Residential PM Fees

[Wayne]

In negotiating a better deal I expect the PM looked at what income they could get (level of rent) verses the amount of management required (cheap place with shitty tenants makes more work so need greater %). With high end properties (for Hamilton) and good tenants (few issues) makes less work so they can afford to charge me less.

[chrisrussell]

The wider picture is how much is too much? Whilst one has to pay for good management the market establishes what is fair and what is too much. What is charged across the board in Dunedin is not fair and is more like monopolistic behaviour. Perhaps an outsider with a good operation elsewhere shake up the local market to get it working better.

Exactly right in that the market has established the prices as fair and reasonable. Until someone does bring down prices, which may or may not happen depending on viability, the current prices are the market prices.

[Keys]

............. last company were good tenant management wise but irregular payments into my accounts from PM which gave me the jitters

Can you elaborate on that? Did you have internet access to your properties cash flow details?

[Maccachic]

No didn't have access to cashflow was monthly payments to be made to owner but always apologies when reminded payments and payments made pretty quickly no issues I was aware of with tenants payments.


Found some emails things like this: "Payment will appear in your bank account tonight. My apologies we are working our way through the installation of a new management system and have a few hiccups to iron out which we have been systematically working our way through. All should flow though A1 perfect from here on in."

Happened on numerous occasions.

I was working in a company that juggled bill payments as not enough operating cash, so was enough to make me jump ship. Tenant selection and management was great tho.

[Keys]

Yes, I can understand your concerns. If bill payments are being juggled due to cash flow problems there is also the potential of bond not being paid.

There have been several companies which have fallen by the wayside due to too much cash flow being used for operating expenses and none left to pay the bond or owners.

Silly really, the bond money goes into a separate ledger until it is paid. The same applies to things like creditor payments, GST payments and owner payments. All of these ledgers should not be interfered with, or moneys moved to anything other than what it intended for, under any circumstances.

BTW, most of our clients opt for weekly payments.

[Maccachic]

We are only fortnightly currently which is much better than monthly, but weekly would be better again.

I wasn't working in a property company at the time but a red flags a red flag - two years later they are still operating but you never can be too careful.

[elguapo]

What is charged across the board in Dunedin is not fair and is more like monopolistic behaviour.

If this is true there are significant profits to be made undercutting this 'monopolistic behaviour'. The fact this has not occurred indicates it's nothing of the sort.

Perhaps an outsider with a good operation elsewhere shake up the local market to get it working better.

What are you waiting for?

[Keys]

The fact this has not occurred indicates it's nothing of the sort.

Agreed. (MAMC)

[Sharon]

Surprised to read some of the comments re;PMs fees: I'm from the USA and generally find the standard of Management in NZ considerably better than back home. In the States its a very dangerous job, huge staff turnover. For PMs that can foot it in rougher problem areas fees of 15% are considered normal. Here I've got rentals in Hamilton, Cambridge, Otara & pay around 7.5 - 8.5%.
For the all the bs Property Managers deal with I see that as a bargain!

[Davo36]

The tenants would have guns in the states I guess?

A PM might knock on a door and have someone open it and point a gun in their face. 15% seems reasonable.

[Sharon]

In some States its not a very desirable job. Recent times Repo Agents sometimes double as Rental Managers in certain no go areas.

[eri]

Mr Jenman says some Australian investors have lost their lives when trying to chase up tenants who have fallen behind in their rents.

The trial continues in Detroit for the man who allegedly shot and killed Australian investor Greg McNicol from Victoria, who was trying to collect a late rent payment from the accused’s daughter.

"More people have guns in the United States than don’t have guns," Mr Jenman said.

"We’ve already had one Australian investor killed over there. Many others are being slaughtered financially."

http://www.abc.net.au/news/2012-04-24/aussies-lured-by-dirt-cheap-us-housing/3970128

Melbourne school teacher Gavin Hicks believed Andrew Allen’s assurances. He was asked to pay a service fee of $13,000 to invest his $65,000 savings in small apartments in Ohio and a home in Detroit.

But the only tenants he got were squatters.

His investment, worth nowhere near what he paid, has now been boarded up and Andrew Allen has gone missing.

"He was making guarantees. They would pay themselves off in a couple of years," Mr Hicks said.

[Wayne]

It's a side of US property investment they don't tell you about in the seminars.
I suspect 15% is a bit light in some instances.

[Meehole]

What to do? I have given my PM in Whangarei notice and currently still in the process of finalizing the previous tenants bond refund.
Water charges - the PM maintains that the tenant only pays the consumption not the fixed daily charge. Rang WDC and the lady I spoke to said she had never heard of a tenant only paying part of the charge, they usually pay the lot. This is not Akld with its waste water charge, I am aware there is a difference.
Charge for gas hob call out - New tenant moved in and rang PM to say that gas hob was not working. Gas Co went out and found that switch on wall for unit had not been turned on. This cost is now ours, says the new tenant is good and don't want to upset her by charging her! Asked the PM if she asked the tenant if they had checked the switch, she said they are not contractors what do they know about these things?
PM got joinery and locksmith in to install security stays on windows even tho we had made arrangements to come and do repair/maintenance work ourselves at changeover of tenants. Cost was greater than we had allowed on PM agreement and we could not access the property to do the work as the tenant did not return the keys. Our cost was hubbies airfare from Chch and a week off work and now the locksmiths charge.
Can I invoice the PM for these expenses after I take over the management? Has anyone had dealings with these issues before?

[chrisrussell]

What to do? I have given my PM in Whangarei notice and currently still in the process of finalizing the previous tenants bond refund.
Water charges - the PM maintains that the tenant only pays the consumption not the fixed daily charge. Rang WDC and the lady I spoke to said she had never heard of a tenant only paying part of the charge, they usually pay the lot. This is not Akld with its waste water charge, I am aware there is a difference.
Charge for gas hob call out - New tenant moved in and rang PM to say that gas hob was not working. Gas Co went out and found that switch on wall for unit had not been turned on. This cost is now ours, says the new tenant is good and don't want to upset her by charging her! Asked the PM if she asked the tenant if they had checked the switch, she said they are not contractors what do they know about these things?

Hi Meehole. I'm a PM. The fixed daily charge is correct. We can charge incoming and waste in Auckland but not fixed, that's been ruled by the tribunal/tenancies act.
The Gas seems unfair that you'd have to pay for that. Generally we would be trying to charge the tenant for that. If they disputed we'd just have to go to the tenancy tribunal and hope for the best. It's never black and white.