Can someone with an IP in QLD let us know what are fair current Property Management/Letting Fees?
Being new to investing in this region we do not want to get ripped off. Happy to pay fair value for a good service of course but they are so much higher than down here in VIC.
Thank you!
Hi Renoah
The standard rate is 7.5% + GST, plus post and petty’s, inspections and one weeks rent for every contract signed.
There is better rates available if you shop around.
I know of a few good companies, where is you IP?
BluegrassWhy is it that QLD property management is so high???
I told a mate down here how much I was paying and he nearly died. Give or take it is up around 10% with everything included.
Is the % charged higher or the amount charged?
Here is what I was quoted which is essentially 8.5% + GST + a bunch of other fees:
Rent collection commission: 5% + GST
Management fee: 3.5% + GST
Letting commission: 1 weeks rent + GST
Lease negotiation/Renewal Fee: Half 1 weeks rent + GST
End of financial year statement fee: $25 + GST
Postage and Petties: $10 per month + GST
Advertising/Marketing fee: At cost (?)Any one have any tips on best areas to negotiate down on? Commissions or management fees? Or pay those but reduce other costs?
Thanks for your advice!
Hi Renoah
Lets look at what you have been offered if it is a permanent rental!Here is what I was quoted which is essentially 8.5% + GST + a bunch of other fees: – For standard it should be 7.5 + GST
Rent collection commission: 5% + GST – Should not be happening
Management fee: 3.5% + GST – Shoiuld not be happening
Letting commission: 1 weeks rent + GST – Standard, but be aware of them renewing a lease every six months
Lease negotiation/Renewal Fee: Half 1 weeks rent + GST – Should not be happening
End of financial year statement fee: $25 + GST – Should not be happening
Postage and Petties: $10 per month + GST – Can vary but appears normal.
Advertising/Marketing fee: At cost (?) – Needs to happen if the property becomes vacant, but a goo agent would not let this happen.
N.B. Many of these fees are tax deductable. Buy this months API mag, great extra article on tax deductions.Any one have any tips on best areas to negotiate down on? Commissions or management fees? Or pay those but reduce other costs?
Thanks for your advice!Email me with your property address and I can put you in touch with a couple of companies.
As per my previous post, the worst it should be is under 10%, but some of the companies my clients go to are 7.5% flat rate!
Regards
BluegrassLet's look at it this way:
Rent: say $400 pw = $20,000 pa (2 weeks vacant)
Letting fee: $440 (1 week rent)
Monthly statements: $11
Annual Statement: $27.50Management fees/comms @ 8.5% = $1,870
Letting fee: $440
Statements: $159.50That's almost 13% assuming you don't pay a reletting/negotiation every 6 months! I would be telling the agency to show why they would charge for providing you with any statement (especially if it were emailed – they don't do these as one-offs they are bulk transfers & all computer generated).
I would also be hitting them on the comms %.
It seems to be quite a lot of reward for very little effort by the agent.
Given you're in Queensland, this is probably of limited use, but we have two properties (in Canberra), both of which are with different agents. Both agencies are charging 7.7% management fees (including GST).
In the past, we've had both agencies try (on occasion) to tell us that the price is too cheap and they need to increase their fees (about 5 years ago one of them said that because of increased costs to them it needed to go to 9.9%).
Whenever they've tried this, I've simply agreed with them and said that we'd move their property to our other agent if they couldn't meet our needs.
The first time they came back with the argument "no agency will be able to do it that cheaply". I simply told them the name of the other property manager and asked the agent to phone her and confirm that we were clients. Amazing how quickly they were able to find a way to do it for 7.7%.
In the last 5 years, they haven't even bothered to negotiate. Both have also said that if we'll get the same fee for any new property we bring to them in the future too.
So – the point is: if you do have more than one property, it might be worth going to two different agencies to keep them both vying to keep your business over the longer term.
Wow! There are some fees there!
I believe that ongoing Property Management Fees should be flat and not a percentage(%) at all. It does not take more time for a property manager to manage a property when rents increase so they percentage(%) fees do not make sense.
Although we do not yet manage in QLD we charge $99/month flat fee as a comparison. One weeks rent for securing a new tenant and 50% of a weeks rent for renewing a lease.
Hope this helps,
Roger Perrett
Manage My Apartrment – Property ManagementHi there!
Agencies in Queensland offer varying rates for property management, and it can be as high as 10%+ once you add in all the charges and petties. If you think that's an outrageous amount, then you're not alone. I work for a Queensland agency which was formed with the express purpose of providing excellent service for a fair price.
We only charge 5% + GST and standard letting fees (the first week's rent or half for a re-let) for full service property management. That's it! I would hope that other agencies would take note and start offering more reasonably priced services.
Jenny
Renoah04 wrote:Can someone with an IP in QLD let us know what are fair current Property Management/Letting Fees? Being new to investing in this region we do not want to get ripped off. Happy to pay fair value for a good service of course but they are so much higher than down here in VIC. Thank you!Hi Renoah04,
The prices vary greatly depending where your property is at. For example the lowers we have experienced is 6% + GST including all the fees in larger towns and up too 10% plus GST in some of the mining towns out west. You can always negotiate the rate down as they need your business just as much as you need them.
Hope this helps
Having had a foot on both sides of the fence so to speak I find some practices do not value good tenants and you loose them because of agents pumping up their charges to the owner. As a landlord I have found that if you live in the area and are capable it is worth your while in recruiting and managing your own tenants. You can put the savings into regular maintenance checks by a contractor. Lets face it the rental manager just rings a contractor to do any work at your cost plus fee and usually there is some sort of kickback.
A family member has been renting a house in a "better" suburb of Brisbane. I can assure you they are a model tenant of 5 years and they have now given up and are buying because the agent is hopeless and they have had a gut full, new 6 month leases, lack of response to requests for longer lease, poor response to roof leaks or maintenance, the list go's on A good tenant is worth more to you than you may think. The longest I have managed a single tenant in one of my properties is 7 years. A rental manager uses a "us and them" combative mentality in their dealings, where as you can foster a partnership with your tenants around the rental. Respect is reciprocal so if you want them to respect the property give some respect to them, it goes a long way!
I found an agency that has reduced the rate they charge – because I have an ongoing relationship with the owner of the agency. I originally had my property managed by the partner of the owner, but was handed over to someone who I don't particularly want to deal with because the attitude I get when I ask something or ask for something to be done a certain way is challenged (emailing details and asking that they email me back that it has been arranged – to them saying they didn't bother to read the whole email to let me know it was sorted). I did previously manage this property when I had ferals in it – but changed over to an agency that promised the world but delivered little resulting in taking the tenants back to court.
So carried forward I now have a great agency, superb tenants. Ozman – The fact that the property is 200 metres from my home, would it be an idea to take it back and rent it out myself? If I am saving the agency fees I wouldn't see the need to increase their rent for a while, and all the hard work has been done on the house so I don't have any major ongoing issues with repairs.
Bec
Hi Bec
Which state are you in?
If you are capable of learning the requirements of tenancy rules, you are in a prime position (200 m away) to manage it yourself. Get your local contractors lined up ( the same ones you would use for your home) and Develop a cordial but management relationship with your tenants and promote them letting you know of things starting to go wrong rather than when there is an emergency that requires a after hours call out of a contractor. Still do all your inspections and let them know if you think attention is required to their actions around the rental. Remember they have a right (as we all do) to fair treatment and ability to live without undue intrusion or interruption. Its all about Mutual Respect with good tenants.
If you have difficulty with the agents staff and attitude imagine how tenants must suffer with that attitude. Tell your friend of this attitude as it will affect their business in the end.
ps RE rent you still increase rent in line with area but you may give them a discount for being good tenants but make it clear to them that is what you are doing. A six pack or bottle of wine and a card at Christmas goes a long way as well. Fair but Firm with Respect.
I once read somewhere "Friends may come and go but an enemy made is usually an enemy for life" may we all only have friends!
You must be logged in to reply to this topic. If you don't have an account, you can register here.
