Presently reading an article as follows (my comments later):- have provided new property management fees for 2015.
have also created a special bonus at the end that will tell you exactly how much you are spending on an agent. In the past many Property Owners were basically forced to use an Agent to help manage their investment properties because of a lack of tools and resources available to property owners to go DIY on a professional level. However many owners still use an agent and as always the first thing investors think of when using a Property Manager is the cost.
The cost to use a Real Estate Agent to help manage your property differs from one city to another and Agent to Agent across Australia.
If you research the internet you will find most agents charge around $1500 – $2500 per year depending on a range of factors generally the rent amount, fees and how often you need to find new tenants.
After speaking to a range of other professionals and researching my own competitors throughout the last 7 years I have found the below to be an average cost schedule for most reputable Real Estate Agents in 2013.
Management Fee – 7.7% – 8.8%
Lease renewal – $200
Advertising – $150
Postage/Admin – $8 per month
As an example, If your property was $400 per week and you advertised and renewed your lease within the one year the basic cost of using a Real Estate Agent will be around $2047 at 7.7% management fee.
The above fee schedule does not involve other costs that will be similar if you used any quality level of Agency or managed your own property such as the costs to go to Tribunal, Landlord Insurance, smoke alarm servicing, TICA/NTD checks as these payments generally go straight to the company and not the Agent.
Take note that some agents may charge a lower fee somewhere but charge higher fees or add extra fees elsewhere to make up for it. If you shop around you will be able to find that you can get it cheaper, but be warned this will normally come at a cost. I’ve personally charged around these figures stated above however I have had competitors charge 5.5% management fee; and no wonder a couple of them went out of business or got sued by an upset Property Owner for incompetent management or just the fact that they focus on quantity rather than quality. Using a cheaper agency, may be fine for a year or two but somewhere along the line you will find major faults and as I always say, ‘they always come running back’.
As a Real Estate Agency, If you charge a much lower rate, you will get more business but this requires more work and extremely good systems but because the fees are so low its difficult to afford the staff and software costs associated to managing a higher number of properties. Property management fees are getting a little more tricky.
Some are going for a simple approach like 10% on rent collected with everything included except for miscellaneous things like fronting up at tribunal and tenant checks.
On the other hand some agents are trying to display a real low figure to get you interested like 4.4% on rent collected but then charge hidden fees for routine inspections and all sorts of silly add ons.
On average this could be used as a benchmark for agent fees in 2015:
Management fee – 7.7% – 8.8% including GST
New Letting fee – 1 weeks rent plus GST
Advertising – $150
Postage/Adim – $8 per month
EFY Statement – $30
You may also pay extra for:
- Tribunal preparation & attendance. (about $200)
- Lease renewal for current tenants. ($50 – 1 weeks rent)
- Tenant checks on NTD and TICA. (about $20 per check)
You can negotiate lower fees in some circumstances. For example if you have multiple properties next to each other or if the rent amount is more than $600 per week you have good grounds to start negotiating.
Here is what the REIQ says about charging:-WHAT REIQ AGENTS GENERALLY CHARGE
Here is what we charge at LJ Gilland Real Estate Pty Ltd:- note NO HIDDEN FEES
We take pride in managing properties, our Core business, you will find that we differ in the level of care we take with, for example, the amount of photographs we take of your investment property, which helps to keep you informed and ensures that you make confident decisions, we strive to ensure your property is well maintained, and you receive prompt rental payments.
AT A GLANCE
- Property management
- Individual solutions to fit our client’s needs
- Body corporate management
- Competitive Commission Rates
- LET FEE FOR REFERRALS, We are a business built on 20 years of Referrals.
- NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
- PHOTOS TAKEN ON ENTRY, tenants are shown about safety switches and water mains etc. We meet all tenants on site.
- Hands on approach to all Property Investment Management Matters.
Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. We offer property investor’s the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services.
Please check out a brief video on You Tube http://youtu.be/v3mJHs_4_sQ taken recently at Redbank Plains, showing a little of what we do at handover with a new tenant. We go through the property with the tenant showing them how appliances work. We also spray the weeds as a courtesy both owner and tenant. I have not yet had a chance to post this video to our YouTube, Facebook, Google+ registered Business Pages. The EXIT and the ENTRY turnaround time was within a 7 day time frame, and the property was prepared in ship shape condition.
The following is an Article of interest recently posted on one of our wordpress blogs for your perusal and information as follows: http://wp.me/p1bR1G-kzL
Re:- Advertising Strategies ON FINDING A SUITABLE REPLACEMENT TENANT WHEN SAID TENANT IS VACATING THAT YOU ARE HAPPY WITH:-
Please find Below advertising options offered by Realestate.com and Domain as well as other advertising sites we use. The reason we advertise your property worldwide with so many other websites is to keep an organic SEO. We are finding that portals such as Domain & On The House pick up on our listings and sponsor them on Facebook is because we blog their materials as well and we are multicultural so we relate to a very wide audience, worldwide.
See below costs for DOMAIN & REAL ESTATE.COM to maximize the views on your property.
DOMAIN ADVERTISING OPTIONS
Standard Priority Placement: $55 GST INCLUDED
This is what it costs to list your property for sale with Domain as a standard listing.REALESTATE.COM ADVERTISING OPTIONS
- Feature Listing : AT COST (NEED TO CONFIRM THE AD COST PRIOR TO A RE ADVERTISING YOUR INVESTMENT PROPERTY WHEN TENANTS VACATE AS REALESTATE.COM.AU CHARGE DIFFERENT PRICES DEPENDING ON THE SUBURB. This is the cost to list your property on Real Estate.com for a standard listing) Showcase the best features of your listings to more potential buyers with Feature Property.
- Seen before all Standard listings in search results.1
- 1.7x more enquires than a Standard listing.2
- Grab buyer attention with interactive photos.www.ljgrealestate.com.au (our web site) no chargewww.Onthehouse.com.au No Cost to youwww.TheHomepage.com.au No Cost to youwww.homehound.com.au No Cost to youwww.AllHomes.com.au No Cost to you www.Homesales.com.au No Cost to you WordPress business pages (e.g. http://wp.me/p1bR1G-lgS ) ; Linkedin Company Pages; 12 Twitter business pages; & Boards on Pinterest. We also use YOUTUBE BUSINESS PAGES; Google+ registered Business Page & http://www.facebook.com/ljgrealestate & http://www.facebook.com/LJ Gilland Real Estate Pty Ltd Business Pages & http://yellowpages.com.au/qld/north-lakes/lj-gilland-real-estate-pty-ltd-15545496-listing.htmlWe currently provide RP Data Automated Valuation for your valuable investment property at NO COST. An automated valuation or AVM (automated valuation model) is just that – completely automated through a computing process. RP Data values every property in Australia each week. The methodology relies on complex modelling that uses the dwellings attributes and compares the property with surrounding homes that have similar characteristics that have recently sold. All AVM’s come with an accuracy score that provides an indication as to the reliability of the valuation. The AVM’s can be very useful tools for providing vendors with an independent assessment of a property’s value. We look forward to being of service to you.Best Regards Linda & Carlos Debello “Your Local Property Management Specialist” LJ Gilland Real Estate Pty Ltd (http://www.ljgrealestate.com.au) PO BOX 19 ZILLMERE 4034 (07) 3263 6085 0400 833 800 (Mob 1) 0413 560 808 (Mob 2) 0409 995 578 (Linda)
- http://www.ljgrealestate.com.au/index.php?lan=ch Chinese website