Hi all,
I'm looking to rent out my property. What arguments can I use to negotiate on their fees.
The standard rates they've stated are 8% for ongoing maintenance, 1.5 wks rent to find tenant as well as reimbursing them for advertising etc. Is this the standard for most agents?
Thanks
hi shanshan,
7-8% +GST is common for ongoing fees.
You should be able to negotiate a better price after shopping around a bit. Where is the property located? If the property is located in a city/town where rental market is tight, you should be able to negotiate simply because the property manager do not have to work very hard to find new tenants.Hi PP,
It is a property 5 kms out of the city (Adelaide). So I will negotiate on that basis. Anything else? I guess easy maintenance since the property isn't very old and is in good condition also.
I have looked at rates with other property managers, but it all depends on the rent they can actually get. I would guess sometimes the agencies that charge a higher % would be able to achieve a higher rent. Also, is it better to sign up to an agency that has a big rent roll?
Thanks
alot of agencies are different 8.5% + GST is common also 7% plus postage and petties + GST
look around at every agency and play them off each other you should be able to get a better dealHi Shanshan,
You need to look at a couple of things, 1st the commission is broken down into two separate sections the 1st is the collection of rent the 2nd is the management fee. From there most offer free 1/4 inspection, some charge for this service (even though you are under the law allowed 4 per year and you can attend them if you so wish). Look at your postage and petties if you are happy to receive all information via email ask for that option (most agents have this ability). Look at your extra cost such as repairs and maintenance charges some agents charge a commission for arranging this also for the processing of your insurances, rates and so for.hope this helps
What state are these properties in?
My property manager charges 5% plus GST (5.5%), One week's rental for finding a tenant, and nothing else.
He also calls us first for all maintenance as hubby is a tradie.
I'm in Victoria and the rental market is very strong in this particular area.5% seems low in comparison. The property I'm talking about is in Adelaide, not far from the CBD.
Personally, I think the agents are making a killing. The property is only 10 years old and would require little maintenance. I'm going to try and negotiate down as much as possible.
Thanks for the help all
I'd agree with 5% + gst & postage however this is based on 2 or more properties in the same area. I'm getting commercial rates around the 4% as well.
diclem wrote:What state are these properties in?
My property manager charges 5% plus GST (5.5%), One week's rental for finding a tenant, and nothing else.
He also calls us first for all maintenance as hubby is a tradie.
I'm in Victoria and the rental market is very strong in this particular area.Wow, that's cheap!! I'm in Queensland and can't get below 7% plus GST even though I've got quite a few properties with the same agency. However, I'm very happy with my property manager and am willing to forgo a few dollars for great service.
hi, im in the industry and i also have properties that i give to a property manager as i want to distance myself partially to my properties and i pay 9.9% plus monthly postage fee of 5.50 no inspection fee as they are city properties and i let them organise maintenance but only on my authorization (as i now alot of traides and have my preferred list) I have found that i do pay more yes but i also get the service i pay for. I have found in the past that if i don't pay a good fee and the rent roll is high a property manager is forced to look after too many properties so i lost my identity and became another number.
Shopping around is good but haggling can hurt you in the future. ask around for the most reputable manager and look out for things such as staff turnover as a happy manager is one that pays attention to detail.
Hi shanshan,
There is more to property management than just collecting rent! A Good property manager should be like a partner in your wealth creation strategy and should save you money in the long run.
I run a property management company, we have never advertised ourselves as being cheap but our landlords end up with more money in their bank accounts than landlord's who's properties are managed by cheaper agents. Here are some of the reasons why and questions you might like to ask your property manager:
Strict arrears control! This is very important, property managers should have a zero tolerance for arrears with no excuses taken and a termination form sent to tenants on day 15 (the minimum allowed by the law). If the tenant is a bad one, you need to go down the path of getting rid of them asap and starting over. Everything else costs too much money. A good pm should also have experience in dealing with tribunal cases on your behalf and this is all part of the management!
Regular rent reviews. If the property is under rented, landlords are losing money. These should be done every 6 months and in cases where rent is not put up, it should be backed up by evidence why not (ie market has not moved). In most cases rents could be raised by $5 to $10 per week every 6 months. In SA this can be done even if the tenant is on a fixed term lease!!!
Your pm should be using up to date REI leases, not the OCBA ones that are dowloaded from the tenancies advise website and are available to private landlords! The REI ones are favoured to the landlord and have specific clauses in there to save money (ie all water usuage to be billed to tenants, phone line connection fees should alos me billed to tenants) These are traditional landlord fees in the absence of appropriate clauses!
Make sure they are up to date as legislation changes regularly! The pm should be a member of the REI and actively involved with them. We are in the REI committee and constantly trying to make noise and change legislation for the betterment of our landlords!
Your management agreements should be easy to get out of! They should offer a garantee on their service and let you out of the contract at any time if you are not happy. Most agencies would lock you in and make you pay a penalty to leave if you are not happy with their service. Be very careful, we are working with many clients at the moment trying to get them out of contracts they are not happy with. They will be coming over to us from cheaper agencies for a variety of crazy reasons!
Maintenance and tenant enquiries should be taken care of promptly!
The average salary for a pm in SA is $25,000 and they are expected to manage 100 to 120 properties. In SA, there are no qualifications required to be a property manager. Many agencies pass it onto their receptionsts as they don't view property management as a serious part of their business. This alone will ensure that your property is missmanaged and you will be losing money on it even if the fees are cheap. Make sure you are dealing with a specialist property management company, that the property managers are being paid well and are not managing the whole rent roll alone!
Instead of ripping off employees and making them work hard for little pay. Isn't it better to increase management fees and also have more property managers managing the same amount of properties? This ensures that property managers are happy because they are making a decent living and landlords and tenants are getting a top service. Well that's our phylosophy anyway
Hi All,
Late comment but just to let you all know how tight the market for prop mgr's in the NT is, I am paying 11% and 1 week for letting and up here that is a good deal. Considering the competition in the southern and eastern states, and the number of properties you have handled by the prop mgr, I would say 6-8% and 1-2 weeks is the average range. Anything less than this and I would be suspect of the Prop mgr's integrity for the position, any more than this, shop around.
Cheers,
Heath
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