Hi Folks,
From Ricky Ponting territory…….I can add that management fees for our commercial properties (Retail in regional city…what else) are 5% + GST. I have no idea what letting (retenanting) fees are as I drive from the front seat in this regard to ensure everyone’s best interests are served properly. All other activities are covered by this rate. WA PMs must be greedy sods, but I guess market forces are in equilibrium. I must confess that the posts throughout this forum are a bit discouraging with respect to residential as a means to an end…..what are other folk up to in the commercial field?
wilrose[thumbsup2]
Hi all! As far as I know there was only 1 suitable tenant who applied and she is the one living in it. I was hoping we could get $220/week, but she was the only one who was interested…for $200/week [blink]
Admittedly, it was only advertised for a week, but I figured it was better to get someone in there to help with the mortgage asap for the sake of an extra $20. The tenant is on benefits with 3 kids, so it works out well that we get paid fortnightly via direct debit from Centerlink.With regards to us being able to carry out property inspections ourselves, I haven’t asked. The property is quite far from where we live which is another reason why I’ve got the PM looking after it, as the PM is only 200m up the road. I know that they accept photos if they are recent. It certainly seems that WA property managers are making a killing compared to other states. It gives me comfort to know that I at least shopped around and compiled a spreadsheet before making a decision.
Quick question: Should rent be increased in line with inflation? Our tenant stated that she could not afford any more than $200/week and I am sure she will be there long-term because the primary school is around the corner and the kids are young. I would like to keep her there if possible because she looks after the place. I’m thinking that Centerlink payments should rise with inflation? I don’t really fancy hiking the rent every 6 months because I am a tenant and would hate that. Is it reasonable to increase the rent after 12 months in line with inflation? I realise this is not related to the topic, thanks for any input.
Hi all! As far as I know there was only 1 suitable tenant who applied and she is the one living in it. I was hoping we could get $220/week, but she was the only one who was interested…for $200/week [blink]
Admittedly, it was only advertised for a week, but I figured it was better to get someone in there to help with the mortgage asap for the sake of an extra $20. The tenant is on benefits with 3 kids, so it works out well that we get paid fortnightly via direct debit from Centerlink.With regards to us being able to carry out property inspections ourselves, I haven’t asked. The property is quite far from where we live which is another reason why I’ve got the PM looking after it, as the PM is only 200m up the road. I know that they accept photos if they are recent. It certainly seems that WA property managers are making a killing compared to other states. It gives me comfort to know that I at least shopped around and compiled a spreadsheet before making a decision.
Quick question: Should rent be increased in line with inflation? Our tenant stated that she could not afford any more than $200/week and I am sure she will be there long-term because the primary school is around the corner and the kids are young. I would like to keep her there if possible because she looks after the place. I’m thinking that Centerlink payments should rise with inflation? I don’t really fancy hiking the rent every 6 months because I am a tenant and would hate that. Is it reasonable to increase the rent after 12 months in line with inflation? I realise this is not related to the topic, thanks for any input.
On the eastern side of Oz the property mgmt % ranges from as little as 6% up to 9.9% (incl GST). Personally I would never manage the property myself as I prefer to distance myself from the tenant as well. I do however still ask to be part of the selection process when finding a tenant (you do not need to meet them but should look over their application prior to the agency selecting them to make sure you are happy with it). A good agency should do the mgmt for a set percentage and this cost includes all routine inspections, ingoing and outgoing inspections, advertising etc (otherwise what is the mgmt fee for). The only other costs you should have is one off cost if a new tenant is required whereby the agency receives first weeks rent as a letting fee – at least this is how it works in my area.
If you are trying to save costs why don’t you ask the agency to waive the monthly postage fee (sometimes over $10/mth) and have all statements emailed to you instead – they should charge you postage costs if no postage is needed.
Lastly, I highly recommend landlords insurance – I am a property manager myself and can tell you some aweful stories of loss by owners caused by tenants. They were fantastic when they moved in but their circumstances changed. For the cost of one weeks rent you can insure against a tenant defaulting on rent or causing damage and not paying for it. The laws (well in NSW anyway) are very one sided towards the tenant and it can take months to have a bad tenant removed from a property even after they have stopped paying you rent.
[thumbsupanim]Hi Dee,
I think you made a wise decision. A friend of mine also said she likes to stay slighly on a low side of the achievable rent, as she believes it is off-set by lower tenant turnover.
I do not know about centrelink payments, but advise you to give them a ring. Pleas let us know once you find the answer.
I think that 12-18 month is a good length for rent increases. Assuming 3% inflation, $10 would equate to about 5% or about 18 month.
But I would also stay in contact with you PM. They should really prompt you when it comes time to increase the rent, as they are sitting at the pulse.
Bridgebuff – I phoned Centerlink, got shuffled around and couldn’t find a definitive answer. I was advised that payments have recently been increased until further review in March ’07, but the woman could only guess that it was due to inflation. When I asked who could confirm this @ Centerlink, she said no one would know why they increase, they just do [eh]. I will certainly keep in contact with the PM though and ask their opinion in time.
vjones – thanks for the advice, Landlord insurance was one of the first things I organised! I wouldn’t drive my car without it and I apply that thinking to our property too – you just never know. Also, great tip with the postage and petties, I’ll look into that. Otherwise, Christ knows what the 8.5% is for because inspections etc are extra, but they are all the same in the area unless you are willing to pay upwards of 14% all inclusive!
Dear Dee Dee,
First of all, congratulations on your first investment property.
My wife and I have 3 properties in Perth and one in Broome.
We also live overseas.
I too am a soft touch for tenant sob stories, so with living overseas and my softness, we have no choice but to use Property Managers.My experience of Property Managers (P.M.s) is that almost all of them are extremely bad.
They don’t give a toss about you or your investment.
They are more than happy to spend your money and then charge you for doing so.
We have experienced the following ……
* a quarterly property inspection that consisted of the PM driving past the house on the way home from work on Friday evening.
She didn’t know it but we were on holiday in Perth and had gone to visit the tenants. They told us the insection was due that afternoon and we saw the PM drive past. When we saw the PM on Monday she was adamant she did a complete Property Inspection and she showed us her report ( bedrooms tidy, backyard needs sweeping etc.). When we called in her boss and exposed her as a liar and a cheat, we initially got “well she does have 120 properties to manage, so she can’t be expected to be perfect” and when I blew up on that we were told “if you’re not happy with our service ‘bugger off’ and by the way, you’ll be breaking the PM contract so you will have to pay a cancellation fee”.* Urgent phone calls that the water main on the house has burst and immediate action is required. This always hapens after 5 pm on Fridays and before 9 am Mondays. We’re overseas so all we can do is say “go for it”. Then on later investigation it turns out to be a leaky garden tap washer that needs changing. Cost of that tap washer was $150.
Again when exposed, the PM said “I’ve got over 120 properties to manage etc.”* dogs in properties that you have specified ‘No Pets’ (PM said “I never noticed” – aggressive German Shepherds are so easy to miss)
* Full scale clothing factory being run from one of our houses. (PM said ” I didn’t want to ask in case I offended the tenant).
We have so many horror stories of Property Managers.
Our lessons are as follows.
Arrange a meeting with your PM and their boss.
Prepare for this meeting by:Buy a sleeping bag.
Soak that sleeping bag in cold water.
now spend the night in it.If you are a lady who suffers PMS, make the meeting during that time.
If you are a guy who is into golf, let your wife drive the car over your favorite club.
The idea is to go into the meeting really pi**ed off and with zero tollerance of Bulls**t.
Now tell them – DO NOT DISCUSS IT – tell them.
As far as you are concerned, they have only ONE property to manage – YOURS. Do what you like with the other 120 properties on their books but look after yours properly.
The whole idea of the investment property is to make money for you. It is not there to give them a job. If it doesn’t make money then you will get rid of it and invest in something that does make money and doesn’t use PMs.
Tell the PM that if they are not prepared to monitor the house and ensure that it is kept up to the standard you require, you will go elsewhere. – There are loads of middle aged housewives who have got the kids sorted out in school and want to earn a few bob as a PM.
Finally – 2 very big points – they are HUGE
When you eventually find a decent PM – stick with them. If they change companies – you change with them. Tell the PMs boss exactly that. He has to treat his PM right to keep your business. This means not loading the PM up with too many properties to manage properly.Secondly – the WA government has a department called Consumer Affairs. This department produces a couple of quite large booklets, one is on your rights and responsibilities as a landlord, and the other is one for the Tenants – their rights and responsibilities. Get a copy of these books and read them.
You will be surprised at just how little PMs do actually know.Final comment – we now have a PM who is fantastic. I lovingly nickname her “The Rottweiller”. No tenant messes with any property she manages. Even so, if we were able to live in Perth and manage our own properties, we would dump the Rottweiller in a heartbeat – they are just so expensive.
Good luck, and once again, congratulations.
Cheers
LOL Wings! Thanks for your congratulations, same to you
When I was ‘interviewing’ PMs, one of my questions was “how many properties are you currently managing?” because I didn’t want to be some forgotten number. We’re doing ok in that respect as they are a small RE office (not part of a franchise). It must be quite frustrating for you to be overseas trying to manage PMs from afar. It is helpful (and amusing) for us beginners to hear anacdotes, good and bad as it opens our eyes a bit to the possibilities. Thanks for everyone’s suggestions and experiences so far.
Will get on to that consumer booklet…
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