Flat Fee Property Management

Hi All, recently came across onceme.com.au - flat fee property management. Any experiences or thoughts regarding flat fee management?

Cheers

 

I love it and will always go that way given the opportunity.

 

Based on your experience with onceme?

 

I'm not sure what you mean? I just love the transparency of a flat fee. No surprises.

 

ah sorry. i read it as you have used them and flat fee is good.

 

I've had properties managed on a flat fee basis before and it's a two edged sword. Yes, the amount is transparent but obviously then the fee in relation to inflation is decreasing over time which tightens the margins of the provider and the service starts to suffer in a number of ways. I can think of one fairly prominent agency where this has happened and we have first hand accounts of ex-staff that describe the inner workings of the agency as nothing short of scary. Staff not being paid their entitlements, over worked property managers as there is more demand for them to increase the number of properties they manage, costs cut in areas that have on flow service ramifications and generally an imploding service provision as margins decrease while the number of properties increases.

With a flat fee, you're either paying too much relative to your rent (if the flat fee is high) or over time, not enough to keep the business margins healthy enough to uphold the service of the provider. Some may say this is not the landlord's problem, but they are reality economics. It's no different to flying a low cost carrier - they cram more people in to make up the lost yield from the lower fares and the subsequent service is not as good. In a landlord's case, this can translate into an under performing asset, not whether you get a free drink or not.

A percentage can still be no surprises - you just have to make sure the fee structure is still simple through negotiation. Of course, your agent shouldn't be charging for disbursements, statements and all those other little nasties that PMs seem to include to boost their revenue. A percentage and a letting fee is all it should be with any other premium options just that - optional.

- Andrew