Hi all – my previous investment was in defence housing (DHA), and the house repairs and maintenance are managed completely by DHA. In addition, rent is guaranteed for terms of the lease (10 years), so I don't have to worry about looking for tenants.
What exactly is Property Management services? Reason I ask is that I want to get back in the market for a non-DHA property and was wondering if similar services exist that I can purchase and pay a flat ongoing fee? My preference is for a "hands off" investment where I only need to worry about making the investment, and leave all the ongoing servicing and managment to someone else.
Any of your thoughts or comments would be most helpful.
Kind regards,
AjayGenerally speaking a property manager (usually through a real estate agency) will manage your property – ie find & recommend a tenant, collect the rent, arrange basic maintenance/repairs etc for a fee.
An asset manager looks after portfolio management ie a large group of properties under common ownership undertaking an asset management plan (looking at items like value adding, acquisitions/disposals, facilities management, property management etc) usually on a commercial, industrial or retail portfolio – not on single residential properties.
If funds extend it may be worth considering joining a small property syndicate where it is a managed investment for a set/agreed duration, all maintenance, leasing, facilities/property/asset management is undertaken by the sydnicate manager and the investors get a return (usually) as well as depreciation benefits etc. There may be some good buying when the syndicate market takes off again after the price corrections.
Some property managers are charging a flat fee which includes all letting fees, marketing, inspection fee’s and other admin charges. The ones I’ve heard about are around 16%. DHA charge 16.5% which makes them competitive however Defence housing’s prices to purchase are usually higher than market value which often makes them not as viable as normal investment properties OR I looked at a 5 yr old DHA recently which was competitive to buy however the rent received was $100 less than current market rentals.
A property manager will usually organise tradespeople, collect rent’s, follow up late payments, do inspections and arrange statements at tax time. Current market percentage rates depend on whether you have 1 or more properties and other negotiations you can make. 9% inclusive of GST is the average in Metro WA for 1 property, on top of this you’ll pay for inspections, letting fee’s, advertising etc. hope that helps.Hi Ajay,
I am a property manager in Victoria (not sure which state you are looking, it does vary from state to state), it is quite rare that an agent will have a flat fee that covers everything. In fact, you can actually be worse off if you sign for a flat fee. Common fee structure is:
7.7% management – includes distribution of funds, collecting rents, financial statements, organising maintenance, routine inspections, lease negotiations and basically anything you can think of that needs to be done to look after a property, both landlord and tenant
4.4% leasing fee – is ONLY charged if a new tenant needs to be found, so if you have the same tenant for 3 years you wont need to pay this fee for that three year period. This includes all lease preparations, application processing, open for inspections and so forthThese fees can also be negotiable, but keep in mind that lower fees doesnt mean better service. You will get what you pay for! Sometimes it is worth paying a little more for a boutique/upmarket agency to manage your property.
I hope that helps.
Courtney
Thanks Courtney – when you mention 7.7% property fees, do you mean this percentage in relation to the weekly rent? e.g. if weekly rent is $400, property fee is 7.7% of this, which is roughly $30.80 p/w?
Cheers
AjayThe management fee is the % of the weekly rent taken by the agent (gst, postage, advertising etc is generally on top). You may get a discount for having several properties managed by the same firm.
If a property management company doesn't have a renter for a property who is responsible for the mortgage payment The property management company or the landlord?
Normally the land lord is responsible for payments although depending on circumstances you can take out land lords insurance that may cover when you have no tenant. DHA is very different to the usual style of property management with guaranteed rental but this is also applicable to service apartments.
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