Hi
Is it ok to negotiate a commission discount 18months after enlisting my current property manager ?
I am paying 10% inc of GST. I have 3 other investment properties that I am currently paying 7.5% for.
These properies are much older and required much more effort to manage.
The agent that I am paying the 10% to is managing 2 3bedroom, 2 bathroom 18month old duplex's. She has been managing since they were new.
She has been a great manager, but really hasnt had to do much. Each of the duplex's have had the same tenants since day one and I have never had a maintenace request.
Other Property Managers in the same town are offering 7.5%.
Its a tricky one as I feel I have established a good relationship with the current manager.
Is this ethical ?
Thanks for any advice
Fingerscrossed
It can't hurt to ask.
Are the other properties within the same location? If so, are you happy with the other PM? If not, could be a good opportunity to bundle them all together and offer them to this PM at a negotiated discount.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Would you pay more for a good property manager than for a bad one? How would you know until you have an issue?
In my opinion 10% is quite dear. I try negotiate all of mine to around 6.5%. I think 7% is the average. Tell your PM that your happy with them but to reduce to at least 8%.
EngeloRumora | Ohio Cashflow
http://ohiocashflow.com/
Email Me | Phone MeF@#$ THE REST WORK WITH OHIO CASHFLOW TO INVEST
fingerscrossed wrote:Other Property Managers in the same town are offering 7.5%.
Its a tricky one as I feel I have established a good relationship with the current manager.
Is this ethical
Get over it……….. you are running a business
Hello there,
10% is extremely high. Understandable if your investment is in a hotel letting pool where much more service is required. In this circumstance 10-12% is the norm. In your circumstance absolutely not.8.0% + GST or 8.5% + GST is all that is required.
You want to ensure that you are putting a competent agent in control of your most important investment.
Remember it is your property and all affairs associated with it will be dealt through you. Take control.
It comes down to your needs. If you need less fees to ease the squeeze then do so.
Tip: If you find an agent @ 5.5 or 6.0% + GST amend the appointment of agency agreement so that any cancellations or terminations of this agreement are not dragged out of ver 60 or 90 days from written notice. The standard agreement or default agencies put in place is that when you give them a termination notice in writing that you either wait 3 months until you can move on, or pay them out 3 months management fee.
Ask for this to be amended to 14 or 21 days. You can try for 7 days if you like. This way if they don’t performed, you are not financially committed to a property manager who is not competent.
Upon signing agreement, if they challenge, all you need to state is that provided their professionalism is maintained that this clause will never have to be exercised. You then can say “You are confident in maintaining a high service aren’t you?” …”Great, we won’t have any issues”
Good luck… Hope this helps.
More than happy to make a few phone calls on your behalf. Free of course.
Regards,
Matthew Frost
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