PM fee if I take over paying the bills

I am considering taking over paying the IP expenses on a credit card to get points. I don't mind the work..sort of like the hands on...
Cam anyone tell me if I can negotiate a lower PM fee...since I would be taking the work off them!
Ros

 

Hi @Wanttoretire

This is an extremely small component of the PM's role. I can't see anyone discounting their management fee. Quite the opposite... if you are paying tradies that are ordered by the PM but paid for directly by you, the PM will have the inconvenience of chasing you to check the payment has been made.

 

I doubt a PM is going to let you pick and choose what parts of their job you want them to do

 

We always paid our IP bills - rates, insurance, BC etc.

But any repairs organised by the PM were paid by them out of the rent. As they authorised the repairs they would be liable for payment so I can't see them letting the owner pay.
Marg

 

Indeed @Marg4000 you are right. With that said, if there is a large tradie invoice, the PM will likely ask the landlord to pay it direct, or the poor tradie has to wait months for enough rent to come in to cover their invoice.

 

No.

Or ask the landlord to contribute to the trust account so that it can be paid sooner.

 

@D.T. indeed. Or that. I've used both methods myself for such situations . If a tradie doesn't take creditcard there'll be no frequent flyer points anyway, so I'm not bothered about the method used to make payment.

 

There is an interesting point raised here and a slight, but common, misconception.

The contract for the work is c/o the agent, not for them. This means that if any trades are ordered by the agent and the owner has stated they are going to pay them direct, the agent isn't then responsible for chasing payment for the trade. The agreement for works completed is still (and always is) between the landlord and the trade, not the trade and the agent. The trade should be doing his own debt recovery direct with the landlord if for any reason the landlord doesn't pay.

In the event the works were ordered by the agent, the landlord is still responsible for payment in all cases. Most of us just have the agent make payments for us, but we are still ultimately responsible for those payments. Works are never authorised by the agent - they are ordered based on either a pre-authorisation (via the amount specified in the management agreement), or if over that amount the landlord is contacted for authorisation.

We as agents are responsible for making payments at the direction of the landlord. If the landlord has said they will pay it themselves and then doesn't, we can let the landlord know the trade is chasing them, but that's about it unless the instruction changes. This is why we have management agreements stating payment methods for bills and all instructions from the landlord to the agent should always be made in writing, even if following a phone conversation.

@D.T. has already stated it but the best way to do it is to make an owner contribution to the agent trust account if there is not enough funds from rent to cover an extraordinary invoice. This will ensure it still appears on your EOFY statement and keep records tidy.

At the end of the day, the important thing to remember as an investor is that you have employed a company to act on your behalf, via the management agreement, and complete certain actions for you, whether pre-authorised or not. It's important for all investors to realise that they are still ultimately responsible for all payments so make sure you check rates, insurance and any other bills that are due to come out of rent. If something is missed, it will come back on the investor, who in turn would then chase the agent for breach of contract...as with any contract!

 

I've been thinking about doing this as well - the number of IPs/bills we have would pay for return flights to Europe for at least two people.

Is there a (safe) way to pay for council rates, water rates etc via my credit card but have them appear in our rental statement/summary at end of yr?

 

Doubtful. The annual rental summary only includes money in and out of the RE account.

There won’t be many transactions, just keep your own records.

 

Arrgh ok. I did a count - how many transactions really depends upon how many IPs one has. There were enough transactions to make it a pain (record keeping wise).

And of course I would insist on a slightly lower PM management rate if I was paying the bills. I'm sure they won't see it that way.

 

a taxpayer could also be borrowing to pay their investment expenses and potentially claiming the interest, helping them pay off non-deductible debt sooner, help get points and help save interest (as credit card interest free period used and timing payment on the last day)

 

The thread seems to be going off-course.

The OP asked if they could get a PM discount by paying accounts directly themselves. The simple answer is no.

However, there is no reason the LL cannot pay whatever bills, rate accounts etc they like to get points.

 

I would have thought the answer would be 'maybe'

 

I've had one agent do it for me in the past, worked like this.
I received bill, pay it myself on CC, (checkout beemit for when theres a surcharge for CC, lets you use bpay from a CC but still collects point, some CC dont get points for BPAY transaction)
I then sent the rates notice/water bill etc to the agent, and told her to "reimburse me" for this,
she then set me up in her system, similar to a trades person I suppose, so "I" was paid for the bill, and then I was paid again with whatever rent is left over, same net effect of funds coming to me, except it puts a line item of the invoice on the end of year statement.

is it more work for the agent, yeh, probably is. but worth asking them if it is something they will do for you if you like having everything on the end of year statement, and not having to add your own items later.

any PM's here in the chat do something similar? wondering how common this arrangement is

 

It doesn't make any sense to me. Do you get the agent to collect your drycleaning too?

 

Whereabouts is your property?

 

Haha yeah will take the monthly rental statement thanks... don't want the annual!