I know there has been a lot written about how much Perth Real Estate agents are ripping off landlords with high property management costs but does anybody know about any formal complaints having been made to Fair Trading or local members of parliament etc.
I see enough evidence on Whirlpool and other sites to suggest there is a consistent feeling on this problem in WA.
Its a free market economy. No ones ripping anyone off. You’re free to self manage if you don’t want to pay the cost, or to shop around for best price you can find. Also, price doesn’t always correlate with service.
I’ve done extensive research on opening an agency in both Perth and interstate. And despite Perth charging a heap more, I believe interstate would be more profitable. Perth staff are expensive, Perth office leases are expensive, the bottom line isn’t any better despite charging more.
Market economy, as DT has mentioned – if there is the potential to open an agency running on lower margins as their point of difference, it will most certainly emerge. Some of the business administration costs in WA are quite high.
I don’t understand what you’re getting at. If you don’t like the price of the service shop around til you find one you do. Or self manage. Or if you think they’re making a fortune, join them :)
I think the problem in WA is that the price has somehow come out at that level and all the players are just keeping the status quo – If your competition is charging high prices you can too. All it would take is one or two new entrants to come in at national prices and then market forces would come into play.
What I’m getting at and the evidence is clear for all to see is landlords in WA are getting ripped off compared to other parts of Australia.
So, what do we need to do about it?
Firstly, landlords need to negotiate – use the eastern states numbers as the lever and when the agents say costs are higher then over east then tell ’em that just aint true – refer my salary stats $70k for a PM – same as on the east.
Run Property are coming in the next 12 months or so – competition is coming.
Bish – look at it as an opportunity. You’ve identified a flaw in the market – introduce a lower cost PM service on the West Coast. Instead of fighting it – capitalise on it :-)