Advise on PM sought

Hello
I'd love to hear anyone's views on my issue. I've purchased an appt off the plan which is due for settlement in June. The property is at Kangaroo Point, QLD, and there's a property manager touting for business who will be living on-site. The marketer is recommending we sign with the PM, who seems to be quite experienced, and the developer is offering to guarantee the first 3 months rent if we sign with the onsite PM. I can see there would be definite advantages to having a property manager who is onsite and working with the developer, but the thing that concerns me is the fee seems a little high at 8% + GST. I'm told this is a flat fee and there will be no other fees (I'm not sure what they would be in any case, maybe a letting fee?). Would be very keen to hear your views!

 

In my experience on site managers are useless and from what you've described I wouldn't be surprised if there's some commission sharing going on there (which isn't all bad, of course, but not ideal).

I'd suggest you look on here and ask for recommendations for PM's (@Andrew Hancock is my go to - but not sure if he covers the area). Fees should be the last thing on your mind, compare the services first.

Also 8% + GST as a flat rate is rediculously cheap.

 

In my experience there sounds like there is commission sharing or spotters fees involved, 8% plus GST is steep, look around you will certainly do better.

When an agent guarantees rent or to rent your property within a specified time frame they tend to put anyone in the property. Preference should be giving to quality tenant selection and as an investor myself I prefer my properties to be vacant an extra week and approve a quality over a poor tenant as it will only end up costing you in the long run.

I have recently lost a property as the owner demanded I approve a tenant with poor rental references and a ledger always in arrears. I advised her that in approving these tenants that I wouldn't be working in her best interests. Her reply was "just put the tenant in the property", I approved the tenants and passed the listing back to the owner. This owner call me after 3 months and now wants me to take the property back and do whatever means necessary to evict the tenants.

 

Thanks for your respone Lil Skater. I will ask for some recommendations. I did consider the fact there may be some fee sharing ongoing. Otherwise, I can't imagine why the developer would be offering to guarantee the first three months. As to 8% + GST being cheap, when I've looked at other agents in the area, they're more around 7.70% including GST, but not sure if they have additional costs.

 

Thanks for your response, Tanya. Yes, I think I agree that a good tenant is worth waiting for! Ultimately I think it's what all investors want.

 

Generally the fee is around 7%, just check there are no extra monthly, disbursement or inspection fees, we have a standard 7% only