Real Estate Agents in Chippendale Area

From: Gavin Finn


Hi All

I am in the process of looking for a real estate agent to manage a 2br property I have just accquired in the Chippendale area. I have had 2 meeting's already but as I am new to the game someone's personal experience would be great. I have been quoted 1 weeks letting fee upon signing a tenant up plus 7.7% mngt fee. I assume this is normal. Also if anyone is managing their own property any info on this would be great.

Any ideas please just post here or to gfinn@mastech.com.au

Thanks
gav
 
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Reply: 1
From: Glenn M


Gavin,

Usually the Letting fee is between one to one and a half weeks rent - seems to be reasonable. However, the Management fee should not be any more than 7% maximum. You should be able to negotiate to this level, or find another agent.


Glenn.
 
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Reply: 1.1
From: John P


Glen if you are intent on getting a property manager, (Which is fine...I have a manager myself) I personally would not accept a commission of anything over 5%. Anything over that is excessive. My manager gets 5% and they do an exceptional job. Chippendale has quite a few realtors and so does neighbouring Surry Hills. Shop around and when you meet them, ask them EXACTLY whey they will do for you as property managers.

One thing to make sure of is that they do a rent review either yearly or half yearly. Many Property Managers don't and the rent ends up falling way below market rates. When that happens it can be very difficult to then bring the rent level up to that of whatever the market dictates at the time.

Hope this helps


John
 
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Reply: 1.1.1
From: G V


Hi John,

Is the 5% inclusive of GST . property manager i have come across has agreed for 5% plus GST. Also which ever property manager i have enquired they seem to add $3-5/monthly admin fee.

GV
 
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Reply: 1.1.1.1
From: Jeremy Laws


Your 7.7 I take it is from Mcgraths. Just say you must be joking and give them 7%. They also ask for one weeks let fee every 6 months which is also ridiculous. I accepted 1 weeks every year, which is still steep. Just be firm and state those as non negotiable. However, DONT under any circumstances stiff agents any more than that. THEY WILL DO (and should IMHO) put your property at the bottom of the list. Pay a fair price (7% no more - in the UK BTW its 15%) and be firm on that. Don't cheat them, they won't cheat you. How would you treat someone who demanded a 30% discount for your services?
 
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Reply: 1.1.1.2
From: John P


Unless I am mistaken my agent does not appear to be charging me GST. If they were I would expect it to be itemised on my statement and it's definitely not there. My sundry fees have not gone up since the inception of the GST either.
 
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Reply: 1.1.1.1.1
From: John P


What I would do in this situation Jeremy is either :
(A) Tell the client that I cannot give that much of a discount

or

(B) Give them the discount and treat them no differently to a customer that did'nt get the discount.......
...........simple!!!
 
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Reply: 1.1.1.1.2
From: Joanna K


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To John P,

Your property manager is not charging you GST probably because they are =not allowed to. You must have signed your management agency agreement =quite some time ago. We are not allowed to charge GST on any contract =signed prior to a certain date (can't remember what that date is). But, =(i think) in 2005 you will start to get charged.


To Everyone else in this discussion,

If your property manager is a good property manager they are well worth =the 7.7% (gst incl.).

As the saying goes, you pay peanuts, you get monkeys.

I charge 7.7% for one property and I have never negotiated this fee =unless people have more than 2 properties to manage. I have never had =anyone walk away because the fees are too high. People compare service =with service.

Kind regards

Joanna Karavasilis
Principal
THE RENTAL SPECIALISTS

Ph: 02 9599 3363
Fax: 02 9599 3447
Email: rentals@rentalspecialists.com.au
Web: www.rentalspecialists.com.au


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To John P,

Your property manager is not charging =you GST
probably because they are not allowed to. You must have signed
yourmanagement agency agreementquite some time ago. We =are not
allowed tocharge GST on any contract signed prior to a certain =date (can't
remember what that date is). But, (i think) in 2005 you will start =to get
charged.


To Everyone else in this =discussion,

If your property manager is a good =property manager
they are well worth the 7.7% (gst incl.).

As the saying goes, you pay peanuts, =you get
monkeys.

I charge 7.7% for one property and I =have never
negotiated this fee unless people have more than 2 properties to =manage. I
have never had anyone walk away because the fees are too
high.Peoplecompare service with service. =

Kind regards

Joanna Karavasilis
Principal
THE RENTAL SPECIALISTS

Ph: 02 9599 3363
Fax: 02 9599 3447
Email: rentals@rentalspecialist=s.com.au
Web: www.rentalspecialists.com.au=


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GST free Property Management

Reply: 1.1.1.1.2.1
From: Michael G


Hi,

What Joanna has mentioned comes under...

"A NEW TAX SYSTEM (GOODS AND SERVICES TAX TRANSITION) ACT 1999 - SECT 13:

which covers "Existing agreements: no opportunity to review "

Its quoted below. But basically it covers things like property management agreements. You have to re-read your contract. If there was nothing in there to allow review in case of changes to anything, then it can't be review until "1 July 2005". But I would appreciate it, if Dale could add some light on to this topic.

I understand some property managers sent out new contracts to be signed when the GST came out, to bypass this law. Check your previous contract see if they were any review clauses and take this issue up with your account.

Here's the section of the act...

SECT. (1) This section applies if:


(a) a written agreement specifically identifies a supply and identifies the consideration in money, or a way of working out the consideration in money, for the supply; and
(b) the agreement was made before the day on which this Act received the Royal Assent.


(2) The supply is GST-free to the extent that it is made before the earlier of the following:

(a) 1 July 2005;
(b) if a review opportunity arises on or after the day of Royal Assent--when that opportunity arises.


(3) If all of the consideration was paid before 2 December 1998, the supply is also GST-free to the extent it is made on or after 1 July 2005 but before a review opportunity has arisen as mentioned in paragraph (2)(b).
(4) However, if the recipient of the supply would not be entitled to a full input tax credit for it, treat the references in paragraphs (1)(b) and (2)(b) to the day of Royal Assent as references instead to 2 December 1998.

(5) In this section:

"review opportunity", for an agreement to which this section applies, means an opportunity that arises under the agreement:


(a) for the supplier under the agreement (acting either alone or with the agreement of one or more of the other parties to the agreement) to change the consideration directly or indirectly because of the imposition of GST; or
(b) for the supplier under the agreement (acting either alone or with the agreement of one or more of the other parties to the agreement) to conduct a general review, renegotiation or alteration of the consideration.

Regards
Michael G.
 
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Sim

Administrator
GST free Property Management

Reply: 1.1.1.1.2.1.1
From: Sim' Hampel


If the management agreement was indeed a contract for a fixed term with no avenue of review then I would agree with the conclusion of no GST until 2005 or whenever it was.

HOWEVER, none of my management agreements are contracts which are fixed in term. By giving the agreed amount of notice (60 days) in writing either the manager or I can vary or cancel the agreement.

So what happened when July 1 2000 rolled around (well before hand actually), my property manager sent out a variation to the agreement stating that I will now be charged GST on the relevant parts of my management fees.

You need to check the wording of your agreement.

 
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Reply: 1.1.1.2.1
From: Donna Larcos


Try David McElwain at Raine & Horne
Newtown. They have a 5% commission
and I think the second relet is 1/2 a week.
Donna L
 
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Reply: 1.1.1.1.2.2
From: John P


Hi Joanna, with NO disrespect intended (and BTW, thankyou for your info on GST),

I still believe more than 5% is excessive. You made the comment that if you pay peanuts you get monkeys. I would agree with you to some extent. But let me also say once again that my property manager does an Excellent job and always has done (for a 5% commission). I do not consider 5% peanuts and my property manager is not a monkey - in fact my property manager would put most other property managers to shame. (Speaking from experience).

I also noticed on your website that none of the properties being advertised for rent have photos attached. If I was a tenant and I wanted to rent a place and was using the web to do this, I would want to see it. This is how my property manager acquired my most recent tenant. He was a businessman from Adelaide and was moving to Sydney. I was informed by him 3 weeks later that had he not seen a photo of the property on my Property Manager's website, it is unlikely he would have rented it particularly seeing as at the time there were so many others to choose from. It was the presentation that attracted him. If photos are supposedly taken for the client before and after why does each advert say : "Photo not available"?

Why is this not being done for your clients?

John
 
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GST free Property Management

Reply: 1.1.1.1.2.1.1.1
From: Dale Gatherum-Goss


Hello again

Michael, you have quoted the law accurately, but . . . there is often a huge difference between the law as it is written and as it is applied.

This is an area that I am well aware that the tax office are sceptical and concerned about. They will be wary, to say the least.

For example, a change in tenant, an increase in the rental charged, or, as you correctly stated, simply the wording of the contract.

You should expect to pay GST on your agent's fees. Mind you, if they do not, that is their problem and not yours.

For what it is worth, your agent is someone whom you employ to help make you money. Don't be frightened of paying them a decent income as despite all scientific testing to the contrary, they are only human and will look after the people who look after them.

Think about it, vacancy rates are on the increase over the last six months. The agent has 2 properties for rent and one prospective tenant. One of those IP owners want to pay 5% and the other 7%. Which property do you think the agent will push?

Just my thoughts. Have fun!

Dale
 
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GST free Property Management

Reply: 1.1.1.1.2.1.1.1.1
From: Michael G


Dale,

I agree, I've been working on wraps and you wouldnt believe the number of interpretations I here about the matter.

I all for paying fairly for work well done, and always try and ensure that is the case.

But I'm always totally against deception and bad practices. Sadly I cannot remember the source, but I did read somewhere of agents issuing new contracts to bypass this bit of law. When a certain amount of trust is placed in your advisors or team members, its not nice when you are misled by one of them.

For if you're misled one way, then you have to wonder if you've been misled in other ways.

I like walking away from an event with a little more knowledge about a topic, and when a team member takes the time to explain something to me, I really appreciate it.

Just like this little bit of law. Again when it comes to wrapping, there's all sorts of little laws you need to know about to ensure you're doing things right. Maybe this is why I have this view :)

Regards
Michael G.
 
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GST free Property Management

Reply: 1.1.1.1.2.1.1.1.1.1
From: Dale Gatherum-Goss


Hi Michael

I agree wholeheartedly with your thoughts.

Have fun

Dale
 
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