Join Australia's most dynamic and respected property investment community

Purchased First IP, need help with Agency Agreement

Discussion in 'Property Management' started by Sharky, 10th Feb, 2017.

  1. Sharky

    Sharky Active Member

    Joined:
    20th Jan, 2017
    Posts:
    28
    Location:
    NSW
    Hi PC,

    I recently joined PC to learn more about investing in property. During this short time I managed to purchase an IP with a potential to build a Granny Flat, based in Sydney.

    It's my first time so bare with me.

    The agent whom I purchased the property from has handed me a Management Agreement.

    I am not too familiar with it but slowly reading through it, and the fee's seem excessive. (I have a few friends who shared their agreements with me as a guide). The agent does seem like a genuine guy, so I decided to give him a go.

    But just to run it by PC:

    Some points:
    5.5% (doesn't state GST or no GST, will clarify)
    Termination: 90 days (I've seen in forums, this is quite excess)
    Expenses: $500 (I'm definitely aiming for $0, and to be notified on all problems)
    EOFY statements: $20.

    Curious what the difference between Management fee and Administration fee?


    This is my first properly, so I apologize in advance if I sound a bit nit picky, I understand they do need to make money, but they do know about my lack of knowledge in property, so I do not want to get be taken advantage of.

    Always happy to compromise.


    -Sharky
     
    Perthguy likes this.
  2. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    7,819
    Location:
    Perth
    I don't think it is a very good idea for the agency that sold you the property to manage the rental of the property.

    Can you ask around and see if you can find a good property manager?

    I don't really know who is in Sydney. @Gockie, @sash, @See Change, @Inov8ive, @Leo2413? Does anyone know a good property manager or do you know who might know one?
     
    KayTea likes this.
  3. Sharky

    Sharky Active Member

    Joined:
    20th Jan, 2017
    Posts:
    28
    Location:
    NSW
    Thank you for your prompt reply. Is there any reason for this ?
     
  4. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,701
    Location:
    Sid en e - olympic city
    5.5 is ok

    The rest you just tell them what you want.

    I have no problem with the selling agent getting the management if they seem like they will do a decent job, but the selling agent should be passing you to the PM, so you can see what they are like.
     
  5. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    7,819
    Location:
    Perth
    Yes. An agency that focuses on sales usually does a terrible job at managing properties in my experience. I could be wrong about yours but what indications do you have that they will manage your property well?
     
    MyPropertyPro likes this.
  6. Sharky

    Sharky Active Member

    Joined:
    20th Jan, 2017
    Posts:
    28
    Location:
    NSW
    Honestly, he is probably the only REA that I've dealt with.

    As I mentioned, he seemed genuine. He did ask a few times before and after I paid the deposit. To have him as the managing agent. Not sure if that's alarm bells.
     
  7. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,486
    Location:
    Sydney
    Sydney's a big place . We only have one IP left in manly .

    Cliff
     
  8. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,701
    Location:
    Sid en e - olympic city
    No, they will often want the PM side, if they don't ask maybe they are lazy or know the place is trouble.

    But you need to speak with the PM and staff, not the selling agent.
     
    Perthguy likes this.
  9. Ricky Adelaide

    Ricky Adelaide PM Playford Elizabeth-Munno Para (SA) Business Member

    Joined:
    3rd Aug, 2015
    Posts:
    74
    Location:
    Munno Para South Australia
    All people working in Real Estate are great at sales (even the property managers too!), you honestly will not know the right agent is looking after your property unless you have a great recommendation from someone you trust, who has experience with a few agencies or the agency has some kind of guarantee that means if things are not as they promised you can move on.

    First thing I would suggest is do your research and see not just what your short list people tell you about their agency but also mystery shop their opens for vacant properties and see if their FB, Google or other reviews say. Plus see if they will spend quality time with you and make your life easier as you know you may what additional support being a newer investor. This is offen the best effort they will give you and will probably speak to what you can expect as a best case in the future in many cases.
     
    Last edited: 21st Feb, 2017
    MyPropertyPro and Perthguy like this.