Property Management

[Auckland Newby]

I think if the question is asked the answer will be .... 'it's the way it's always been charged' ...... it just doesn't seem logical thats all.... easy, yes, but not logical. I found a PM who comes well recommended who charges less than 8.5% so will give that a go for a while and see how we go.

[Maccachic]

Hi P'investers,

We own a rental on the North Shore, new house low maintenance, rent out at $720 pw. Current PM charges 8.5%+ GST and did a good job in getting a new tenant once the other one moved out. The property was open for 1 day. This is a low maintenance property from a repair and tenant turn over point of view. Is there room to negotiate on fees? We both work full time so don't want to manage this property ourselves. Anyone know of a PM that is cheaper than this but still does a decent job?

Cheers

Personally if you have a PM giving you good service, putting in good tenants - Id much rather pay a bit more per week than take a chance on the next one (unless you have really good current 1st hand references, from people you know and trust). I pay 10% and I have swapped PMs due to service which is a lot more important to me than a few extra $$ each week.

[Baywatcher]

Hi P'investers,

This is a low maintenance property from a repair and tenant turn over point of view. Is there room to negotiate on fees?

Cheers

I have taken over the management of 4 brand new properties in the last few months in up market subdivisions.
3 I discounted fees at 1% the other 2 %. Great quality tenants signed up for 1-2 years, rent is $30-$40
more than for an older house. Less work involved, little maintenance issues, high tenant demand so are prepared to
discount. Find an independent company in your area that is is flexible and can offer a personalised service.

[Oracle]

Oracle Property Management - full service at 6.5% + gst including advertising, entry inspections for all tenancies including photo set of 200-400 photos establishing the condition of the property, no further fees apart from 6 monthly inspections ($46 each). No rental arrears or vacancy at this point in time.
Thanks.

[stakeproperty]

We totally agree speights boy - thats why we charge $99 plus gst per month - no matter what the rent level - why are landlords being penalised by commission based charges?

[chrisrussell]

I think it's a valid question you ask. You should definitely be able to negotiate. Why should you be getting charged $68.42 per week (8.5+gst x $700) when someone else with a older house, requiring more work, is charged $37.15 per week (8.5%+gst x $380). You are subsidising their property's management fees!

[Auckland Newby]

I found a company that charges a flat fee irrespective of rent and all seems to be going well so far. Inbox me if you want the details.

[chrisrussell]

I found a company that charges a flat fee irrespective of rent and all seems to be going well so far. Inbox me if you want the details.

j
Fixed fees don't make much sense. Would you put your investment of $10,000 shares with a fund manager who charges a fixed fee, irrespective of performance? Would you put your property investment of $500,000 with a company that charges fixed fees irrespective of performance?

[Auckland Newby]

What kind of perfrormance are you expecting for your property other than annual rent increases in line with the market and that it is fully tennanted? It's not as if you're going to get a better return if you pay more management fees.

[chrisrussell]

What kind of perfrormance are you expecting for your property other than annual rent increases in line with the market and that it is fully tennanted? It's not as if you're going to get a better return if you pay more management fees.

It's about aligned interests. A percentage based company has exactly the same interests as you. Whereas fixed fee companys don't. If stuff goes well, they benefit. If stuff goes badly (rent arrears, vacancy, failing to review rents, failing to do inspections) they still benefit!! You'll be hard placed to find another investment class that has fixed fees.

[speights boy]

You'll be hard placed to find another investment class that has fixed fees.

My sharebroker charges me a fixed annual fee for their advice and services, (apart from normal buying or selling).
It doesn't matter what the value of my share / bond portfolio is.

[chrisrussell]

My sharebroker charges me a fixed annual fee for their advise and services, (apart from normal buying or selling).
It doesn't matter what the value of my share / bond portfolio is.

so no performance based commission?

[speights boy]

so no performance bases commission?

No.
I pay for advice and certain services.
They don't decide where my money is invested, that remains my decision.

[Davo36]

Hey Smarty Boy, the word you're looking for is advice

[speights boy]

Thank you Davo.
I have amended the spelling.