It would seem that it would be a benefit to have an accounting system that allowed you to capture each service and charge the owner for it each time it happend to make sure nothing slipped under the radar and ensure time and resources weren’t getting taken up with the administration. 

We’re interested in what fee’s PM’s would be interesting in charging per service for:

* leasing 

* Routine inspectons

* Each repair

* % of repair

* Paying an invoice 

Anything else??

Some of the other things that would be on the charge list: Lease renewals/rent reviews, Entry condition reports - I would assume standard repairs (not renovations) would still be included in the management fees.

Invoicing of the items is the issue – causing more administration work & would have to be part of a strict process to ensuure nothing is missed. It wouldn’t work for a large rent roll, but maybe for a small one?

Durrent Hunter produces a report covering different fees in different states. Very interesting stuff.

We charge 8.8% flat rate plus letting and admin.

One of our competitors is charging 15% maintenance on top of their normal management fee. Some others charge a % for calculating water usage.

No one around here charges for inspections.

HI Rachael,

Yes, I consulted to a business who had a similiar management structure, they knew there were clients who wanted basic services and those that would pay for additional services so they had 3 packages and the basic package covered rent collection, one inspection, basic repairs and maintenance but everything else was an additional, the other two packages were a higher percentange and included some additional services but then charged for more than 2 inspections, payment of outgoings etc and offered discounts on additional services as an incentive for them to get them to comit to a higher percentage the most expensive package was an all inclusive but with additional charges for refurbishment, insurance claims etc.  They found the introduction of these packages helped over come any fee objection as they had something for everyone and if they wanted a particular service they would pay for it.

I hope this helps

Clare Passlow

Thanks Clint – I have seen the Darren Hunter information, and agree it is very interesting. Given that no-one in your area charges for inspections, do you think owners would pay for inspections if commissions were reduced?

Clare, thanks for this insight. Do you remember the range of commission rates that were charged? I am interested to see what the minimum charge is for basic rent collection & end of month procedures…

Hi Everyone.

I’ve really enjoyed this discussion but at times I was struck by the fact that nothing has really changed in the 20 years that I have been in Property Management, it is about the figure and not about the service offering, surely its time for a change.

No one ever rings a hairdresser, for instance, and says, “how much to go blond?” and is then given a flat rate. No it depends on the length of the hair, the expertise of the hairdresser and the amount of work required. And yet Property Management as an industry continues to quote flat rates no matter what the standard of the property or the services required.

Recently a property manager asked for my help to “bring on” a multiple owner to her agency’s rent roll. The investor, who owned 12 properties, was a tradesman who looked after his own properties, did the gardens, painted regularly and was always upgrading his investments.  But what could we offer him, and perhaps more importantly what did he really want from us? Could we look after his properties as well as he did, I don’t think so, and was this what he in fact wanted? After some  discussion, we ascertained that the Investor wanted “tenant management” not really property management. there was very little variation in the cost but a more specific service offering and less chance to disappoint.

This experience made me think that perhaps its time to move beyond the old fashioned idea of a standard fee card for everyone, that perhaps its time to ask our Landlords exactly what they want from us and not just tell them what we are prepared to give them. The concept of bronze, gold and platinum packages should also perhaps be rejected and in their place we should put real services offerings that can be put together like building blocks to create a workable management agreement.

“You want us to let your property, great there are 24 actions invlolved in that, the cost is $500” Some of the other building blocks might be Tenant Management, Property Manaagement, Financial Management, Marketing, Advisory Services, Tribunal Representation and many more.

Perhaps its time to become creative with our charges and more beyond the rather antiquated “fee from rent” idea. 

Hi Rachael

The base commission was 6% up to 8%

Geri, Great idea and I think you are spot on!

Clare