How much does your PM charge for marketing/advertising?

Discussion in 'Property Management' started by Mel Morgan, 15th Feb, 2019.

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  1. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Just wondering what you're charged in marketing (on top of the re-let fee) when the property manager re-lets your property (if anything)? I guess it depends on what is done, but they'd have to at least have realestate/domain ad & occasionally photography and For Lease sign?
     
  2. TMNT

    TMNT Well-Known Member

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    mine vary from $0 to $150 to $200-$240

    I dont know how the setup with agencies are, but the ones who charge a lot cry black and blue that there is no way they can get around it and charge me their actual cost
     
  3. Propertunity

    Propertunity Well-Known Member

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    It fully depends on what you signed up for in the Managing Agency Agreement. For example, I get a listing in re.com and domain but I don't pay for it because that's what was agreed and signed off on. Same with signs - I don't pay for that either but I still get one.
     
  4. Michael Mitchell

    Michael Mitchell Well-Known Member

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    For Rentals, my Owners don't pay anything for standard advertising on all these websites:

    upload_2019-2-15_18-42-6.png

    Generic agency signboard - no cost also. In some cases, I may recommend they pay for a premium rental listing, which is only a few hundred dollars (far cry from the cost of Sales premium advertising on the same sites).
     
  5. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Its been the same in my experience, either an agency insists they have to charge it, or they don't and the job still gets done. Given the commissions seem to be similar, I guess you gotta appreciate the agents that absorb it into their costs.
     
  6. Tom Rivera

    Tom Rivera Property Manager Business Member

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    There's a big difference in costs depending on the agency. If they're just using standard Ads, no photos and no signboard, there could be no actual cost to them for advertising (aside from the subscription cost, some may seek to amortize that). If they're using premium ads, photography, signboards, etc, the marketing could be quite expensive to them.

    For example with us, the average highlight listing on REA costs about $135 (though Indooroopilly recently cost me $195!!!!), Domain is $66, Realestateview $32 and all the other websites are free. Professional photos are usually about $170 (depending on amount of photos, editing, urgent fee, etc). We save a little on building our own signboards ($400 each...!), instead of paying $100+ each time for companies to do it. Overall, marketing costs roughly $400 per property.

    As far as what's charged back to the client, there's a huge variety in advertising charges. Some are mad enough to include the costs (me... haha!) but some charge a fixed amount that only covers part of their costs, and others charge the full amount.
     
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  7. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    To a point but things like enhanced listings absolutely make a difference so you might get the job done a bit quicker. The cost of a highlight listing can be covered very quickly (a matter of days) in a reduction in vacancy.

    @Tom Rivera highlights a good and broader point. There is often a misconception that PMs actively want to turnover tenants in order to "cash in" on the let fee windfall. This is untrue. If a PM is doing that they don't understand their own business. Letting a property is a loss incurring activity for the agency. Add to the above costs an exit/entry, inspections, processing tenant applications, preparing leases etc.

    Long story short, I don't have an issue as an owner/investor contributing to the advertising cost as long as it can be justified in terms of an improved outcome eg. enhanced listings.

    - Luke
     
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  8. Michael Mitchell

    Michael Mitchell Well-Known Member

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    I almost get the feeling that the majority of franchised agencies (of size) want the churn because it's only loss occurring if it sits vacant for too long - clipping the ticket on new let fees is very lucrative especially on higher priced rentals in conjunction when they've got highly leveraged staff (cheap labour per property), and they push this agenda with the mis-conception to owners that shorter leases are "safer".
     
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  9. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Yeah thats a good point, especially for higher priced listings.
     
  10. XBenX

    XBenX Well-Known Member

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    Just leased a house in Sydney:

    Advertising $380 (standard listing on the portals, generic signboard at the property)

    Plus
    Lease prep $33
    TRA check $5.50
    Letting fee $467.50
    Admin fee $5.50
     
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  11. Tom Rivera

    Tom Rivera Property Manager Business Member

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    I can't see let fees being profitable for a business overall unless they charge a higher fee (e.g. 2wks rent). Even on a higher rent property, assuming minimal advertising costs and a reasonably quick changeover, there's a stupid amount of time that goes into a changeover.

    On the other hand, I do know many business owners see let fees as extra cashflow without considering the effect it has on their staff productivity, so they can encourage the extra income.
     
  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I see thousands of taxpayers returns and IPs annually. Advertising and lease/relet cost varies from $Nil to seemingly extortionate amounts.

    Literally I see some charged nil to advertise and a $55 fee for a new lease to others who charge like they are selling the property. A month of two of rent !! and very expensive ads on top.

    Typically however a disbursement for a few weeks local ads (150-$200max) and in some cases a local board for another $200 (its a simple sign). A fee for reletting that is approx 1-2 weeks rent is fairly typical.

    I guess it also depends where and the property use eg a resi house v's a nice large exec apartment in the city
     
  13. Andrew Allen

    Andrew Allen Well-Known Member Business Member

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    We charge 1.1wks let fee for new tenancies only and no extra marketing fees, having to re-let a property is definitely a loss making venture for our management business as there is considerable time involved (entry and exit reports,leasing inspections, bond management, chasing previous tenants and contractors, online advertising is expensive!), the economics aren't good, much better to keep a tenant in the property if possible.

    I would love to see average tenancy lengths increase in this country, we seem to be a nation that likes moving around in rental properties however.
     
  14. D.T.

    D.T. Specialist Property Manager Business Member

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    Why make a loss when you can make a profit?
     
  15. Michael Mitchell

    Michael Mitchell Well-Known Member

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    This..
     
  16. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    Can you elaborate on this a bit?

    Cheers,

    - Luke
     
  17. Andrew Allen

    Andrew Allen Well-Known Member Business Member

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    Just concerning income from let fees not matching the expenses to let a property. I think it's likely a better idea for a business owner to charge more than 1wk or pass on individual costs of marketing, especially as the advertising costs keep increasing, all depends on things like your average rent, av length of tenancy and your management fee rate also.
     
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