suggestions needing - approaching my old PM

[karina]

Hoping to get some ideas from the forum.

I am currently in a situation where I had an agreement in place with a real estate agency for a % fee to manage my properties + 1 weeks rent.

They sent me a lovely letter stating that their costs had increased and they were increasing their fees and they could no longer continue with our agreement. (I have several properties with them)

Now they want -
$220.00 relet fee (highway robbery)
2 weeks rent for new lease
$110.00 for initial property condition report
$45.00 quaterly and six weekly inspections
$88.00 final condition report
$44.00 each financial statement
and the list goes on, fee for organising quotes, tribunal attendance
$25.00 internet advertising.

Tried to negotiate with them but they wont budge best they can do it reduce the relet fee to $110.00.

Problem is I don't think other agencies in the area are much better but I guess its a case of negotiating with them.

My old property manager left recently and has another job (not as a PM). I was thinking of approaching her to see if she would be interested in managing my portfolio. Thing is I don't know how to structure the payment and how much of the management to outsource and what to pay her.

Would appreciate any ideas before I approach her.

 

[sunshine]

Gotta love PM's when they try to charge 2 weeks let fee and then everything else on top. Really, what does the let fee cover???

Karina, you should certainly look elsewhere. Surely in Sydney there is someone somewhere that you would be better with, Yes? Or are they regional and you are a bit limited?

If you want to offer your old PM, perhaps starting with the % that you were happy to pay and see from there?



Sunshine

 

[Collector]

We call them unprofitable client letters. (only ever had to send 1 out)

they are used to lose an unprofitable landlord or to increase the amount of income from the management to make it profitable.

But the main reason is to lose the management of the particular property when the landlord has become to dificult to deal with.

Hoping to get some ideas from the forum.

I am currently in a situation where I had an agreement in place with a real estate agency for a % fee to manage my properties + 1 weeks rent.

They sent me a lovely letter stating that their costs had increased and they were increasing their fees and they could no longer continue with our agreement. (I have several properties with them)

Now they want -
$220.00 relet fee (highway robbery)
2 weeks rent for new lease
$110.00 for initial property condition report
$45.00 quaterly and six weekly inspections
$88.00 final condition report
$44.00 each financial statement
and the list goes on, fee for organising quotes, tribunal attendance
$25.00 internet advertising.

Tried to negotiate with them but they wont budge best they can do it reduce the relet fee to $110.00.

Problem is I don't think other agencies in the area are much better but I guess its a case of negotiating with them.

My old property manager left recently and has another job (not as a PM). I was thinking of approaching her to see if she would be interested in managing my portfolio. Thing is I don't know how to structure the payment and how much of the management to outsource and what to pay her.

Would appreciate any ideas before I approach her.

 

[Buying_Freedom]

Wow, those fees sound a bit steep.

You should really look at interviewing a few other property managers in the area. You might be pleasantly surprised by their fees and service. If you have a few properties, it seems standard that property managers are willing to negotiate on their fees.

I'm not sure about approaching the old PM if they're not doing property management anymore. Sounds like they've had enough of property management and wanted to move on. You want to find someone with a passion for managing your properties.

 

[nww]

Seems strange in the current market they are trying to get rid of you.
I think Collector has a point.
Have you upset them in anyway?

 

[Dazz]

We call them unprofitable client letters. (only ever had to send 1 out)

they are used to lose an unprofitable landlord or to increase the amount of income from the management to make it profitable.

But the main reason is to lose the management of the particular property when the landlord has become to dificult to deal with.

It's good to have the truth every now and again from a PM.

Those fees look very similar to the ones I was charged when employing PM's to mismanage my ressy props. Ended up being 22.3% of the rental take. They thought it wasn't enough and I was unrofitable as well. I disagreed.

Certainly doesn't adhere to "the customer is always right" maxim.

The PM's # 1 concern is the profitability of the Principal running the business. Every Landlord, and every Tenant is readily expendable. Xenia has written that quite a few times before. Get rid of the headaches - palm them off to whoever, and keep the ones that pay through the nose and never complain. Joy.

Karina my dear - sounds like with your lack of selection in PM's, you are SOL.

What's the fundamental problem of course ?? There isn't enough revenue coming in from the renters to make it viable for either the Landlord or the PM......but we shall not speak of such evil things.

 

[silversands]

Hi Karina,

First thing I would do is try and determine why the old pm moved on.
If she's merely sick of prop managing, I would not use her. If she is tired of not being paid what she is worth, bear this in mind when determining your offer. If she is already full time somewhere else, then she will be working nights and weekends to look after your properties. If you value her work then reward her accordingly.

Something like the same % fee you used to pay her company (because she gets to keep it all) might be tempting.- without all those new fees. How many properties though? Three or more may be neccessary to be worth her while. If she is working elsewhere, will she still be flexible enough to represent at tribunal etc?

Interesting proposal. I hope you tell us how you proceed.

All the best with it

Regards Jodie

 

[karina]

Just to clear up a few things.

Everybody I know (and I know of 3 others) that have properties with this agency all received the same letter, so don't think its personal and I don't consider myself a difficult client, most of my PM's get on well with me.

There are several other PM's in town so I will be approaching them each indivdually to see what they can offer, although from what I have heard from others they all charge seperatly for inspection etc, I guess they do becuase they can and if they all do it , it doesn't leave you with many options.

I believe my old PM is working part time in another job at the moment as it gives her the fleixibility to pick up her kids from school etc.

Anyway I'll keep you posted.

 

[Atticus Legal]

Hi Karina,

If you have an agreement with the real estate agent already, they cannot just bump up their fees as they please. Unless the agreement has expired to which they would be free to re-neogitate the terms of the agreement as they please.

If the agreement hasn't expired, may as well just stick to your guns and stay put with the current terms!

Cheers,
Aitran Nguyen

Principal Solicitor
Atticus Legal

 

[karina]

Thanks for all the responses

The managment agreement would have expired by now so I guess they can do whatever they want.

Luckily I just spoke to another agent (1 have 1 property with them and they have agreed to the % management fee inclusive of all inspections etc except they want 2 weeks for a new lease.

I can live with that.

Feeling much better now.