I currently own an investment property and have managed it myself for the past three years – renting to people who I know well.
I am in the process of purchasing second property and have received some quotes for the management. Following is what I was told:
1. Management fee of 8.8% of rent
2. Letting fee of 2 weeks rent (6 Months), 3 weeks rent (12 months)
3. Incoming inspection fee – $165
4. Outgoing Inspection fee – $135
5. $60.50 per routine inpsection.
6. $15 per week for mowing if I were to use it – it was highly recommended.My questions are:
1. Are these the norm?
2. If I have to pay additional for the inspections, what the hell do I get for my 8.8% ongoing? I thought that one fee would cover the inspections as they are part of the management process? Am i dreaming?
3. Is it a good idea to have mowing included?Cheers
To add to the above do you recommend using a Property Manager or is it a viable option to manage yourself?
Hmmm. Interesting.
I'm in Melbourne and up until the start of this month (when I sold the property):
1) I was paying 6% (+gst)
2) 2 weeks rent for letting fee – period
3) $0
4) $0
5) $0
6) tenants responsibility. I believe some landlords will add this to the rent as part of the lease.So …
1) it was not the norm for me.
2) I had to ride the PM a little to get the inspections at times but they were done. All part of the service as far as I was concerned. Being a PM should not just be banking your commission each month, you should expect them to do something. I'm surprised they aren't trying to charge you for arranging maintenance (from what they were telling you)!
3) I didnt do it but I have heard of some that do. I suppose it's personal preference.Regards,
Andrew
itsandrew
Go as far as you can see and you will see further.
i just received an additional quote:
1. Management fee of 9.3% of rent (wow)
2. Letting fee of 1 weeks rent (6 Months), 2 weeks rent (12 months)
3. Incoming inspection fee – $150
4. Outgoing Inspection fee – $88
5. $55 per routine inspsection
6. Advertising $100
7. Administration $11
8. $4.50 per tenant checkand the list goes on!
Fwiw, agents in WA are a bit OTT on price. The eastern states are much cheaper.
Lobster,
the fees you have mentioned are the precise reason I decided to get into Property Management. I was in the same position as you, managed my own property at first but when I purchased multiple properties decided on a Property Manager. I could not believe the fees they were trying to charge for all the little things. The thing that really gets me is this, the RE charges on average about 9%, but then on top of that as you mention there are all the other charges: admin, entry inspection, exit inspection, routine quarterly inspection, letting fee………..
If the RE is charging for all of this on top, what the hell is my 9% paying for?OK I’ll stop ranting now.
Here is what my agency charges as a comparison.
Advertising – Depends on how much Landlord wants done but it is a cost passed directly to you, we make no money from advertising
Letting Fee – 1 weeks rent
Management Fee – 8% inc GST
It all comes down to finding the best PM solution for you, so keep shopping around, there has to be a RE agent over there who is focussed on providing you a service not just taking your money.Most of the RE agencies in Qld are fairly similar although I have noticed that admin charges of around $5.00 per month are standard.
Those rates are quite high I believe, I charge the same as Shane above and would seriously question anything higher.
Hope that helps,
AndyThanks for the info. I just put that to an RE here and all I got was yeh, it is heaps more expensive over here! Honest at least. Makes you wonder why there is such a difference and also weather this effects peoples plans to invest in WA? Also funny how when you question it they throw back the god ole 'well you can claim it on tax line' as if that is all that matters.
On the bright side though I was informed that for two weeks rent they can find a tenant, have them checked for my approval, draft up the lease and then handover for me to manage with no ongoings. Given I am in close proximity to the property and do not see the management side as a chore it sounds like a good option – and saving about 60 / week give or take. I am currently self managing a rental property but it is occupied by friend.
Is anyone self managing their investment properties with tenants who you did not previously know and how is it going? Is it worth your while?
We offer a service similar to that as well , for $500 we advertise, screen and shortlist tenants for client approval, sign up the selected tenant for the lease and then when all finalised hand it back to the landlord to maintain. Its good to see someone else out there is doing it also.
I am still managing my own properties, all with tenants I did not know before. One of my tenants could not get a lease with any RE in the area. He had been living in a friend’s granny flat for 11 years prior to moving into my unit. Have not had any problems, rent goes in every week without fail and he keeps it in pristine condition.
You can always negotiate the rates!!!
Most i see and have used are between 6% – 9% + GST, fees vary from state to state. Self managing is great for some but if you have a large portfolio I feel your time is better spent on growing your portfolio rather than chasing down rents etcFood for thought!
Hi Lobster
We self manage one of our IP's as it is within close proximity of where we live. We have managed this property for 7 years now had a couple of issues ealier on but have had the current tenant for 5 years and she would go close in my books to the perfect tenant. In the end if the IP is within close proximity I think it is worth self managing.As for our other IP we bought in Tassie and required a PM and have been very unhappy with the service. Fees differ from state to state I've heard it is around 5-6% in Vic we are currently paying 8% in Tassie but I need to constantly contact them if I ever need any information, they never contact me if the tenant pays rent late I always have to call them to ask why the payment hasn't come through to our account. I realise it's probably just a bad PM and if I searched around could find a better one just makes it a bit hard I'm in a different state and feel ripped off paying them the 8% commission for what seems like very little work on their part.
So a good PM is hard to find as is a good tenant so if you don't mind the grunt work in advertising/finding a tenant which hopefully won't happen too often and is the hardest part of self managing then I reccomend you do it yourself
Yes, I found good PMs very hard to find, in fact are practically non-existent.
I studied for my own PM license, now I tell my PM how to look after my property
(She doesn’t know I’m licensed)
I also run a Licensed Home Cleaning Company in the city in which I live, and make a lot of money from private landlords who don’t inspect their properties. 3-monthly inspections are absolutely vital!
Another aspect to managing your own property, is that all the dud tenants who will never be able to rent through Agents because they’re blacklisted on the Real Estate data base, all head for private rentals – they have no choice.
And lastly, it’s difficult to procure Landlord’s Insurance if you’re a private landlord. Because of the high rate of claims from private landlords, most insurance companies will only let you have Landlord’s Insurance if you use a Real Estate Agency now.Hello CYC very good response,
Where do you advertise your Lic cleaning service, do you also offer a property inspection for landlords?
Great work well done.
Regards
Philip Sigglekow
Hi Philip,
My home-cleaning company operates from Australind in W.A. (2 1/2 hours south of Perth), covering properties from Brunswick through the main city centre, Bunbury, and down as far as Capel.
Hmmm, I like your idea of doing property inspections for landlords! I’ll be retired in a year or two & I’ve been wondering what I’d do part-time (that I’d enjoy) to save spending my super! I think if I did the 3-month inspections, I’d like to think that I’d also been the one to have written the original Property Condition Report. That way I’d have an accurate record of the original standard each property would need to be maintained to.
Plenty of tenants book my service when they’re vacating their rentals – if it feels appropriate, I mention that it’s a good idea if they hunt down their PCR, to remind them of every little detail that needs attending to, to ensure they will have their bond returned. Some of them don’t know what a Property Condition Report is, others don’t remember receiving one back from their PM, others got sick of reminding their PM to return it so let it go, and most just don’t know where there’s is. They really don’t value it for what it is!
Cheers,
Liz
(She doesn’t know I’m licensed)
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