What am I worth as a Property Manager??

[Rockstar]

Hi All,

I have been asked to come up with a proposal and costing to project manage a dual occupancy development in my local area. The site has an existing house and plenty of room to build another. After completing two duplexes, and working on a third, I have attained all of the skills and knowledge required to manage a project like this. The question is - how much/how do I charge for my services? I can do an accurate feasibility (see below) but am not sure how to charge for my time as it is difficult to forsee how many hours it will take. It would probably be around 250 - 350 hrs I would expect. The owner intends to hold both houses on completion.

Do I charge on an hourly rate?
Do I charge a lump sum?
Do I charge a % of the cost?

Has anyone Project Managed or paid a project manager before? If so what rates did you/they charge?


COSTS

Base House $143k 3 bed 2 bath double lock up gar (180 sq m)
Site Costs $16k
Packages $4k Upgrades to quality appliances
Floor Cov. $4k
Curtains $1k
Driveway $10k
Landscape $15k
Miscell. $1k Letterbox, Antenna, Clothesline, Water meter, etc.
Sec. 94 $32k
Fencing $5k
Stormwater $4k Retention System design and construction

Interest $5k Capitalised into total cost
Loan costs $3k

Project
Management $25k ???


Total Cost $268k



$268k @ 5.50% = 15k per annum IO repayments
Rates/Insurance = 3k

Holding Costs $18k per annum

Rent return @ $400/wk = 20k per annum

End Value (current market) $440k

Equity Gain $172k



Project Management Responsibilities – part time - over 9 months

House Selection Assistance
Liaising with council planners to ensure smooth approval process
House siting on block in relation to

• DCP setbacks and other requirements
• Privacy and Solar Design aspects
• Cut and fill design
• Landscaping requirements eg retaining, paving, etc.
• Driveway access and manoeuvring
• Services

Liaising with Project builder to prepare tender through to contract.
Drafting the “Statement of Environmental Effects”
Organising On Site Stormwater Retention System with Engineer
Drafting Landscape Plans and Site Plans with regard to Private Open Space, Fences, Bin Storage, Retaining walls, etc
Supervise construction and maintain quality control. Ensure plans are executed properly.
Organise/Supervise driveway construction
Organise/Supervise floor coverings
Organise/Supervise fencing
Organise/Supervise Strata Survey (if necessary)

Advice would be much appreciated as usual, RS

 

[Player]

Not advice Rocky, only MHO. At the end of the day it is whatever you both agree with. Probably most common is a % age arrangement and usually around 10 % or so from what I've gathered to those I've spoken to and my reading.

A percentage is also a bit more protective to you for any excess time you need to input for variations or other sundry problems (costs) that may be encountered with geotech, water, council, etc. Sometimes the straightforward isn't always so.

For me I'd go % age and by the look of your numbers provided above you've allowed around 10 % anyhow.

I would anticipate you are paid as a drawdown at the various stage completion phases as would be the builder.

Would also be keen to hear other's views and opinions.

 

[sparky23]

I would probably check out the legal aspects aswell such as if costs blow out or tradies make mistakes or there is an accident on site - could you be held liable? Its a big responsibilty to do something like this for someone else, a lot different to doing it for yourself. Having said that no doubts you can handle it but just make sure your ***e is covered!

Good Luck!

 

[battler]

Having Done 3 dual occs and a triple myself, that is, everything from the initial purchase, to receiving the rent, excluding concreting, plumbing, electrical, carpet and air conditioning, I often wonder why I never added up the actual hours spent.

As Sparky has said it's a lot different doing it for someone else. You've asked a hard question on how to price it, and a percentage may be in order, but the trouble with this is that you can spend a lot of additional time sorting hiccups, that don't increase the end cost and therefore dont increase your percentage.

I've found most people want a fixed price so they know where they stand, but I think you need to work with a percentage as the base cost, but with an hourly rate to cover you for extra time that you have to put in for issues over and above, and out of your control.

 

[Rockstar]

Thanks for all of your input. Very good points.

I would probably check out the legal aspects aswell such as if costs blow out or tradies make mistakes or there is an accident on site - could you be held liable? Its a big responsibilty to do something like this for someone else, a lot different to doing it for yourself. Having said that no doubts you can handle it but just make sure your ***e is covered!

Good Luck!

Agreed Sparky, I did think about this aspect which was why I was leaning toward the hourly rate method. I get paid as I go for consulting each week or fortnight. Not sure if I need any letters behind my name for this? All contracts would, of course, be strictly between the owner and the project builder, bank, etc. I would be like an advisor, trainer or facilitator. I could, no doubt, handle the landscape plans in my name but the Statement of EE would be submitted in the owners name. Do you handle many dual Occs? DO you know anyone who is an independant Project Manager?

I often wonder why I never added up the actual hours spent.

Yes me too Battler. It would have been helpful to do this. I guess I will have a lot clearer picture after this project if it should go ahead.

 

[Sheryn]

Statement of EE

Rockstar - I had to madly scramble and write a Statement of EE today.

As a Project Manager you will need Professional Indeminity Insurance. I would suggest go for a set amount plus a % for managing variances.


Regards
Sheryn

 

[sparky23]

Thanks for all of your input. Very good points.

Do you handle many dual Occs? DO you know anyone who is an independant Project Manager?

No sorry I don't know anyone, maybe someone at Council could put you on to one in your area that can help with some good advice on how you should cover yourself.

 

[Minx]

I think doing something like this for your self is classed as owner builder.

I know that Project Managers have a license class with the building commission. To be a registered you need insurance.

Also what are the tax implications? Will you be collecting GST and submitting BAS for this?

I also think that if you are an unqualified or registered Project Manager it would be hard to justify charging what the qualified and registered project managers do.

I would advise to check out the building commission in your state for further details and direction.