Renting out a Frankston IP?

[Skeetaboat]

Hi, just wondering if anyone can share their experiences with property managers in the Frankston area (good and bad)?

And also what people paying in PM fees in Frankston and surrounds? I've been quoted between 6-7% management fee and around 3.3% letting fee. One agent gave a one off letting fee of 1.5 weeks rent, which seems more reasonable than an ongoing 3.3% fee no matter how long your tenant stays (eg 2 year tenant would cost in excess of $1000 wth the ongoing fee versus $550 with the one off fee). What do you pay?

One agent says $360 is the maximum you're likely to get in Karingal (4 bed/2bath/2 living), no matter how much you improve/renovate. True?

Oh, and how does it go with getting a rental appraisal from a different agent to the one you're buying from during settlement period? (We did not negotiate access for this in our sale contract).

Please share your experiences! TIA

 

[Monopoly]

I have properties right along the Mornington Pen, including Frankston and my MP fees are 5.5% (including GST) with 1.5 weeks rent as the standard letting fee.

Shop around, fees above 6% IMO are a tad on the high side for my liking, but then I guess it depends on how many properties you bring to the table. Obviously the more business you dangle in front of them, the more negotiation power you have to play with!!!

 

[SeafordSunshine]

get as much info as you can!

You can ask other agents to give a rental appraisal.
Is the house vacant? If so, ask as many Rental agents to view the property and take into account if they come on time, if they actually answer your questions,
and most importantly if you can get on with them.
Ask other questions like who will actually be managing my property? Will they fob you off onto a junior?
Do they have any other on going fees or charges. Do they go to the tribunal as a matter of course, or is it a last resort?
Ask what kind of demographic profile would like to rent this place. Do you have prospective tenants on your books who I would approve of?
Ask to see that tenants application for tenancy. If they have something to hide, you dont want them!
I have used a few agents in Frankston and if you PM me I will tell you what I know about their practices that you dont want!
congratulations
Gipsland

 

[Monopoly]

One agent says $360 is the maximum you're likely to get in Karingal (4 bed/2bath/2 living), no matter how much you improve/renovate. True?

False!! I have seen bidding rental wars where prices just to occupy a property have skyrocketed, exceeding landlord (and observers) expectations!!

The market will determine a reasonable price, supply and demand will determine the ACTUAL PRICE PAID!!

However, you don't want to be renovating to the point of over-capitalising the property because in that scenario, you stop value-adding and start depleting unnecessary funds, better spent elsewhere.

Exercise a little caution, a lot of common sense, and above all DO YOUR HOMEWORK.

 

[meconium]

I own enough property locally that I'm seldom charged letting fees. The local agents compete for my business. I usually pay no more than 5% in fees.

Problem is most local RE rental staff are incompetent. Some are fresh out of high school and are sucked in by tenants' sob stories about why they cannot pay.

The rental agents collect rent and happily pocket their 5%. But they often fail to pay outgoings like rates, taxes etc - ie. they aren't doing their job. Nothing worse than getting hate mail or phone calls from the council or water authority demanding monies that they should have received.

I spread my business with a number of firms. I've dealt with 6 local agents and none impress me - they vary from incompetent to stupid, with a little bit of pedantic malevolence thrown in.

Frankston is a great place to invest. Even at current prices, there is still much room for capital gain. But don't expect too much from the people managing your rental properties. I don't mean to be rude but, for the most part, they are dunderheads.

Andrew Gillespie from Hocking Stewart takes the prize when it comes to pedanticism - this man will happily pocket his commission and will never go that extra mile for you. His staff have a bad attitude towards landlords. Take your business elsewhere. When things go wrong, this firm will not do the right thing by you.

 

[Skeetaboat]

Thanks for replying

Meconium - thanks for sharing. Which two or three would you recommend most, given what you've got to choose from in Frankston? Or maybe it would be easier to tell me which ones to avoid most!! Feel free to PM if you think it needs to be off-boards.

Monopoly - are you talking about properties in Frankston that have had rental wars? I don't think we'll overcapitalise by renovating (we only plan on spending 20K, mostly cosmetic with a couple of structural changes). But I do wonder how realistic the PM's claims are that renovation won't attract more rent? Is it true that the renting demographic in Frankston would rather save $30 pw in rent and live with 40 year old kitchen and bathrooms than fork out the extra rent to live in a nice modern place?

Seaford Sunshine - we haven't settled yet. Do you think we can get the sales agent to allow open it up for us to get competing agents to come in and do a rental inspection? Thanks for the tips.

 

[Monopoly]

I own enough property locally that I'm seldom charged letting fees. The local agents compete for my business. I usually pay no more than 5% in fees.

Is this inclusive of GST? If it's not, then (hate to burst your bubble) but for anyone dangling more than one IP in front of an agent competing for business, will offer 5% My fees are 5% but with the GST it takes me to 5.5% which is pretty standard for multiple property management.

As for the letting fee; now that's another matter. If you're getting off without being charged these, kudos (well done). However, I'd be very weary of agents who do that; I have had agents say they won't charge letting fees, and they honoured that promise, but wouldn't manage their way out of a wet paper bag let alone, manage my properties properly!!

 

[Monopoly]

Monopoly - are you talking about properties in Frankston that have had rental wars? I don't think we'll overcapitalise by renovating (we only plan on spending 20K, mostly cosmetic with a couple of structural changes). But I do wonder how realistic the PM's claims are that renovation won't attract more rent? Is it true that the renting demographic in Frankston would rather save $30 pw in rent and live with 40 year old kitchen and bathrooms than fork out the extra rent to live in a nice modern place?

I have seen rental bidding wars for properties across Melbourne, including Frankston (South) but that's not to say they are a regular occurrence; just that it can happen if the property is in say popular areas (ie. FHS Zone).

Whoever this agent is, that's giving you this tripe for information, is one you should steer very clear from; he/she doesn't know their right foot from their left!!! And making ridiculous claims such as those you've quoted just confirms that he/she knows diddley about rental market trends!!

Go ahead and do your renos; spend the money only on what HAS TO BE spent on, so that the place is liveable, comfortable and inviting. Anything outside of that, is money spent unnecessarily. What attracts renters is location, access to public transport, proximity to schools, shopping centres (infrastructure), leisure/family friendly places such as parklands, beaches/water etc. Those properties are the ones that command better prices, not how old the kitchen is (although this shouldn't be discounted of course, as one that works is preferable)!

 

[Skeetaboat]

Oooh, another question.. roughly how long to fill a 4 bed/2 bathroom in Frankston? Just wondering in case we can't advertise until after settlement. It's in Karingal area BTW, close to the hub, schools, ballam park etc.

 

[Monopoly]

Oooh, another question.. roughly how long to fill a 4 bed/2 bathroom in Frankston? Just wondering in case we can't advertise until after settlement. It's in Karingal area BTW, close to the hub, schools, ballam park etc.

I could be really cheeky and say "how long is a piece of string?" but I won't!!

Generally 4 bedders will rent out faster than your standard 3, but then it also depends on supply and demand.

As for Karingal, being close to the Hub, school etc will prove a huge plus, as would any property close to such amenities.

Why not check out websites like realestate.com.au properties for rent in the Karingal area, and put a couple in your watch file. See how long it takes; don't take anyone's word for it, gauge it for yourself, it's easy enough to do.

Best of luck; I believe you'll do well.

 

[Skeetaboat]

Thanks monopoly, of course no one can really say, but I was hoping a few peple would say 'never had a vacany problem in frankston!!!'. Alternatively, if others have found that long vacancies can be an issue in Frankston I can start preparing now. Great idea re: realestate.com, I will do that.

 

[schweedy]

I have many friends who rent in the frankston area, and its more people have a problem getting good rentals, than rentals in the area not getting filled.
From experience I can't comment, I've had the same guy renting my place since I moved out 7yrs ago, though I'm sure when he does finally move on, it wont stay empty for long (hopefully long enough to do a good freshen up).

 

[Monopoly]

Thanks monopoly, of course no one can really say, but I was hoping a few peple would say 'never had a vacany problem in frankston!!!'. Alternatively, if others have found that long vacancies can be an issue in Frankston I can start preparing now. Great idea re: realestate.com, I will do that.

Okay, I've "never had a vacancy problem in Frankston!!!"

 

[Monopoly]

I have many friends who rent in the frankston area, and its more people have a problem getting good rentals, than rentals in the area not getting filled.

Absolutely right; it's more a case of securing good tenants rather than getting properties filled. A reality shared by landlord/ladies across the globe!!

 

[Skeetaboat]

What about advertising costs? Is it standard to charge these over and above the letting fee? I can't believe some of the quotes I'm getting Especially if half of them do a poor job!!

 

[lj1074]

I don't mean to be rude but, for the most part, they are dunderheads.

I agree totally with this comment.

I too have used around 6 pms in the local area, before resorting to managing the property myself ... this worked well with the first tenant but disintegrated with the second tenants who would not communicate or report maintenance items. I placed the property back in the hand of a pm hoping the situation would improve, see my earlier post titled pm and the missing rent money. This is the example of service I have received. One agent even told me I was being unrealistic to expect the lawns to be mowed more than once in nine months despite the fact the grass was knee high.

I have resorted to using a pm outside of the area and although in the early days and still monitoring the situation, they leave all the agents I have dealt with in the frankston area hands down.

I will be interested to see who you end up going with and how you go.

Good luck

 

[jingo]

I am currently using the services of Andrew Milne/First National. Cathy Rhodes is my property manager. I have found Cathy to be very good. Inspection reports are conducted every six months. Any problems with rent are chased up and resolved.

I have used other managers in the area, but would happily recommend Andrew Milne/First National.

Regards Jason.

 

[Skeetaboat]

Thanks Jason, first positive report for a PM! What are their fees like?

 

[Monopoly]

I don't mean to be rude but, for the most part, they are dunderheads.

Hey if the shoe fits....I mean really; it's FACT; most of them are dunderheads!!!

Which is why I too....

have resorted to using a pm outside of the area ... they leave all the agents I have dealt with in the frankston area hands down.

preferring to engage PMs not in the same area as the properties (particularly those agents in Frankston).

If you want a recommendation, may I suggest trying Ray White (Carrum Downs); the staff in their rental department are very good!!

 

[buzzlightyear]

Just had one of my Frankston IP's rented out, after some substantial rectification works (new carpet, lino, painting, bathroom vanity, light fittings) and took away the jungle that was the courtyard. It's a 1 bd self contained unit behind a 4 bedroom house.

Took in total four weeks to rent out, at $210pw. An increase of $50pw from the previous rent. Slow time of year, not unexpected as we are in winter but to also get the right tenant after making it a nice to place to live.