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

I agree completely.

But the quotes I get myself are also from reputable tradespeople. And every single time they are considerably cheaper. I would never use some dodgy dude just because he is cheap. I don't get my quotes off airtasker or anything similar to that.

In the example I gave, I did end up using the original company who quoted via the PM, but I rang them and told them about the other quotes. They immediately dropped their price to match without question. The quote they had given me was itemised. I also checked the prices of the itemised parts - every single one of them was at least 20% more expensive that what I could buy myself at retail price. They had even written on the quote that they were giving me a discount on those very items.

 

There's 3 parts to this in my view :

A) First is the PM's knowledge, ie thinking about how things work or knowing to clarify issues. Having done a few of our own renovations has helped with this too. Eg had one just yesterday where a new tenant moved in and said the powerpoint for the washing machine in the laundry doesn't work please send an electrician. We asked her to try running an extension cord to a different room in the house first, still didn't work - conclusion the washing machine got damaged in the relocation truck.

B) The second is finding reliable trades. If you're getting a once off job done for your own home then yeah you're probably going to get someone on air tasker or gumtree who can do a fairly cheap job, or do it yourself or whatever. However, getting a reputable person or company who...

1) has either enough staff or enough capacity to get out to a volume of properties within the legal time frames,
2) knows how to deal with tenants,
3) has the appropriate insurances and licenses,
4) accepts our payment terms,
5) will back us (and our client) up if tenant complains about something,
6) does a decent job,
7) will offer our agency a decent rate in exchange for volume of work
8) Communicates properly if unable to do the job, or finds additional time is needed on the job

... is going to be fairly few and far between, and therefore they can and do charge a decent rate. I don't think that's unreasonable - especially when you factor in non-invoicing time eg their travel, quoting, invoicing, etc. Ones that have been unreasonable have been promptly replaced.

C) The third is landlord expectations. Seems not all are aware they're legally obliged to repair things in their homes. Sometimes its something they wouldn't in their own house (you should see the long list of repairs required at my place! ) but tenants don't have to put up with that. ESPECIALLY if its something that's leading to or causing personal injury or property theft.

As a final note, I'd be very careful with an agency who has their own internal maintenance company or 'sister-company' because the lines will get blurred between their duty to their landlords and their company making revenue.

 

I agree completely.

I don't get quotes off gumtree etc. I only ever use reputable tradespeople. I always get necessary repairs done very quickly. I know my legal obligations and want to keep my property in good condition and keep my tenants happy so they will stay (when they are good tenants). None of these things are the issue in my case. The only issue is that the PMs quotes are always quite a bit higher than the quotes I get from reputable tradespeople myself. That $700 difference I mentioned was approx 30% of the total cost - that is a big difference.

 

I'm pretty sure they don't think of me as a PITA. My PM tells me that I'm an excellent LL, and the regular tradies I use for my PPOR tell me I'm one of their favourite clients. I had a quick meeting with my accountant a few months ago and she refused to charge me because she said I was too nice.

 

You are, your lovely !

Can you please PM me your postal address for that invoice I need too send, Ta !

 

What I don't get is economy of scale, and recurrence of future work.

A USP for a PM should be the trades that they have on their books, but constantly the landlords are getting shafted.

I would imagine that a PM would be contracting lots of work out to every trade weekly. Whilst there might be some 'out of the norm' jobs, they should have heaps of regular work for:
- locksmiths
- sparkys
- plumbers
- general handy man type stuff etc

If I am able to get a better quote for any of the above trades, from a suitably qualified trade (so lets rule out the rouges on Airtasker/Etc) - Then WTF is my PM doing?

The tradie should be wrapt that every week, they have 5 new lock smith jobs from the same PM. I would expect that the tradie would give a better price (hey it's heaps cheaper to keep a client than find a new one).

A good PM should include as part of their spiel, one of the best reasons for using a PM is that if anything goes wrong, we have the best trades, at the best prices to make sure that everything is back in action.

Not for one minute do I think that someone who is, honest, reliable and fixes the problem can charge a premium just on the basis on those traits.

They are surely offset by the fact that the PM has 100's of homes in the local area and they pay on time with virtually guaranteed funds (bills get taken out of rent).

A PM worth their weight in gold will troubleshoot the problem first, find the right trade for the right price and ensure the job is done to standard.

A crap PM will just think 'Oh well, it's not my money.....'

 

@JetstreamVic - lots to address in your post.

An agency is just one of many clients the contractor has, so irregular work is the norm. There is little economies of scale for the contractor as they must attend each location and invoice each site separately.

A client's IP is only one of many properties that the agency manages.

PMs (as many people complain) are either looking after too many properties, overworked or incompent (this may be true too).

I can't recall a module in the real estate agent's representative certificate of attainment (the minimum requirement to work in the industry and held by most PMs) which touches on maintenance, problem identification, tendering, tender evaluation, achieving value for money, contract management, inspection of completed works etc. They're not maintenance experts or facilities managers but property managers. Some agencies do have experts on staff but you pay for it as a separate item/service - this person has the skill set, was a tradie etc and only looks after maintenance not property management. This charge is often as much or more than the cost of some minor works than if it were arranged by the PM.

There's usually a panel of contractors who have previously worked for the agency, have been vetted, are on the accounts system etc. How often is this reviewed by the PM/Agency? Where the property is located may also be a factor.

The PM & agency's KPIs are vastly different from yours. They look at issue resolution across the portfolio not on individual properties or ad-hoc repairs.

The PM may get the fault report 2nd hand (from receptionist) sad reported by a tenant (who knows something isn't working or has broken but can't provide proper descriptions eg. the power has gone out/the stove or hws isn't working etc). Diagnosis may be non-existent just contact a panel contractor who can do the perceived job. That mightn't be the solution some owners want but meets their KPIs (issue has been addressed in a timely fashion).

 

Every capable PM would have a core of tradesmen, a plumber, electrician & 2 handymen. Each of these tradies would have been vetted [licences/insurance] and have proved their worth by doing at least a couple of jobs before going on the PM’s preferred list.

The tradies valued their relationship with that PM and liked the continuing work that was being given, substandard work would soon be discovered by the PM resulting in them losing their continuing income.

PM’s are also governed by a clause in the lease which states how much money can be spent on maintenance before notifying the owner of the problem and giving the owner a chance of obtaining quotes and employing another tradie which he personally has confidence.

Every owner has the choice of how maintenance is carried out,

1. Leaving it in the PM’s hands with a limit on money spent.

2. PM is to contact you before any money is spent.

 

@Scott No Mates how can there not be economies of scale?

Let’s take a simple one, the guy that checks the smoke detectors. I’m not sure how many properties a PM would have on their books, but let’s call it 500.

Yes, each place is different, and most likely unique owners. But how easy for the contractor to be able to get work on a platter every week from that PM? All they have to do is not stuff it up, and I would expect that my PM should be able to get a price cheaper than I could - simply for the fact they can direct so much work towards to sub contractor.

It’s simple economics.

As much as Kinnon has some PITA tax added, a sensible contractor will take a small hit per job, to make sure the jobs keep coming.

It’s not a module, it’s common sense. D.T provided a good example of how his common sense was able to troubleshoot a problem.

PMs with those sort of skills will keep their clients happy.

Someone who ‘just knows the modules’ might as well be just answering the phone

 

Yup, glorified receptionists i call them

 

It’s already been mentioned, but as a PM, I have owners that use their own trades on occasion- not an issue, some will be able to get mates rates from their aunties, brothers, daughters boyfriend who is a plumber for example so great for them.

What I have seen on a number of occasions is owners go to gumtree or airtasker because someone offered to do the job much cheaper than originally quoted. Again, not too bad if you’re local and you can check them out- but I had one Sydney landlord organise landscaping, and ended up paying up front (against advice / parts of the reason the trade could do it cheap apparently because he didn’t carry costs) and of course, ended up with half a job...

Risks owners take sourcing unknowns from the net is not just being ripped off, or a crappy job, but the owners I have who do this, they don’t check insurance of the trade, police checks, qualifications... the landscaper mentioned above jumped the fence, scared the poop out of the tenant because he didn’t call or even knock on the door.

I haven’t had anything worse happen but as a pm, the scary part for me is what happens if that tenant had clubbed that trade who was trespassing? What if things get stolen from the house- owner employed the trade, what if the trade bursts a pipe and floods the house? Sorry owner, your trade isn’t insured, good luck with that!

Anyway, we troubleshoot first- there aren’t many things a good pm can’t reset, screw in, relight, adjust... failing all that, we need reliable trades who will go out and get the job done well, without exaggerating the problem. We have 2 or 3 of every trade and, regularly get the trades to quote against one another even if the owner has given the go ahead to ensure they get the best price / product. Keeps them honest as well.

 

@D.T. I am not sure what your problem is? Both you and @Michelle Evans have been able to provide details about how you have been able to troubleshoot over the phone, in Michelle's case she even highlight's how she can perform all sorts of minor resets to get things back rolling.

What Michelle has also confirmed is that she has a team of 2-3 of every trade. I would expect that they are all licenced, have proven to be reliable and complete the job in a timely and professional manner. In return, they have the luxury of getting lots of job offerings thrown their way - It is a win/win for everyone.

Despite you taking my comments out of context, In Victoria, the agents rep course is a 5 day course, so yes. If there is a PM that does not take the extra step, like Michelle does and just 'know the rules' and are happy to spend my money. Then they probably should be a 'glorified receptionist'

As a 'specialist property manger', I am surprised that you are not listening to this feedback.

Perhaps the members here are more invested in their investments (pardon the pun), and therefore scrutinise the work of the PM a bit more thoroughly than a hands-off investor.

The overwhelming feedback in this topic is that investors become frustrated when they call up a suitably qualified trade and are able to get a better price then the PM, who has a regular team - why does this occur?

 

Huh? None

No i didnt, i agreed with you.

 

@D.T. Apologies, my bad. I thought you were being sarcastic.
But yeah, you’re right. That’s about the sum of their worth

 

So maybe update your post accordingly

 

Para 1, tenant is subject too same laws as all of us.

Para 2, well you may be surprised to hear, that these PMs are the exception, not the norm, even the half decent ones would send plumbers to re light pilots until you tread on their toes about it.

 

I used to be surprised... I fell into business development because when I joined an agency in Ponint cook years ago now, I used to list business simply by returning phone calls... no one else seemed to be doing it back then. Times have changed now with full time bdms smashing the phones to get listings- but not much point when the average agents still don’t get back to you in a timely fashion, if at all....

 

Well, Syd is well and truly past the boom, and it must be quite in some Bris pockets, because I am getting call backs now from 15 and 16 opens, I cannot believe these people think I would deal with them, as none answered my emails or calls at the time, well, TBH, none except one, out of hundreds of opens, no doubt they will continue.

No good hiring all the phone staff now and not building a solid business during all periods.

Lots still are poor communicators in sales and of course rentals, but I understand the later can be very busy and it suits me not to get frivolous calls all the time anyways, but often key important things are not discussed or communicated effectively is more the rule than exception.

 

It sounds reasonable, but - if your not dealing with these issues regularly - how do you know if the quote your PM give you is reasonable?

 

How do you know the work is required, this is the biggest issue & one many will prob not comprehend, which is ok if if it is a few hundred here and there, but if I said yes to everything one one property last year, it would have been 15k plus, I brought it back to bit over 3k, and that is one place, so do the math if your wanting to build wealth.
You basically need to become a PM yourself and a maintenance manager, but for no fee and pay others fees to do often half ass job.
BTW the 15+k was not the worst one I dealt with last financial year...most will be 1-3k saving by managing properly and being hands on, or prob more like 2-5k saved.