Flat fee residential property management company Acquire, whats your experience?

[dasphinxter]

Like to hear from anyone who is currently with this company and if you think the will end up like the flat fee real estate agents that went out of business.

Acquire is offering property management for $899pa which sounds like a great deal as long as there is no compromise in service.

[PC]

Do a little research on the director - Ritesh Mani.

He was having some cashflow issues - but he may have sorted that out by now.

[wildthing]

for $899pa

and they want this in advance perhaps?

[Glenn]

For a few years I operated a system like that. Flat fee quite a bit less than them plus extras ending up about the same as them.
It worked but the market did not like it. People do not like to be the odd man out. They prefer to pay much the same as other firms charge. If you are offering to do the work at a discount they firstly smell a rat and expect to pay more for extras or they think the provider is not going to provide as good a service. Like buying junk at the Warehouse.
After trying all sorts of formulas thinking I would be clever once I started charging much the same as my competitors (actually slightly more) the work has never come in so fast.
Also I forever regret missing out on the commission the owners would have been happy to pay but I did not bother to collect.

[SuperDad]

Update

I see from their advertisement in the latest NZ Property Investor magazine that they are claiming to have just released in Wellington, Christchurch, Dunedin and Invercargill.

In answer to wildthing's question above, my understanding is that they are charging their fee in advance, although I have also heard it may be payable quarterly in advance.

Details are sketchy, however, and there is not much info on their website.

Has anyone come across RMNZ (Acquire) franchisees in their area?

Paul.

[Dean@Massiveaction]

I know them. I think they are OK. The only problem really is the model is flawed in my opinion. PM's need to be incentivised correctly. No rent received, no get paid. Flat fee structures totally remove that. They get paid, in advance, whether the place is tenanted or not. Not good for landlords.

[SuperDad]

I know them. I think they are OK. The only problem really is the model is flawed in my opinion. PM's need to be incentivised correctly. No rent received, no get paid. Flat fee structures totally remove that. They get paid, in advance, whether the place is tenanted or not. Not good for landlords.

I agree with that sentiment, to a point.

I don't like the idea of full payment up front - you are right, it might remove the incentive to get the best results for an owner.

However, the flat fee model is not inherently flawed in the way you suggest, I believe. A flat fee operator can still have every incentive to do as good, if not a better job than their commission-based competition. It all comes down to whether they want to be running a successful business in 5, or 15 years. A flat fee operator who sits back and does a poor job after pocketting their fee will not prosper.

Just my (biased) opinion.

Paul.

[Dean@Massiveaction]

Biased? Why? Are you running a flat fee PM company Paul?

[SuperDad]

Biased? Why? Are you running a flat fee PM company Paul?

Yes, I am.

I am interested in what the opposition are up to.

[Dean@Massiveaction]

LOL I didn't know. I do think it is an uphill battle for the reason I mention, but I hope you prove me wrong!!

[SuperDad]

Thanks Dean.

I think that there is a certain analogy with the lease option business.

The model is such that it allows for bad operators to take advantage of people (for example, by hydraulicking).

So the challenge is to inform the clients (in your case TBs, in my case owners) of why you are an ethical operator.

Paul.

[Green Fish]

What's the difference between a "flat fee" and the commission charged by 99% of property managers? There is no difference, in my opinion. Either way, the landlord is charged for a service that is not performed.

For example, that last tenant in my unit stayed for 18 months, until I gave him notice (because a *&! relative wanted to move in.) In that whole period, the only time I expended was 2 hours replacing a fitting on the stove.

The fact is that most tenancies are fine and require minimal time. Hence the opposition to an hourly rate by PMs: No money for jam.

Glenn: I accept that you are an expert and would be happy to pay you an hourly rate for time spent, but I'm not going to pay you money for doing nothing.

[SuperDad]

If you spent only 2 hours in the last 18 months on the property, and that was spent replacing a stove, then I would suggest that you are not doing your job very well.

Are you doing inspections?

Do you monitor the rent to see whether it is coming in on time?

If you are doing the above, then I suggest that you have spent more than 2 hours on the property.

Perhaps what you are saying is that a PM is not doing anything that you cannot do yourself. Well, that is not true for many investors, who for one reason or another cannot or do not want to manage their portfolio.

Although I suspect that this is not what you are saying at all.

Paul.

[Green Fish]

I concede that I spent 5 minutes every fortnight checking that the AP for the rent had gone through. So over the 18 months of the tenancy, I spent 1.5 hours checking that the rent had been paid, plus the 2 hours on the stove.

Money for jam if I was the PM.

The only landlords who should use PMs are those who need others to change their nappies.

[Dean@Massiveaction]

Each to his own but I think that is terrible advice.
Unless your life dreams include staying in the same country and having a job forever never manage them yourselves.

Begin how you intend to end. If your goal is to enjoy your life and be free to enjoy it, don't start off getting the worst job in New Zealand :-)