Does anyone else find that quotes through PMs are too high?

Discussion in 'Property Management' started by Wiz, 10th Jan, 2019.

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  1. Wiz

    Wiz Active Member

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    I mentioned this in a recent thread, and I'm not sure if other people have experienced this or not.

    I am generally happy with my PM. Payment is always on time, communication is good, inspections are thorough and they find good tenants.

    One thing I have noticed, however, is that the quotes they provide me with are never the best prices. Whenever repairs are needed, my PM will organise written quotes. If I ring around and get my own quotes, I always find that I can get the same work done cheaper elsewhere.

    My PM tends to use people and companies they have used before when getting work done. I am suspicious that these companies hike the prices up a bit when they know it is going through a PM in the hope that the landlord will just assume that the PM knows best.

    In a recent example, after being provided with a written quote from my PM, I rang around myself and got quotes that were $400 cheaper. When I rang the first company back and told them, they immediately reduced their quote by $400. This company had also suggested that I purchase some additional items, which I was able to buy myself for another $300 cheaper. So the quote I got through the PM was $700 more expensive overall.

    Has anyone else noticed this? Do companies apply a "lazy tax" on quotes that go through PMs?
     
  2. Paws of Fury

    Paws of Fury Member

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    We've always received terrible quotes through PMs.
    Quote to fix a leaking tap because its not a "simple solution" was $1200.
    Called our plumber and was done in 15 minutes and cost us $100.

    Another time a tenant complained about Air-con not working. Agents air-con people quoted 2k to replace without even checking. Sent my electrician who changed the batteries in the remote and tenant paid $70.

    Our previous plumber stopped working for "others including us" when his partner got a job as a property manager. He was thrilled to have secured the new income source at solid rates and was making more than twice working just for that agency. Was an eye opened for us.
    Always get your own quotes if you have the time.
     
  3. Zoolander

    Zoolander Well-Known Member

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    My agent’s preferred supplier quoted $2300 for a new aircon and install. Identical model plus install at Good Guys was $300 cheaper. Definitely worth a sense check for big ticket purchases.
     
  4. charlie01

    charlie01 Well-Known Member

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    Simple answer: PMs won't shop around for you. They just want to get an easy / quick solution. They don't care about your money. Tradies often take advantage of it. And also you pay more money for poorer wokmanship.
     
  5. Kinnon

    Kinnon Well-Known Member

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    From the other side of the coin here... My husband and I have a business that do a lot of work for PM's as well as private jobs, body corps, commercial, gov't, NGO's and whoever else I missed. When it comes to quoting it makes no difference who we're quoting or invoicing for. They get the same rate across the board. Occasionally there is a "you're going to be a PITA" tax applied to quotes but they're usually private jobs. But, we're usually booked out 8-10 weeks in advance for the bigger jobs with people happy to wait when told and we're certainly not the cheapest (or most expensive) going around so must be doing something right...

    Overheard recently a principal out the back when picking up keys - she was defending her tradies quote (not us). Essentially saying that yes, the quote might be a bit higher than what the LL got but the trades she has on her books she trusts. Not only are they fair in their pricing but also to do a good quality job. Nothing worse than multiple visits to site to fix stuff ups when only one is required. Or a sub par job being done just to have the same problem addressed however long down the track when a proper job could be done to begin with.

    I've lost count of how many fix ups we've done of previous people who have done a sub par job.
     
  6. charlie01

    charlie01 Well-Known Member

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    At my IP, the edge of the kitchen sink had a tiny gap a couple of years ago, which caused water to leak into the space under the sink. My previous PM hired a local plumber to seal the leak, which caused me $110. Two - three weeks later I went to the property to check another issue and found it was still leaking. So I had to re-do it. Later I went back a couple of times for something else, I also checked the sink to ensure it had no more leak. Of course I am not happy with that dodgy plumber.

    Another example, the same PM hired an antenna man to install a new antenna because the tenants complained about the existing one. The IP is in Mt Gravatt area and that antenna man pointed antenna to Wynnum / Manly direction. I am not sure if he did "a good quality job" ?

    One more example: I paid fire alarm service fee who was hired by the PM. That chap didn't bother the replace the dead batteries and eventually I had to take over because I couldn't trust him ( I don't care whether PM trusted him or not).
     
    Last edited: 10th Jan, 2019
  7. gman65

    gman65 Well-Known Member

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    While sometimes I do think I may be able to get it cheaper if I shopped around myself..if you think about the research time and things, plus not quite knowing how well who you choose will be any good anyhow.

    Altough that said, it does pay to have a rough idea of what things cost.

    PM's want minimal fuss, and prefer to deal with tradies who turn up on time, who charge somewhere around ballpark, who perform the job without further visits, and have runs on the board. If they deal regularly with these peeps then they've got higher confidence this is the case.

    I'm guessing that tradies prefer the volume/regular work rather than pushing high prices also.

    So all in all it seems like a fair win win to me to use the PM's suppliers as it involves less stuffing around.

    And to be honest I really couldn't gaf if the PM's supplier was just 10-15% more as the government will be giving me back a chunk of that anyhow. Just do it properly.
     
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  8. Ghoti

    Ghoti Well-Known Member

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    Well to be honest, Ive been pleasantly surprised at the prices my PM has obtained for admittedly minor work. e.g.
    $180 to supply and fit replacement sliding door lock and replace letter box post.
    $160 to service gas heater, including replacing thermostat.
    $230 to install a new underbench oven, dispose of the old one and replace divers in two led downlights.

    No complaints from me.
     
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  9. charlie01

    charlie01 Well-Known Member

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    Lucky you.
    I was going to ask you for your PM's details then realised you are in Melbourne (I'm in Brisbane)
     
  10. Tom Rivera

    Tom Rivera Property Manager Business Member

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    It's interesting seeing this from the other side of the coin. In my experience, many trades don't like dealing with Real Estates because apparently we don't like paying fair money, the general consensus is that we're cheap asses. We generally do try to find Trades we can stick with, having a strong relationship with reliable people makes everyone's job a whole lot easier- good, reliable work at fair prices.

    That said, you really shouldn't be able to easily find the same work for cheaper. That's our job. Alarm bells.

    The key to this problem is that most PM's out there don't understand what's involved in the work they order- they don't know how much it should cost or what's involved in a quality job. This results in plenty of shoddy AND over-priced work. There's also some incidences of kickbacks or conflicts-of-interest, but these really aren't that common.

    A great recent example was on a property I just took over. The owner had been quoted $5,000 for a new fence....good old hardwood fence has a good decade left, It just needed new posts! $1,100 later and we're all sorted. I could have sunk a few pine posts in for $800, but we did it properly by concreting hardwood in a good depth. The old hardwood is still likely to outlast the pine rubbish they use these days. Old PM didn't have photos of the problem or anything, just sent off for quotes then forwarded them to the owner.
     
  11. Shazz@

    [email protected] Well-Known Member

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    I had to do some painting in my IP in Melbourne (I am in Sydney). PM quoted $3400 which I found expensive. At the same time, I decided to put the job on Airtasker. They did the job for $2200. I just think the PM doesn’t shop around, but rather use regulars.
    However, there was another issue at the same property where I potentially needed a handyman. PM simply when over with the screwdriver and fixed the problem for free.
     
  12. Tom Rivera

    Tom Rivera Property Manager Business Member

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    If you don't mind me asking, did you use an experienced and/or qualified painter on Airtasker, and have you inspected the finished product?

    I can't assume anything from your particular situation, but there's a huge difference between a cheap paintjob and a good paintjob.
     
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  13. Shazz@

    [email protected] Well-Known Member

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    No, it was an experienced painting company who also advertise on Air Tasker as well privately. They had excellent reviews.
    The PM inspected the property and was happy. I had a look a few weeks later.
     
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  14. dabbler

    dabbler Well-Known Member

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    Do not suspect it is inflated, you better expect it is and do your own checks, not only that, check that it is needed.

    It happens too me weekly, quotes for things in the 1000's where I know the units are working or PM just takes tenants word for it and what tradie will argue if they are asked to quote on something or replace something.

    It is the norm rather than the exception & if there is a building boom on, expect the quotes to be "go away" type quotes.

    On not long ago was just short of 10k, got my own guy for 700.
     
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  15. charlie01

    charlie01 Well-Known Member

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    Another scenario is that some tradies are not interested in certain jobs so they give PMs ridiculous quotes. In the end of the day, it's the ip owners who get ripped off, not PMs.
     
  16. TMNT

    TMNT Well-Known Member

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    My 2c

    Some pm agreements say the pm gets a cut or a % added on to to the total, ive not come across one but i know many that have

    Also, in country towns, the tradies seem to be fairly reasonable

    Once youve done a few jobs, you ll know if your agency over charges or not
     
  17. Scott No Mates

    Scott No Mates Well-Known Member

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    :D - any good tradie will, they have to cover contingencies

    &

    Price, reliability and consistency are all important

    REA have to pay gst/dont have a slush fund of cash, many subbies don't like it. They can balance it out on other people's jobs.
     
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  18. Kinnon

    Kinnon Well-Known Member

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    In any industry you're going to find people who do great jobs and people who do sub-par jobs. I'm not saying everyone is perfect.

    The main point of my post was the address the OP with our own experience of how we quote and invoice jobs.

    I think @Tom Rivera hit the nail on the head when he mentioned the knowledge of PM's. Some basic knowledge could go a long way. Multiple times we've been sent work orders for basic things where the description is "XXXXX is broken, please replace" get there and just need to tighten a screw.
     
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  19. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    REAs will use consistently reliable honest trades to do work who also have insurance etc and who look presentable and dont look like a dirty hippie with a 1970 kombi as a work vehicle. The dude you find on bumtree or taskflogger can be cheap for a reason - they may not be insured or licensed or "borrow a license" or quote fake details and has not established a reliable business (or is bad at their job !!). Like the backpacker locksmith story in media this week : "If it sounds too cheap it is too cheap": how backpacker locksmiths are scamming Aussies

    The reputable tradie is also reg for GST and is busy and factors real costs into the rate such as quoting, travel and running about for materials. He knows his productive time is say 50% of the day and so has to charge $85 a hour to make a living. And will overquote based on their years of experience knowing half the tenants will say they are home then go out. The backyarder just quotes based on a hourly rate like its a job and thinks $45 a hour is a road to riches. Then does a quick job to get out thinking thats how a profit is made.

    And some tradies just arent interested in the running about with REAS they have their niche and get work from insurance companies, builders etc. Or the local area etc.
     
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  20. S.T

    S.T Well-Known Member

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    My properties in Victoria I used trades from RACV Emergency assist. They've beaten Property Manager quotes every time without them even knowing the price.
     
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