Is this too much for a Brissy PM?

The PM I am considering for my recent Brisbane purchase definitely offers a quality service from everything I can tell, but some of the fees seem excessive. I have searched through the threads and I can see that 8.8% is fairly average in Brisbane, so I'm not too worried about that. But they also have the following charges:

Letting: 165% of 1 week rent
Monthly admin: $7.70
Marketing/Advertising: $250
Lease renegotiation: $99
Routine inspect: Free up to 3yrs
Non scheduled attendance: $99

Insurance claims: $99 + costs
Abandoned goods: $99 + costs
Bill paying service: $250 per annum
File handover fee: $165
Change of shared tenancy: $99 (recovered from tenant)
Mediation/tribunal: $99ph + costs
Renovation coordination: $99ph + costs

It seems to me that a lot of these fees would normally be included in either the mgmt fee or re-let fee at other places. I assume there will be room to negotiate. But keeping in mind it's a quality PM, do you think any of these fees should make it a deal breaker if they won't negotiate?

 

I'd tell them to go to buggery on principle...What do they think the 8.8% is for? Collecting the rent!

 

I should also mention they also have a fixed option that replaces most of the above fees with a flat mgmt fee of 14%, but still.

 

who are these guys?

 

Way too much

 

If your paying 8.8 I would not expect all those extras or high priced extras

let fee is usually weeks rent + GST

 

^ ^ this. 8.8% should include everything.

 

How are you defining a "quality PM" that would justify paying such high fees?

14% is outrageous.

Even DHA only charges around 15% but that includes all repairs and maintenance, and reprinting and recarpeting at the end of the lease.

Phone a few local RE agents, make an appointment and interview their PMs to get comparison quotes.
Marg

 

That's a bit on the high side ,plus they don't say the costs for the yearly test on all the smoke alarms Just ring around in Brisbane ..Myself we have just started using a PM after a very long time self management and it's around 8%,and the strange item was once the adds went up on the internet,all these others real estate rentals companies starting sending me letters emails about their costs and how useless the company we now use was,dog eat dog business model..Why be a property investors when you can make that sort of return from rental rolls..

 

It's outrageous! I know quality PM is very important, but unless their PMs all have MBAs and are getting paid 6 figures then I'd be loathe to even negotiate that.

Sounds like an internal referral from a purchasing structure (?) as they usually try and get away with exhorbitant fee structures that are very complex. Ours is extremely simple for that exact reason.

 

Im curious too.
Thise prices are exorbitant.

 

Thanks everyone for these responses which confirm my own feelings! The agency is a division of the buyer's agent I used. The buyer's agent was very good and runs a great business. I know the property manager is also very good. In saying that, l know there are other quality PMs out there that charge a lot less, as these forums show.

Update: I have just spoken to the PM and she has said there is lots of room to negotiate on the fees. I'm not sure if I'll be able to get them to remove all those additional fees but I'll give it a try and let you know how it goes. I won't sign up unless I can get rid of most them.

 

By the way, are there 'any' additional fees on the list I provided in my first post that are reasonable/standard even with 8.8 mgmt fee? Or should they all be gone?

 

I think a better way of thinking of it is to look at the overall cost then decide if that's worth it for you based on what they can do for you and how good they are.

The way you don't get hung up on the labels. Eg $10 butt scratching fee vs $20 gold service fee.

 

Fees do not equal good quality and vice versa but in saying that being in the industry over 15 years those fees seems to be taking advantage of the client.

Obviously go with your gut instinct

 

I reckon the BA gets a cut out of it too.
Don't sign anything before you look elsewhere too.

 

Both the property management division and the buyer's agency are part of the same company. The BA owns it all. There was never any pressure to join the PM side though. I asked about joining as I wanted to stay with the company, so they sent me their fee schedule and we are now negotiating.

 

I think the relationship is starting the wrong way.

I would not even like 8.8 in a capital city, but if I did decide to say yes, I would have them in line with others charges, but, I would be thinking they are going to try and find other ways to hit me up.

You would expect to compensate for attending Tribunal, but not a hundred bucks an hour.

 

Agreed. These sorts of things should be cost recovery, not making profit.

 

So you only have properties in Sydney? All the other state capitals are higher.