Management fees for serviced apartments - questions....

[Sue]

We are thinking of purchasing a serviced apartment at a beach
town, and the management fees payable (if you take the management option,)
are 30% of the rental income. Is this an average percentage? If not, what
would be average?
> Also, the contract allows the manager to spend up to $1000 at a time for
repairs or whatever without body corp approval. Is this also a normal
amount?

[inzvestor]

The figure itself (30%) sounds fairly high, but it depends on the level of services.

Do you have a list of the services provided to warrant this level of fee?
Does this include bed making, cleaning, pool cleaning, groundkeeping etc??

If so, it may be about right.

[graemeh]

What do you have to pay towards running costs?

I was talking to a motel manager in Queenstown that was also going to be managing serviced apartments. He told me that the income was split 60/40 with 60% going to the owners. The owners paid for rates, body corporate, insurance, power etc. I think the manager had to cover the cleaning, advertising and management out of their 40%.

[Sue]

Thanks for your replies, I had a look on the web at other managed apartments for sale, most won't disclose the management fee percentage until you contact them! Of the couple that did, one was student accomodation at 6% and the other was 20%.
V. interesting, and we decided that 30% is probably ok, given the popular location and hopefully busy occupation.

[VCTLDH]

Does anyone else have anymore examples they could put up? Especially in Queenstown? We have a property there and we are thinking that the rates we are being charged are a bit high..... 57% to management last month. (included credit card fees, marketing,cleaning)

[Gladdynook]

Bachcare offer property management for private holiday houses.

They charge 30% (last time i looked) for their services. This includes taking bookings, checking in and out of guests, managing payment etc. I'm not certain if they arrange maintenance for you, or simply pass this on to the owner to rectify.

Cleaning fees are charged directly to the guests if required.

Sue, you are looking at an apartment so one would think there are multiple units in the block. How do they manage occupancy? ie are they all the same and therefore bookings work in a round robin arrangement? or are some better than others and they get requested by guests in preference to others? I'd hate to have the unit that only gets booked when all the superior ones are full.

[Maccachic]

This is a really old thread (2004) I don't Sue is around any more

[Gladdynook]

This is a really old thread (2004) I don't Sue is around any more

DOH! just saw the new post today, and assumed the rest was current.

[VCTLDH]

Yes this is an old thread but I am interested in new information on serviced hotel like apartments. So any information would be greatly appreciated.