QLD Property Management fee rises seem steep???

That happens all the time, but in reverse.

The amount of times a selling agent does a good job, gets a deal then gets questioned on their agreed commission. "Hi, so we think you did a good job but feel your commission of 2% is far too expensive, we want to re-negotiate". haha

 

Prior to that though, when I had simply asked what notice period I needed to give to change agencies, rather than answering, she wrote a huge and condescending email outlining every fee and justifying it, whilst also arriving at a total weekly increase that was less than half the true increase as she left out the averaged out cost of the inspections. Their service was a bit better than average, but they were already more expensive than their competitors and that's before they put their weekly average fees up by over 33%.

 

Property Management fees are charged on a continuing basis, it's not a single transaction.

A better comparison would be likened to you getting upset because five years ago your sales agent only charged you 2% to sell your house, but this time they're asking for 2.5%.

 

That's fair- I can't comment on whether it was condescending, and if it was delivered with attitude then that's really unfortunate (equally unprofessional).

I more so felt like I could understand an agent doubling down on efforts to retain business if you were expressing an intention to leave. I think it's really silly she decided to do that by email instead of calling (should've called to discuss the fee increases in the first place too), but I understand if you were focusing more on her tone.

 

I have questioned PMs over their much higher than competitor/industry/other states fees and not once have I got a valid reply, a lot of them say their service is better but cannot even specify why that is, its just a line they blurt out hoping you agree,
the worst one was "oh we have to pay for a secretary" , like they are the only agency in the country who hires a secretary!

Vote with your feet, tell them what you think, and leave, no point arguing with them, as I still havent worked out whether they believe their own BS

 

The 2018 year was 2 years ago. No management agreement offers a lifetime fixed fee.
The agreement can be terminated of course. Just make sure that the alternative is worthwhile.

 

Let me have a go?

Queenslands fees are lower than other states because previously (up until a few years ago) they were regulated at a set amount there. When deregulation occurred, most places have kept them the same since. Perth's are a bit higher than other states for the same reason; was regulated there and most kept them at their higher level after deregulation - there's also a higher barrier to entry there meaning less competition than Queensland.

Sydney's are a bit lower simply because rents are higher - eg if an agency needs $X to break even, then that's going to be a higher percentage of Perth's $300 per week vs Sydneys $1000 per week.

Everywhere in Australia though - costs are rising, for all employers in all industries. Commercial leases are higher, employees wages are higher, we need a million different software subscriptions and they all charge whatever they want.

I remember when i first began I did spreadsheets on what i thought were the incomes and expenses applicable at the time. Since then those numbers have changed and I've charged newer clients are different fee level than my original clients. In some agencies they would have increased the original clients as well, whereas i left my original clients on what they were on as a gesture of loyalty / goodwill.

This probably isn't in order, just spitting my mind here. There's also difference between agencies for a few reasons :

• There are some that literally don't care / know if their business makes a profit or not (either because they're not business savvy and not sure what that is, or because they have income from other sources, eg a sales side of the agency or a different industry altogether).

• There are some with different business models - eg prefer to take on less properties at a higher fee or more properties are a lower fee. Some work from home or an office and have those leasing costs and some run multiple staff vs virtual staff and so have different wage levels , these are different costs and therefore need different fee levels to make the profit level they desire.

• Some agencies invest in latest technology / software for their office and latest training for their staff. These things help them do a better job, be more productive, keep clients out of sticky situations, etc but at the same time have a real cost that needs to be factored into the bottom line.

• A cheaper agency isn't guaranteed to be bad and a more expensive agency isn't guaranteed to be good, but you'd have to think that an agency that is properly resourced (eg has the quantity & quality people they need to not be overloaded, the software's they need to be productive, the expertise to efficiently deal with situations) is simply going to have better odds at being able to do the right thing.

• Service does differ between agencies and clients. I've had clients come from a cheap agency where the PM was never getting back to them, inspections weren't getting done, etc, and so us charging more to them was worth it because now stuff actually gets done. It varies between clients as well though, using us an an example we have some that literally rave about us, and I'm sure the clients we've had to fire over the years think we suck

• At the end of the day, agencies are a business, just like a retail shop, lawyers office, car dealership or a lawnmowers route, and as such they have to make sure revenue is great than expenses or they don't eat or pay their own rent.

Yes, there are some crap ones around just like in any industry, but the majority I've dealt with are actively trying to be the best they can and are bringing the industry average up with them. Its mostly people who still see property managers as the young school-dropout chick in the corner of a sales agency rather than the expertise-filled professional that a lot of the current crop are, then of course you're going to see property managers as expensive.

 

appreciate you actually addressing the comment,

you do make some valid points, some of them a bit vague and what ifs,

so down your side of town agency fees are expensive, 9%+ GST if im not mistaken,

My former SA properties the agency charged a flat 9.9% inc gst even for the "expensiver" properties, 2 weeks leasing fee, 1 week releasing fee

ive got/had props in VIC/NSW for example that are sub $200 per week but PM fees as low as 6%+gst without haggling

and as you say, its a free economy!, anyone could start their agency with lower fees

I actually think PM jobs are not easy, you have to be on the ball with legislation, rules, etc I think starting out and learning all the legal stuff as well as practical stuff is the hardest, I would assume once you've got a few years experience and you know the laws/rules like the back of your hand, your job is a hell of a lot easier

 

Write back and say "no I wanted better service ...I am actually paying more to the next manager "

 

Invest in Melbourne and you'll pay 4.4% to 5.5% inc GST for property management (with 2 or more properties). Gold Coast is 6.6% to 7.7% inc GST.

 

Wholly Dooley, I can't believe people actually pay that when there are so many good Agents with less fees and lower rates

 

I'd never pay that BS. No chance in hell.

And inspection fee?? Advertising fee for new letting? They takin the **** now.

Not sure about hervey Bay, but I don't pay any of those nonsense fees for any of my properties in Queensland. The moment they try to introduce them, I'd be gone.

 

Depending on the type of advertising they do, that could be cheap. Personally, advertising a property for me costs in actual out of pocket expenses approximately:
$140 Realestate.com
$66 Domain.com
$22 Realestateview
$180 Professional Photos
=$408

Given my average rent is about $300wk and I only charge the 1.1wk letting fee, I'm well out of pocket for advertising on most properties (less so on more expensive houses and when I can reuse photos). That doesn't even cover the fact that the letting fee is supposed to be a service fee, not reimbursement for marketing costs.

Lucky I don't have brutal overheads, and I'm happy to invest because think the marketing is a really important part of us getting great results, but other agents could definitely justify a different opinion on the subject.

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As for the other fees, I don't necessarily agree with them, and I don't charge any of them (aside from letting of course), but ultimately you need to look at your total cost. Many people take offence to a re-leasing fee, but wouldn't bat an eyelid at paying an equivalent extra on the management fee. It's about perspective.

Of course, in this particular case they've added a bunch of fees AND increased management fee, so I can definitely see OP's perspective on the total cost there- haha!

 

They've only ever advertised it on their own website and have been using the same photos that came from the original agent that would be over five years old at least.

 

Wait... what?

Are you 100% sure it never went up on Realestate.com, Domain or any other similar portals?

 

Yes, I searched for it and it was only on their site. It was only on there for a few days and was rented out again.

 

#moneygrab.

 

@Toon did they send this to you in just email or via a new management contract to be signed?

My current PM sent me a new contract for each property with their new fees a while ago. They listed the changes in email to make it quicker to read through too.

The costs were about 10% more and added fees almost similar to yours. At that point, they hadn't really been all that better than the previous PM company I moved from, so there's no way I was going to pay it.

So, on the new contract, I crossed out all the new changes, and added what was in my current contract. (7% + gst rental fee, crossed out advertising costs, crossed out monthly cost, crossed out inspection fee).
On the second property, I somehow forgot to cross out monthly cost.
And its all been accepted.

So, I'm still paying all the same costs as before, except I'm now paying about $9/mth on one for monthly cost

 

It was via a new contract to be signed, which I haven't. I have switched back to my old PM though, who's cheaper than even the original fees with this one. But that won't take effect for 30 days. There wasn't too much difference really in quality of service.

Good on you for your actions though! I bet this one just goes ahead and charges me the new fees from this week even though I haven't signed

 

Fees are similar to what I was paying in Gladstone, QLD, with the exception of the inspection fee. I think it was about $30.