Statement & Administration Fees

Greetings friends,

Hope you all had a great weekend.

Just inquiring as to what we all think about charging statement and administrations fees.

I know some may think it is inane but I am currently in the process of restructuring our agency's fees and schedule and cannot deiced whether it is plausible to be charging either one or the other.

To be honest don't even understand how there is a difference if there even is one. But I have seen multiple agencies charge for both and currently our agency only charges for the statement fee.

I figure because its electronic, what justifies the price.

Anyway looking forward to all your responses.

Thank you in advance

 

I think its a way to justify charging additional fees which are generally not directly incurred. I remember a decade ago being charged for 'postage and petties', which has now been renamed.

I guess it makes the management % look lower to unsuspecting investors, esp if there's also a EOFY statement fee, lease prep fee, database check fee, inspection fee etc but really I find it sneaky and unfair from an investor POV.

Personally as a property manager I only charge a management %, reletting fee and subsidised advertising fee (which I'm working on removing). Makes things much simpler from a business administration side too.

 

Yeah, I don't do statement fees either.

Statements are now a click of a button 99.99% of people don't worry about getting them posted, you can regenerate them at any stage, so admin cost of doing this very low. I think it's outdated and just a way of getting a small amount of extra cash - and I mean it does add up, even on 100 properties it's $5k a year give or take.

 

I need to rename this to something more "with the times" but $5.50 per month per a property



It would be easier to simply have a % mgmt. fee but clients shop around on % and as mentioned above, they're not realising a low % may mean other costs elsewhere and doing proper comparisons

 

I don't - I have a spreadsheet I've created and put in all the little fees and extras to compare multiple agencies.

 

These are old school fees which today's property management softwares do out of the box without the need to do much. Just remember that anything and everything is negotiable when you sign the management agreement.

 

I call it nickel and diming, it is penny pinching, charge a flat up front fee, all the extras may be small, but they get tiresome reading or going over when doing agreements....

In other words...if you need 7%, ask for 7, not 6.5% then tack on the extras to make 7.

 

By "Statement", I assume you meant the End-of-Year Consolidated Statement? Cant imagine how you can charge for the monthly statement that accompanies the bank transfer.

I think people do not appreciate anything that's given to them for free, eg Annual Statement. They could have just manually add the 12 statements they receive in a year.

It is not a matter of "push a button" from the software:
- software cost money
- you are responsible for whatever that's printed on the statement. ie it has to be error-free.

If I have a bigger Practice, I will draw-up a special Menu for everyone; on a User-pay basis. This is not a Buffet; you get given all the food and wastage will be high. My favourite is the Advertising/Marketing. Someone has to pay for the subscription with Realestate.com or Domain.com, but how much we pay is quite irrelevant to the fees charged to each owner.

 

You can work out these things and cost to buiness, and charge a flat fee, plenty of PMs do, and I can tell you, when they are not defending charges, not defending why they do not do this or that, or why this or that costs money, it becomes much easier for both sides, and far less need to question...

How much does it cost for staff to have to answer questions on all the fees all the time ? I get sick of questions, lord knows it must be infuriating to answer them over and over and over

 

What about the end of financial year statements,

Many agencies charge $15 to $30

That is something I like arguing about

 

15....I wish....
I have either.....included...35...50 and one wanted 100....lol...maybe they were going to hire someone to manually write it out

This is what I am talking about above, charge 1 fee, it is just easier and irks people less, saves staff time and agro too.

 

We as forum users may also be living in a bubble, and be demanding little buggers.

PM's, are these things often an issue for many customers, or are we the difficult ones who are few and far between caring about our places and where the $$$ are going ?

 

Yes, we pay bank fees (seems to be related to the number of payments made in the month), admin fee $7.50+GST, and commission 5%+GST. This is in Sydney, I think rates vary by city a bit?
There's an EOY statement/fee which we decline/avoid as I keep track anyway.

I agree the admin fee is just nickel and diming. Although our monthly statements do get emailed and posted, the posting is unnecessary IMO.

A while ago the agency made some comment about getting an online system where LLs, tenants & PMs can all see what's happening, but this never eventuated.

Would have been good to track whether the PMs doing what he's supposed to be doing (including chasing those water usages he claims I didn't send,when I have been doing delivery & read receipts for him!)

 

An actual conversation I had with a pm years ago (happened to be the owner too)

Pm: we are upgrading our software so that it will send you a financial statement, it's optional and $35 per year
Me: no thank you, i choose not to get it
Pm: Oh the system doesnt allow it to not send and send to certain users
Me: so how can it be optional?
Pm: no reply

 

Thank you all very very much.

I appreciate your feedback.

So I presume we're all heading towards the statement being "free" part which I totally agree with but do we believe that statement and admin are the same thing? I mean administration is more about the costs associated with managing the property referring the software and so on.

EOFY statements? Where are we all at on that?

 

as a customer, I would love it agents stopped all the little fees and just included it in their mgmt fee.

a few additional dollars here and there for postage, admin is petty and silly. As ppl above said, there is virtually no cost and skill/effort to pressing a button for the accounting software to generate statements. All these are repetitive and recurring tasks, why aren't that part of 'managing' the property ?

a sensitive issue - the lease renewal fee. When its the same tenant for few years, minimal or no increase in rent, low maintenance on both sides, its hard to see the justification for charging these large fees for copy/paste/dates update.

 

I have recently changed management and the new agent charges 10% flat commission/fee. Will see how it goes, last agent charged 9.5% plus $5.5 admin per statement.

 

Sounds good, what area are you in?

 

That's in Nambour.

 

Just ditched my PM who was charging an $11 admin and $40.6 “rent collection fee”. Go figure.