WA What to pay attention to when looking at property management contract

Hi Everyone,

Just made my first IP purchase (*deep breathes*) and the property manager of the buyers agent branch is looking for us to sign up with them to renewal the lease of the current tenants. I've never seen a management contract before, so I'm wondering what is normally on it? What should I be looking out for?

Their minimum term contract is 18months. I did notice under termination, I can terminate within the first 3 months without penalties, but it doesn't specify the penalty. Is this normal? What happens if things go down hill after 6 months, can you terminate a PM?

PS - If anyone has has a good recommendation of a property manager in Perth that would be great

 

Check this out and some more discussion on PC - maybe it gives you some pointers

What makes a great property manager?

https://different.com.au/blog/property-management-contract/

 

Congratulations on the purchase! What suburb is it in? My PM can handle NOR stuff @Tom Cooper

When comparing PMs you want to look at a few things and it's not all on the contract
- how experienced is your PM?
- how many properties do they manage (ie do they have enough time to look after yours properly)
- how many years have their staff been at the company (high turnover suggests overworked staff)

Most Perth contracts aren't all inclusive so there will be a number of items which are extra over and above the percentage fee - there can be quite a bit of difference in renewal fees, inspection fees, insurance claim fees etc

 

FYI the REIWA standard form usually sets out damages as as liquidated damages equal to 50% of the management fee otherwise payable for the unexpired term of the agreement. E.g. if you end your management agreement early with 6 months remaining on the contract and the management fee is 10% on a $400/wk rental, you will have to pay them 6 months worth of fees at half the rate i.e. $400 rent x 26 weeks x 10% mgmt fee x 50% = $520 liquidated damages.

No idea if the agreement you are being offered is the REIWA standard form though.

 

The amount they can spend on repairs.....

 

Thanks! I purchased in Ocean Reef. I will reach out to Tom for a chat as well.

The current guys gave us an option for inclusive and PAYG as well, but I didn't want to go with inclusive as I'm not sure how this team will actually go managing the property.

 

It looks like the standard REIWA form. Thank you I will look out for that.

 

Ocean Reef area
Sue Heggs
Picks good tennants
Easy to contact and get a reply

The only issue was some of the Tradesman she used. I didn't like her electrician.

 

Thank you! I've been looking for something like this.

 

Bit off topic but still relevant- Does anyone have opinion on those set flat fee Property Mgmt structures?