent for new tenant
1 and a half weeks for re-signing existing tenant

I don't like these.. Should be able to get a new tenant for 1 weeks rent, and nothing, or small fee to renew.

 

[Propertunity]

I don't mind paying a bit extra for a professional service, but is this too much?

I agree with the others. I would not pay it personally. I think it is too much.

I don't pay for advertising.
5.5 - 6.6% I'm OK with. I won't pay 7.7%
I'm not paying for credit checks either - my PMs cover that in the first week's rent they keep (not 2.5 weeks either!!)

 

[Soontoberich]

Thanks for the reply guys.

Is it worth trying to negotiate the P.M. down or should I consider agents?

Its just that every dealing that I've had with a rea has been negative (although that is as a buyer - this is the first property I'm renting). Am I cynical to think that rea's are not to be trusted?

I could try looking for another P.M but I'm having trouble finding a local one (outer east melbourne).

 

[Empty Pockets]

Maybe post...looking for a PM in X suburb.

 

[forumite]

What's the difference between a REA and a PM?

Thought that most real estate offices will have both services of property management and sale, with different staff handling the two services separately.

 

[skater]

8.5% management fee
2 and a half weeks rent for new tenant
1 and a half weeks for re-signing existing tenant
$150 advertising
$15 credit check
plus incidentals (postage, etc.)

Seems to me that the PM should have the username Soontoberich, with fees like that.

My best agents charge me 5.5% and one week letting fee, nothing else. Nothing for re-signing, afterall, they don't actually have to do any work for this, except send out a form for the tenant to sign. Advertising is a joke. Most just have a list that potential tenants come to view, and they might include a small one-liner in the newspaper, along with all the additional stuff they have. Total cost to them is minimal.

I only have one property in VIC, so don't know if it is a locallity thing with those prices, but I would surely look around.

 

[Propertunity]

What's the difference between a REA and a PM?
Thought that most real estate offices will have both services of property management and sale, with different staff handling the two services separately.

You're right, but there are some REA that do Property Management exclusively. i.e. they don't do sales.......and I think that was what the OP was referring to.

 

[empire]

I have had quotes from an rea and a P.M. The latter is more expensive but I think they may be more trustworthy compared to the rea. I understand that you get what you pay for but..

P.M. fees:

8.5% management fee
2 and a half weeks rent for new tenant
1 and a half weeks for re-signing existing tenant
$150 advertising
$15 credit check
plus incidentals (postage, etc.)

This appears to be more than most people here seem to be paying. I don't mind paying a bit extra for a professional service, but is this too much?

Hello

These fee's are excessive.

Even when property management companies charge excess fee's there is still no guarantee that you will get a professional service.

When you interview for your new property manager make sure you have good communication with them and they know what you expect from them.

Ask them a few simple questions for example how do they handle communication do they guarantee same day call back when you wish to talk with them. What is there procedure to minimise vacany between tenancies to avoid unnecessary holding costs for you. Do they actively pursue rental increases inline with market trends to offset your holding costs. What is there office procedure with arrears? Do they have the latest software to alert your property manager quickly and efficiently

Do they hand out keys to prospective tenants. Our office
ensures all tenants are accompanied when viewing properties.
Aside from maximising the security and protection of your
property, this procedure enables us to more accurately gauge
the appropriateness of a tenant for the property investor with
constructive feedback.

Do they provide entry and exit condition reports with photo's to protect your asset. Do they conduct six month inspections?

And most importantly are they active property investors themselves rather than it is just a job for them.

I hope this might help when it comes to interviewing your property manager.

Regards