What should PM fees reasonably cover?

Hi,
My first IP is a unit in Randwick area in Sydney. I am using a real estate agent as PM who charges 6.6% management fee monthly (discounted from 7.7%). They also charge $9 per month admin fee, extra standard charges related to letting fee/re-letting fee, advertising fee, tenancy database check fee, etc.

I recently had change of tenant, and so PM arranged the smoke alarm to be checked & the electrician ended up changing it and fixing a few things like light switch, change globe. And a handyman to fix a screen door. Both of these of course I paid for.

The monthly statement from PM agency has additional charges for "supervision fee" - which I challenged and it is in the management agreement where any maintenance/repairs organised by PM has 5.5% of its cost as additional fee payable by me. I mean this extra charge does not amount to that much this time around, but my query is regarding the legitimacy of the principle involved here and going forward if I have a more expensive repair bill.

My question is, whether this type of "supervision" is exactly what a PM is being paid for every month from the PM fee. Is it standard for this to be an "extra" fee? I mean for most months of the year, the PM collects 6.6% of my rental income to not do much except pay the odd bills and EFT of rental income from the tenant. I can understand paying extra for letting fees, as there is extra work involved with this, but I would consider organising tradies to come in and do maintenance (not a renovation), as being part and parcel of normal PM duties.

If this is not standard practice, could members suggest what reasonable PM % fee is for eastern suburbs and whether any recommendations for good PM in this area? Thanks for your advice and thoughts.
 
....PM agency has additional charges for "supervision fee" - which I challenged and it is in the management agreement where any maintenance/repairs organised by PM has 5.5% of its cost as additional fee payable by me.

You signed an agreement without understanding the terms? Why didn't you raise the issue, which you state is "in the management agreement", before now?

In any event, if you're unhappy you can seek to negotiate the fee away or terminate the agreement and move to another agency.

Most PM's will organise small repair quotes as part of their normal work for you. However, for major works (or renos) many PMs charge the fee you are talking about, as they are acting as a Project Manager, organising tradies in the right sequence, approving their invoices for payment once they've checked the work is done etc.
 
I believe repairs and maintenance should be covered by the monthly %.

As Prop mentioned a major renovation being projected managed is a different story and involves a lot more work and of course at a time when no monthly income is being earned on the property.

We prefer that to be a set fee rather than a % so it is clear the landlord and PM are on same page wanting the best job for the lowest price.
 
My question is, whether this type of "supervision" is exactly what a PM is being paid for every month from the PM fee. Is it standard for this to be an "extra" fee?

Scary. I'd tell them you're changing PMs unless they do another contract for you. See if other Eastern suburbs types charge like this too. If so, get a westie. Much better.
 
Yes, I agree that I should have looked at the management agreement in more detail, but I interpreted this as the fee in the event the PM organises a more major work like renovation, not day to day minor repairs that is expected from usual property management.

Still I don't have an excuse, but the PM is the agent that was the selling agent at the time, and the vendor wanted to stay on for 6 months after settlement, and it was winter and a bad time to try to find a new tenant. So regardless of the terms, I felt it was in my interest to arrange a smooth transition until I could get a new tenant in the more peak Jan/feb time. Now that I have a tenant with a 12 month lease signed, I would be inclined at changing property manager, since the comments from SS members suggest that it is not the norm to charge additional supervision fees for minor repairs.
 
In NSW I hear more and more stories of what PM are now trying to charge landlords. I still believe in a fair management fee which both parties are happy with, $5.50 per month admin fee. I charge 1 weeks rent +GST to find new tenants and $16.50 to draw up the new lease/management agreement. There are a lot of agents with hidden new fees and the list is growing:

1/ $33 to draw up paper work for new tenant.
2/ $33 to do a TRA or Tica Check. (Tica & TRA $250 per year fee, agents normal have one or the other)
3/ 5-10% (of total invoice) to organise maintenance repairs (what are they doing for their management fee?)
4/ $15 for an end of year financial statement (all I do is tick a box in console and it automatically prints).
5/ Approx $70 to advertise.

Why because you let them!! because you think 5.5% is a good rate and that's all you hear and don't read!!
 
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