Three month furnished apartment PM fees

Renting out our apartment in Inner City Sydney for around $1,500pw for three months. Could I get opinions on the agency agreement:
Agent's Remuneration
The Agent will be entitled to the following fees (GST incl)
(a) 220% of one week's rent as a let ting fee
(b) $33 as a Tenancy Agreement preparation fee
(c) for the provision of all ongoing usual property management services
i) a management fee of 6.6%
ii) an admin fee of $99 per financial year
Marketing
$493 incl GST (initial letting only)

I have provided the professional photos. If we rented the apartment for 12 weeks at $1,500 - this amounts to 25% of the rent going to the agent. Sounds very high to me but I have no feel for executive furnished rentals.
 
Firstly, why only 3 months?

Secondly, those numbers sound like standard longterm residential numbers. Does the agency you approached understand your goals and aims here? Do they have a package tailored to that situation? If not, perhaps approach a specialist agency to do this kind of arrangement.
 
Firstly, why only 3 months?

Secondly, those numbers sound like standard longterm residential numbers. Does the agency you approached understand your goals and aims here? Do they have a package tailored to that situation? If not, perhaps approach a specialist agency to do this kind of arrangement.

We are renting it out while we are overseas for three months. I am concerned that this package does not address short term rentals.
 
too high

you can negotiate better rates for $1500 per week rental.
one week rent to source tenant.
4.4% or 5.5% flat fee includes everything.

no other fees

this would be a standard contract for an agency and sufficient for a higher end rent.

anything else is over the top - speak to an agency principal as the property managers are using standard management fees and not discounting for higher rental income.
 
Renting out our apartment in Inner City Sydney for around $1,500pw for three months. Could I get opinions on the agency agreement:
Agent's Remuneration
The Agent will be entitled to the following fees (GST incl)
(a) 220% of one week's rent as a let ting fee
(b) $33 as a Tenancy Agreement preparation fee
(c) for the provision of all ongoing usual property management services
i) a management fee of 6.6%
ii) an admin fee of $99 per financial year
Marketing
$493 incl GST (initial letting only)

I have provided the professional photos. If we rented the apartment for 12 weeks at $1,500 - this amounts to 25% of the rent going to the agent. Sounds very high to me but I have no feel for executive furnished rentals.

Problem 1.
They've just doubled the standard 110% because it's high end. If they did it logically and thought out then it would only be 210% as gst is still 10%.
The dollar value is $3300. Tell them to justify how it costs them $3300 of employee time to lease the property.

Problem 2.
You could negotiate the management fee. If they don't budge say that you have spoken with other companies that are willing to do 5.5%. I would even do it for 3% and still be worth it.

Problem 3.
Unless they are doing Highlight listing on realestate and priority placement on Domain as a minimum with unlimited duration, ask what the hell are they charging that much for.
 
Problem 1.
They've just doubled the standard 110% because it's high end. If they did it logically and thought out then it would only be 210% as gst is still 10%.
The dollar value is $3300. Tell them to justify how it costs them $3300 of employee time to lease the property.

Might want to double check your maths on that percentage mate.

2 weeks letting fee is 1500 x 2 = 3000
3000 + 10% gst = 3300
3300 / 1500 = 220%

No biggy :p
 
Might want to double check your maths on that percentage mate.

2 weeks letting fee is 1500 x 2 = 3000
3000 + 10% gst = 3300
3300 / 1500 = 220%

No biggy :p

Yes you are right. Haha I was calculating 3000 being the 200% and the 20% additional being as 3600... Maths confused with gst being 10% only I see. Now I know why I use calculator.
 
Yes you are right. Haha I was calculating 3000 being the 200% and the 20% additional being as 3600... Maths confused with gst being 10% only I see. Now I know why I use calculator.

Is it common to use percentages there? We always say 2.2 weeks here, perhaps we're simpler :p
 
I figured the 220% = 2 weeks plus GST, admittedly a convoluted way of saying it.
Sent the PM an email: We are concerned that this is set up for a standard long term rental agency agreement rather than a short term executive rental agreement. Would you be able to reassess your proposition prior to our meeting tomorrow?
Also cc'd the partner who I have known for several years.
If necessary, I will use your points in our meeting.

Thanks again & I will report back afterwards. We still have three months before we leave so not under any pressure.
 
too high

you can negotiate better rates for $1500 per week rental.
one week rent to source tenant.
4.4% or 5.5% flat fee includes everything.

no other fees

this would be a standard contract for an agency and sufficient for a higher end rent.

anything else is over the top - speak to an agency principal as the property managers are using standard management fees and not discounting for higher rental income.

You are aware that each state and areas have different fees for whatever reason right?????
 
I typically see short term rentals being charged far higher management fees to cover the different work involved, and only a small letting fee.

I just had a look at NSW laws, as in Vic 3 months can be a residential lease. In NSW it looks like anything over 3 months (unless it's always used as a holiday home) is a residential agreement, but anything less is holiday.

I think the letting fee is astronomical, whether it be a holiday or residential lease. Sure, I'd love to get paid $3k for renting a property out, but as an owner I would expect 1 week.

Does this agency normally do holiday rentals? If not, I wouldn't bother signing and find an agency who does it day in and out.

I'm a great property manager, but I wouldn't have the first clue on holiday rentals, so I don't do it. Simple.
 
Thanks for all your input, you cerainly provided me with confidence in negotiating with the agent. I have negotiated a new agreement with only one week's letting fee. Did not argue over the marketing costs as this is the agent I want to deal with and they are doing a photo shoot. For me it is a win.
 
It is a bit on the rich side. For a 2 week fee at the barest minimum advertising & all other charges should disappear but I would expect, like the others they're on a fishing trip.
 
Back
Top