• Is your current property manager actually a property investor?
• How long have they been doing Property Management for?
• Do they have a plan for regular maintenance for the property?
• Do they know much about the tax advantages such as building depreciation?
• Do they understand body corporate and how they work?
• Can they tell you the last sale of a property similar to yours?
• Can they tell you the rental of similar properties and the vacancy rates in the area?
• If you want to speak to them outside business hours can you call them?
• Do they show properties after hours?
• Do they answer the phone after hours for potential tenants?
One of the biggest complaints that prospective tenants have is the ability to actually see the property. Most other agencies do not show after hours – and this can be an issue in renting the property quickly. We not only show the properties after hours, but our tenants know that if they have an issue they can call any time. To put this to the test, try and call your current manager after hours. We can assure you that if you call us on the mobile it will answered, and if not we will return your call as soon as we get the message. Tenants like this and we have many that have been with us for years. In fact when they outgrow the current property they ask that we find them another so that they can stay with us.
Many agents have chosen to go down the path of offering a small fee for management, another small fee for rent collection – and most owners think that this is all that they charge – but it isn’t. When deciding the fees to charge for our services, we decided it was best to do a flat fee that is all inclusive.
It is easy to look at this figure and believe we are higher than the others. Some of the fees the others charge over their management and collection fees include
• One week’s letting fee to find a tenant
• Postage and Stationary
• Inspection Fees
• Maintenance Fees
• End of Financial Year Statement Fees
• Court Fees
• Insurance Lodgement Fees
• Lease Renewal Fees
• Application Processing Fees
• Excessive Advertising Costs
• Refurbishment Fee
• Fee to obtain Quotes
We charge a flat fee of 12% plus GST of all rent collected. This may sound higher than what you are currently paying, but when you add in all the extra fees you may find that this is actually closer to 15%. The one week’s let fee is equivalent to 8 weeks of our management fee.
There are many areas that we save you money on. Our advertising cost is fixed at $38.50 per changeover of tenancy. This includes listing the property on www.realestate.com.au and the local Cairns Post if required. Should the cost be higher, then then our company covers the extra cost – this is not passed onto you.
Maintenance is another area that we hear a lot of complaints about not just from tenants but owners equally. The biggest issue most tenants have is that maintenance is not completed. If a call is made on an urgent issue it is normally dealt with and resolved within a few hours. If it is of a non-urgent nature, we have it completed normally within a week. We have a fantastic group of handy men, electricians, tree loppers, plumbers and other contractors that we work with regularly.
The quality of workmanship is high, but each understands that the job must be done with a budget in mind. Many of our owners are very surprised at how cost effective our maintenance program is.
We recently had a client show us a quote from another agent on works to be completed. These were very basic maintenance items however the invoice was close to $1000. Our handy man completed the works and it was under $300 for the same job.
The other day whilst showing a potential buyer a property, they turned to me and asked about our property management service. They said “Are you good?” to which I say “We’re one of the best”.
When they ask what we charge I simply say “The best isn’t cheap, if you want cheap then we aren’t the people for you”. I will admit, I have a few flaws – one of them is that I am not a natural salesperson and at times I doubt how good we are at what we do. After saying it, I went into an immediate self doubt phase.
I have been pondering this statement for the past few weeks now and it has had time to rattle around inside. It is now time to put it down on paper.
On the surface, our fees may appear to be higher than other agents, but the reality is that most other property managers aren’t investors. They simply don’t understand what an investment property needs, what an investor needs and the consequences of their actions are on the owner and the property. I could give you hundreds of examples, but today I am going to focus on just one that we came across recently.
There are two units for sale in Whitfield. They are both one bedroom units and in the same complex. They are owned by the same investor and he bought them almost 14 years ago. Fortunately he managed to buy them cheaply before the market went up last time, and even with the lower prices he will still make a slight profit. We happen to manage similar units in the area, and we have been achieving $200 per week for the past few years. We also manage similar ones in the Manunda area which we also achieve between $190 – 200 per week. We do furnish our units and although there is an initial cost to do this, the extra weekly return is $20 – 30 per week. Better than this we tend to find the quality of tenant is better by furnishing it – that is just the way it is in Cairns.
This complex is a small complex of just 12 units. You can tell that we haven’t had a hand in the property – from the high body corporate levies, to the presentation of the property externally, to the quality of tenants over all in the complex. Worst of all, both of these units that are for sale have just been signed up for 12 month leases at $170 per week! We are getting $185 per week for a bedsit, so why on earth would you give it away at $170 for a bigger and nicer unit, in a better area?
We are walking through the first unit, and my eyes are lighting up with what we can do internally with very little upgrading. It is a good sized one bedroom unit and the potential is there. The unit is just as good as the first one. Even better the owner has just put in a new hot water system and the stove is being replaced – that on its own is worth at least $2500.
Firstly, there is no way on earth we would have let these properties rent for $170 per week – we would have upgraded the property and had it rented at $200 per week.
Secondly, we would have got involved with the body corporate and this would not be the worst block in the street.
Thirdly and this I believe is the most important one, there is no way we would have let our owner sell this property for the price our buyers got it for. Being conservative, having a poor property manager and in turn a poor sales agent has cost this owner at least $10,000 per unit – and that is just on the sales price! It has also cost him a minimum of $40 extra a week, every week that he has owned it.
So yes, on paper we may appear to be more expensive than your franchise property management company, but those few dollars extra you pay for us really is worth it.