Property Management Fee 8.75%?

[freeloader]

Hi I currently have one property in Mt Eden being charged for 8.75% fee for less than average service. They basically collect the money. The tenant has been there for years and are no trouble. They do a once a year inspection and I don't get about condition and basically I know about it as there is a reduction in payment one month.


Is this a fair charge for Mt Eden for the level of service? What rates are you getting? Anyone can recommend a better property manager?


Cheers

[Keys]

Sometimes, what one chooses as usernames influence others perception. Just like email addresses.

As for the rates in Mt Eden? I have no idea.

[Oakmont]

Seems a bit high. I work for a management company with property all over Auckland, (Mt Eden included) and we typically charge 5 to 7%

[Nick G]

Barry @ Quinovic Mt Eden has a good name, you won't save much on your fee there but they have the reputation of getting top dollar rents so you'll make more.

[Chameleon2015]

Hi - You need to ring your insurance company and find out how often the property needs to be inspected in order to meet the conditions of your insurance policy. You may find your policy is declined if the 3 monthly property inspections have not been completed with a written report as proof of the inspection. I also suggest a video recording is made of the condition of the property which will also confirm the date and time of the inspection.

Although your tenants may be long term and may be paying rent on time etc - sometimes good tenants are good tenants because they do not want to attract any attention from the property manager. This allows them to do whatever they like between the 12 monthly inspections ie: have co-tenants or cause damage or fail to report issues that need repairing which can escalate repair costs.

In addition good tenants can go bad and signs to look out for are late rent payments; locked rooms that are not accessible during inspections; fail to pay water rates or increased water rates bills; failure to maintain the gardens; change in their personality; inability to be contacted or at home during the day when they should be at work; complaints from neighbours about increased night time activity.

The above signs can be indicative of a tenant who is using or manufacturing methamphetamine. You can lose all your equity in your rental property if you have to pay to clean up a clan meth lab in your rental property. Your insurance company may not cover you if you have failed to undertake inspections as per the policy.

If your property manager is a professional they should be meth managing your rental property by sampling before the tenants move in AND again 2 weeks before the end of the tenancy and before the bond is returned. In my opinion the only accurate method of is to send the samples to a lab for analysis as the lab can detect as low as one smoke of methamphetamine or 0.02 micrograms / 100 cm2. You can also install a monitored alarm which detects the manufacture of methamphetamine.

If any individual room in your rental property exceeds meth residue levels of 0.5 micrograms / 100 cm2 you may well be in breach of the Residential Tenancies Act as you will fail to meet your obligations under section 45 1 (a) (c). Your and/or your property manager may find yourselves defending a claim in the Tenancy Tribunal.

You should also check your tenancy agreement and make sure you have listed a maximum number of tenants permitted to occupy the property and the property manager should be checking this to ensure it is not exceeded.

In terms of the fee being charged if 3 monthly inspections/written reports are not be provided then I suggest that fee is too high as they appear to be under-performing.

I am a property investor and I own a private investigation company which is actively involved in the property industry teaching landlords and property managers how to background tenants and facts about methamphetamine and how to prevent contamination. I also sample properties, boats, cars etc for meth contamination.

As you can read I am passionate about this topic and I hope this information is helpful for you.

Debra Young
Chameleon Investigations

[geraets]

8.75% is madness. You can negotiate. I pay no more than 7-7.5% and no extra charge for obtaining workers/repairs.
Highway robbery.
I have three different manager at 4 properties and cannot say I am ecstatic about any. I still have to keep a close eye on the places.

[PTILoveYou]

anything more than 7% is expensive...

for mt eden, where quality tenant pool is large, i say 6% is more reasonable.

[Nick G]

We should check if it's plus or inclusive of GST.

[Keys]

What are your average rents over your portfolio Gary?

[PTILoveYou]

480/wk per property

[Keys]

That equates to an equivalent rent average of $400 for a 7% fee.
The management costs (excluding office space) are reasonably standard across the cities IMHO.

[PTILoveYou]

That equates to an equivalent rent average of $400 for a 7% fee.
The management costs (excluding office space) are reasonably standard across the cities IMHO.

Well but the thing with mt eden rentals in Auckland is, most of the rents are like $700+ for a 3 beddy house.

8.75% of $700 or even $1000 is a lot of management fee, especially the tenant pool in Mt Eden is of higher quality (less management worries) than say compared to Manurewa or Mangere East (much lower social economic areas).

[Keys]

It is, therefore, possibly inaccurate to say a certain percentage is excessive.

[PTILoveYou]

It is, therefore, possibly inaccurate to say a certain percentage is excessive.

Well different investors will have different opinion between value for money and excessive.

[donna]

I have one rental on a fixed fee - and unfortunately the rent was lower than expected so it works out at a whooping 9.8% - yeah Im embarrassed to admit I'm paying it. On the positive with rent increases the percentage goes down or I'll just move to another PM company.

cheers,

Donna