Lease renewal fee

Given there's more states where the fee is commonplace than states where its not I think you're over reacting a tad. Not sure why

I doubt it. If average rent in Perth is 15k a year they're making 1500 a year. Overheads are about 1000 a year and staff about 500 a year. Oh and still need to take GST and Perth's crappy vacancy rate out of that.

Businesses exist to make a profit. They're either making money in other avenues or won't be around much longer.

 

I think it is a rip off.

The thread is about renewal fee of 400 bucks for an existing tenant. Not a new one.

A business cannot justify this amount for a phone call or two and some forms and maybe a minute or so when tenant comes in or whatever.

 

We have paid $66, $88 and our latest agency doesn't charge but the % management fee is higher.

 

Renewal fees are a scam by property managers.

It's not hard to re-sign some paperwork, maybe say, when doing an inspection?

I see a lot of PM's bleeding about how tough it is, they all seem to forget the cream they take when tenants pay on time.

FWIW one rental I have in NW suburbs of vic has the following structure.

5.5% com
0 re-sign fee
0 annual statement
0 monthly statements (have portal access)
Only have to pay VCAT fees (if required), and a fair (1 week + GST) on a BRAND NEW agreement.

And a brilliant PM!!

Now some may say, cheap does not always mean good, however, just because you pay thru the teeth, doesn't mean you aren't getting rolled

 

I've said this before and I'll say again. (my apologies if I sound like a whinge)

High Lease renewal fees are complete bull

And yes as others said it seems to be limited to certain states. I'm happy to pay $30 to $50

I've questioned every agent who has it and every time their excuses are ludicrous

If there is a genuine reason to having to charge it when others don't I'm happy to pay.

Many forumites will say, your free to change. But it seems everyone in the area does and they refuse to budge. Some also say it's a free market which it is.
I'm surprised no new player has come in and started a trend.

For the record my one is
Mgmt fee of 8.8‰ 2 weeks letting fee, 1 week relenting fee and that's with negotiated multiple properties

Excuses I've heard are
- we have expenses
- it takes time to sign a lease
- we have to send out letters to the tenant prior
- we have to explain to them the contents of the lease
- we have to cross our T's and dot our i's

Absolutely ludicrous

 

A handyman and a dentist both use a drill in their profession and one charges more than the other, why? Expertise has a value.

I think monthly admin fees, routine inspection fees and annual statement fees are absolutely ludicrous. I don't really see these as being earnt. I do however honestly believe in renewal fee because our expertise is used as being a negotiator, meat in the sandwich, between rent values, durations, etc. Get it wrong and you'll be up for vacancy time and letting fee, which costs much more.

Instead of picking on renewal fee, you should first be looking at the aforementioned fees. Or at agencies that have a built in maintenance company that unethically extorts everyone.

 

Look to be honest. I think statement fees are a bit silly. But it's only a few dollars. I don't really mind them. Many lifetimes ago they had to be printed and posted where a stamp costed 50c.

I Dont mind annual statements as long as its optional.

I remember one particular agency that emailed me a few years ago with a "we have recently updated our systems and you now have the option to end of year statements for a cost of $35"


So I emailed the agent and said I don't want it. To which I got a reply, " unfortunately our systems won't allow us to not send you out the reports"
I got pretty annoyed but got over it

 

Only difference is that when we talk about property management, I can upskil my 'expertise' by jumping on real estate.com for 5 mins and look at compatibles.

I dont think I'll be Building an extra room/completing a root canal after watching a 5 min clip on YouTube.

 

I'm sure you didn't mean anything by it, but that statement is extremely insulting to those of us who have spent years in the industry working to become experts in our field.

 

Tom,

Insulting or not, is not really my concern tbh.

You are on a property forum where you (PMs in general) are a tool to help us (the investors).

Your business(like all businesses), revolves around showing value.

This is a topic about lease renewal fees. Not one (including yourself) has been able to show where the value of that comes from. Aside from to say that you are able to tell us the current rent for that property.

I have explained that I believe it is a rort, that I would never pay for it AND that I can educate myself on it from real estate.com rather quickly and simply.

While we are on the topic about hurt feelings, I didn't see you jumping to the defense of all the poor builders who were made to look 'lesser' by the type of drill they use, compared to a dentist.

I guess one thing can be agreed upon, builder or dentist - you need a formal qualification.

Right guys?

 

I must of missed that one. But my Beemer is newer than that of my dentist. (and my bit is bigger too!)

 

lol.....I think there is a difference in barrier to entry.....anyone can be a handyman, anyone can work in a PM office, not everyone can be a dentist both academically and practically, so that is a terrible counter.

Frankly, you take every PM comment pretty much on the chin, it was not meant for you, but let's just say it was for a second, and your in the top ten PMs in the country for example, your are *still* ripping me off if you try and justify 400 bucks to renew lease with existing tenant, it is simply not defensible IMO.

It would be bye bye & another myth is the fees you pay, more = better, in fact I am and have experienced exact opposite, a business needs to look internally if they cannot compete rather than thinking they can just slug clients however they wish, assuming they want to stay in business or grow.

 

That's what gummints so and the sheep still vote them in every 3-4 years.

Everyone in an agency needs a certificate of registration. They ceased handing out licences with corn flakes packs years ago.

What's stopping an agent giving the tenants notice just to claim a renewal fee?

 

Yep, there's an agency on the same road as me who doesn't charge a renewal fee, just kicks tenants out so she can earn letting fee again.

 

I see clients across the country and lease fee varies between something the tenant pays something towards through to $21 and as ahigh as $1400. And thats just in the last few weeks,

Its a rort IMO. I have no idea of the effort I willadmit. Whether its a A4 page or its a 4 hrs process I'm unsure

 

Look in Coco Pops SNM & I think ripping the tenant like that would be just as bad.

 

The landlord should be taking charge in this case. If the property is being taken care of and the rent is on time then why are the tenants being kicked out? Managing the manager is as important as the PM themselves in my experience and I've been on both sides of the fence for a while.

This statement definitely has merit - my profession and that of a bus driver is essentially the same but the reality is a little different. Obviously I'm a big advocate for PM, but it's also fact that becoming a PM doesn't take very long at all, literally a matter of days for basic qualifications and many are completely useless, which is where the general distrust comes from among investors. As with anything, there are vastly different levels of service, experience and expertise in PM and I think the PMs that post on this forum aren't reflective (in a good way) of what's on offer generally.

 

I must have missed the Public Notice in the paper.

Very true, however a good PM should also have had training/completed modules on Trust Accounting - you'd want them to be able to read what has been received (credited to the right account ie yours), the charges & fees that have been applied and any expenses paid or held, learned how to use the office's property management software (JD edwards, SAP, MRI, Propertypro, Console etc), gained an understanding of marketing, drafting advertising/effective copywriting, photography (& Photoshop to crop out any unwanted power transmission lines/railway/nuclear waste depot), empathy, negotiation skills, phone/email etiquette/letter writing skills etc.

Sure, most larger offices have in-house bookkeepers & trust accountants, lease administrators, specialist lease negotiators, facilities managers and several layers of pms but you pay for what you get at the end of the day.

 

Only the full RE licence has this component and even then it is very basic. You only need this to run an agency but many PMs just obtain a Certificate of Registration which is a 3 day course with the bare minimum....then in theory they're out managing millions of dollars worth of assets...

 

If I asked my skilled solicitor, they would prob charge 150 for the work involved.

There is no ingoing, outgoing etc, all details already on System, juniors can tend to it or office staff, hardest part may be calling tenant, if they are trying to avoid PM, and of course you call first before prepping the doc to be signed....

Much more involved in a blue slip and they are about 60 bucks and highly regulated & require licensed, approved persons to inspect and fill forms etc. Most of them would have done a 4 yr apprenticeship to be in the position to earn a portion of that blue slip charge,