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.