Hi guys,
I am looking for a property manager for a place I have in Brighton.
Rent will be c.$600-$700 per week dependent on market appetite I guess.
Does anyone know what rates I should be negotiating with the managers?
I have been told competitive rates are 5% fee on the rental and 4 weeks rent to engage?
All managers have quoted me 8-9%, I assume this is negotiable? Especially given the rent is at the higher end?
Any help would be appreciated.
Hi propertyboy,
I suppose it all depends on the type of service you get from the property managers, but in my opinion 8-9% is high, and 4 weeks letting fee is definitely way too much. My one charges me 5.5% and letting fee equal to 1.1 weeks rent.
Make sure you ask them what they provide for you for engaging their services (i.e regular inspections, tenant checks, VCAT applications, etc) and find out what these extra expenses may cost.
Maybe because its Brighton PM's might think it automatically assumes a premium charge?
Cheers
Tom
Four weeks letting fee is huge – I've never heard of such a high fee.
I don't what PM's charge in that part of the world but in Canberra it's normal to be paying around the 9% to 10% mark with a one week letting fee.
I think I pay about 8% for an interstate IP in Wagga.
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]
Thanks,
so it seems the market rate is 5%-6% rental fee and 1 week letting fee?
Is this what I should be pushing for?
Is that 1 week a recurring fee or is it only once upon engagement?
The 1 week fee is usually triggered for each new tenancy placement.
I don't know what the going rate is for PM's in your part of the world – but focus more no quality over price because at the end of the day, a couple of % off is only going to be a few dollars a week savings.
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]
I agree with Jamie, I currently have two in the same town with different agencies. One charges 9% and the other 11% (Expensive I know!), and I am currently debating whether to axe the one charging 9% and put them both with the 11% agent as the quality and efficiency of the two are quite different! I wish the cheaper one was better but it didn't work out that way unfortunately!
Grab a property manager that does the job and wont be a pain in the ass to deal with .. or a cost you have to bear.
If you worry about finicky little things like whether a reletting fee is the issue OPPOSED to the quality of the property management you are going to get .. you may be looking at the wrong criteria for your property management concerns.
Grab a property manager that does the job properly and doesnt cost the earth to have as a utility.
THATS the important concern.
If you are fighting over a singular percentage point and ending up with a guy or gal who really doesnt know how to look after your property then your efforts for looking after your property will be increased, and so will your stress level, and so will your time and effort wasted on what should be easy sailing.
Grab a guy or gal you can trust .. who doesnt cost the earth .. and does the job so you dont need to.
Sit on interviews with the property managers until you achieve that degree of trust to hand your property across. DONT BE SCARED TO DO THIS … be scared when you didnt do this.
If you need to step in and request property management from the property manager then the property manager isnt doing what he/she should be paid for.
How do I find out who the good managers are? I have always manged the place myself but cant anymore as I am moving,
I have had real issues with my body corporate manager.
For example, we had a major work done to common land and he did not manage the works. He did not check the work post completion to make sure it was in line with the contract. It was ok in this situation as I was abel to check the works and chase things up however if I was overseas all the poor work would have just gone unnoticed.
How do I make sure my manager is capable of managing the job properly if I am overseas? I want someone who will undertake the same due diligence as me. However, it appears only way you can make sure they will manage trade work is to ensure they have goodwill with existing tradies who wont rip them off?
propertyboy wrote:How do I find out who the good managers are? I have always manged the place myself but cant anymore as I am moving,Could be worthwhile starting a new thread requesting PM recommendations in the area.
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]
Propertyboy
I have a property in the area, managed by an Agent based on Church St, Brighton. I presume you are talking about Vic.
Managed for three years, rental of $565 per week currently, I've had 2 excellent tenants, mgt fee of less than 7%.
The Property Rental director is very professional, and himself involved in the development/investment game. He recently passed my account to an offsider who is equally as good to date.
PM me if you want to know details.
That would be grealty appreciated.
4 weeks rent as a fee is more like commercial property.
Should be like first week's rent first lease, then half a week's rent for re-lets.
Check though on other costs like Tribunals appearances, warnings, inspections etc, get the whole list very clear.
Usually pays to have all properties with one PM, enables you to negotiate for better rates from a stronger position.
Also a very nice property in a very nice area attracts better tenants who are not so labour intensive for PMs so a lower fee is realistic.
Good luck.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Dont forget to also look at other fees charged, some charge for lease renewals, routine inspections, court hearing, quotes, EOFY statements, etc
4 weeks let fee is far too much. I will re-iterate that you should be focusing on quality not money especially if you are going overseas.
Ask…
1. Will you take photos on the inspections, if so, how many, of what and how often.
2. You will need to set a schedule in your calendar of your expectations from the manager so you can keep them accountable to when you want to receive updates etc.
3. Ensure they disperse your rent at least fortnightly, not monthly.
Since you live locally, send a friend in to test the service of the agency as a tenant. This will give you a good indication as to how good they will be in finding you a tenant. Ask questions like, "is whats on realestate.com all of your listings"? if they say they ahave more, dont use them.
just a few points
Thanks Josh, you have raised good points for me to consider there. Appreciate it.
Also thank you to everyone else for your help.
I was mistaken the letting up fee is 1.5 weeks.
I have found someone who is willing to rent my place for 24 months at a decent rent. I am contemplating on going private and mitigating risk by getting 3 months rent upfront and having adequate landlord insurance. If I am comfortable with the tenants do you think this is completely something I should avoid if I will not be on the ground to manage the property? I mean worst comes worst if something goes wrong my landlords insurance will cover (putting aside sort term liquidity issues while I am not receiving rent as I will have adequate cash reserves to act as a contingency).
You may not be able to legally hold the tenant to staying three months in advance. The rest sounds good, you will need to inspect the property or at least have someone do this for you every now and then. Also, just work out how you will deal with any maintenance issues that you foresee arising.
Ie: have the numbers or emails of reliable trades on hand to deal with any issues for you. If you get a good tenant it can work perfectly, it has many times for me however maintenance has been low as it has been for new property of mine.
if you're in an apartment block this could be very easy as maintenance would be very minimal generally
I thought the rent in advance restriction only appled in victoria under the residential tenancy act if the rent is less that $350 per week? I will have to revisit this.
Unless you're experienced at PM or want to take the risk and learn the hard way, get help on this.
There are a number of vital factors in the rental equation like rent level, accurate and enforceable documents like lease, condition report etc, to name a few not all, but assuming those are in order, most important consideration is tenant selection which will render many other assumed advantages like rent in advance a moot point if you get it wrong. Unless you have skills in this area or a great well vetted tenant waiting, I suggest you pay a local PM to vet and select one for you using TICA the default tenant database, get all the paperwork done for you as well, get the tenancy setup correctly, observe it all closely for future reference, and enjoy the ongoing benefits.
Good luck,
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
The Residential Tenancy Act states that the Act does not apply if I intend to use the place as a PPOR. So what applies then? Does this mean I can ask for 3 months rent in advance as I will be moving back into the place after the fixed term?
9. Principal place of residence
This Act does not apply to a tenancy agreement
that is a fixed term tenancy agreement if—
(a) immediately before the agreement was
entered into, the rented premises were the
landlord's principal place of residence; and
(b) the fixed term is less than 60 days; and
(c) the agreement states that—
(i) immediately before the agreement was
entered into, the rented premises were
the landlord's principal place of
residence; and
(ii) the landlord intends to resume
occupancy of the premises on
termination of the tenancy agreement.
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