Property Management Fees Options

I was given three options to choose from to pick as a package. The picture has the difference between the options. Which one would you choose. I am trying to calculate what the difference would be in yearly fees, but not sure how many times they have to attendance a year at VCAT,Our representation at VCAT against our recommendation and handle your insurance claim would be.

 

Option 4 - none of he above.
You can negotiate most of those fees away and get 5% commission as well.

 

Thanks @Propertunity I can give it a try, but only this company can advertise my property and do open for inspection before settlement.

 

Sounds like one of those nicely tied up rental guarantees where the buyer indirectly pays for their own rent via smoke and mirrors built into the property's purchase price.

 

Definitely not. I am free to pick some one else, but they seem to have good reviews online and they are more Property Management biased than Selling agents. They were horrible as selling agents (especially auction campaign). Got a bargain Price (I think)

They were managing the property since 2008 and knows all about the property so they are good pick for me for this property at least. I pretty sure they know this,so its hard for negotiation on the fees.

 

Any company can. We line up successful tenants in time for settlement date all the time.

 

I understand, but i did not negotiate that while buying. Now if I want to advertise from different company, i will have to go through these guys to get permission from vendor. I am not sure they will be willing to cooperate.Out of all options I have,I like these guys to manage my property.

Do you thing those prices are too high?

 

Don't need to.

I'm not sure, i don't choose based on price or recommend anyone else does either.

 

I agree. I have already chosen them, just not sure which price package i should pick.

 

I would do a feasibility comparison. Here’s some estimated numbers you might want to use, but these will vary depending on the area and property. I’ve been quite conservative, with a good property and manager (and some luck) you shouldn’t need to pay these most of these fees anywhere near as often as I’ve indicated;

24m- New tenant every two years.

3m- Tenancy check (we’re thinking up to 8 checks per leasing experience, average 1 per 3 months)

9m- Lease renewal (likely to start on a 6m and move to 12m, split the difference).

12m- EOFY Statement annual.

48m- VCAT (Definitely shouldn’t be a regular occurrence, ESPECIALLY if you’re well insured)

36m- Insurance claim (Please take out a good policy, worth every cent).


The two big numbers are the percentage commission and leasing fee. The rest of the fees are small, infrequent or don’t differ dramatically between the packages.

With a hypothetical rent of $500wk, the difference in management fee between 6.6% and 8.8% is $572 p.a. The difference between leasing fees on the two end packages is $550.00.

I’m not comfortable with the tenancy database check fee… that’s a bit strange. It’s the first thing I do on a potential application for every applicant, much easier to start there then to dig into other references and checks. I don’t know about Victoria but I average around 10+ checks per property per leasing event. They seem to be making more work for themselves. Is it normal to charge for a check in Victoria?

These pricing structures are a little ironic. Realistically, you’re betting with the cheaper package that the agency will get you a great long-term tenant. You’re placing more faith in them by paying them less… though it goes both ways, the lower fees will attract better quality clients who are confident their property will be less work for the Property Manager.

 

Thanks @Tom Rivera Exactly what i was now. What I found more or less they add up to being same. Higher the expected rent 3 rd option is better lower the rent option 1 better.