Rental Property Management rates

Peter Blackshaw Woden/Curtin gets my vote – leasing manager is very knowledgable and the team works well. I pay 8.8% GST inclusive which isn’t the cheapest or most expensive in town. I have had friends who have gone with cheaper Agencies an found they got exactly what they paid for..and less. I prefer to deal with a professional company to manage my investment and when there have been issues such as a recent roof leak they knew what to do immediately and had the tradespeople available to fix immediately. Saved me a lot of hassle.

poetix said :

watto23 said :

Endrey said :

I politely request that you stop buying all of the houses using what should be your tax to make my life as a renter more difficult.

Its not that simple.

Yes, I believe it is. Negative gearing is just wrong, allowing those who have more than enough money to more easily exploit those who don’t (and who are unlikely to ever save a deposit, due to high rents).

Sigh. I did the maths the other day. We’ve had a rental house for nine years now, mostly for emotional reasons (we didn’t want to sell it as we had a strong attachment). In that time we’ve made 4.5% return on investment once I factor in all the costs of having tenants in the building. That doesn’t include paying ourselves for any of the time and worry we’ve experienced.

Negative gearing only happens on rental losses — in effect, you can tax deduct the subsidy that you provided a tenant with. Overall, this makes the rental market more affordable.

If negative gearing is removed, then there will be a short term dip in house sale prices as land lords ditch the properties as being even more uneconomic, and then rents will spike up as the already too small inventory of rental properties shrinks even further. Alternatively, rents might just spike as land lords choose to pass on the extra cost to tenants.

Stopping negative gearing is discussed every few years. There is a reason it never happens.

basketofcat said :

Is there an agent anyone would recommend for owners that are interstate or overseas? I don’t think self-managed would work for that… it’d be nice not to need to travel back and forth.

If you have no alternative, use a small local agency such as “bright partners” as noted in an earlier post. Property management is their “bread & butter” so they obviously give it the respect it deserves. Larger corporate entities treat it with disdain as they chase the high commissions for sales.

Is there an agent anyone would recommend for owners that are interstate or overseas? I don’t think self-managed would work for that… it’d be nice not to need to travel back and forth.

Recent experience gives a big tick to self management if you have the time/effort to do so.
Property Managers who care about both landlords and tenants are a scarce commodity.
Having experience on both sides of the fence I would have no hesitation self managing.
From my perspective the property managers do not contribute much for fees paid.
Do it yourself to keep all parties satisfied, if time permits.

I posted this on a similar topic a while back:

Bit of general advice that may help. This is just opinion from experience and I don’t profess to be a lawyer, tax agent, estate agent or any other kind of agent:
– Have a professional depreciation company draw up a depreciation schedule for you. There’s a lot that you can legitimately claim and there’s different depreciation methods to use.
– If possible, manage the property yourself. The real estate agent doesn’t do much to earn that 10% of rent. Sometimes agents neglect things that you may notice and there’s this belief that the agent sorts things out if it all goes pear shaped with the tenant. This is also not always the case. All the paperwork you need for self managing is available online.
– Owning a rental property is unlikely to earn you quick bucks. You usually have to be in it for the long run – even then you can lose out. Have spare money ready as all sorts of expenses pop up during the year and before you can claim any on tax.
– Look after the tenant and they will hopefully look after you. Karma and all that.
– Choose the right tenant. Considering a couple with an older dog is often a good call as finding a rental property is hard for dog owners and they might stick with your rental longer term.
– Getting a bad tenant can be hell. You’ve got a lot more to lose than they do and the law is often on their side.
– Make sure there is a clear understanding on all aspects of the lease – particularly who pays water excess and other bills etc. Spell it all out up front in writing.
– Be meticulous with your condition schedule and take photos.
– Often you don’t make money from the rental and the only area of profit is appreciation of the property. If this isn’t happening, then it may not be worth maintaining that investment.
– Get appropriate landlord’s insurance..
– Be aware of how much land tax is. It’s usually a large cost.
– There’s an interesting thing with stamp duty in ACT. If you have purchased the property as an investment property, because ACT is leasehold, you may be able claim stamp duty on your tax return.

Hope this helps.

poetix said :

watto23 said :

Endrey said :

I politely request that you stop buying all of the houses using what should be your tax to make my life as a renter more difficult.

Its not that simple.

Yes, I believe it is. Negative gearing is just wrong, allowing those who have more than enough money to more easily exploit those who don’t (and who are unlikely to ever save a deposit, due to high rents).

It’s not that simple. Even with negative gearing the investor needs the property value to rise. If the property value falls they would have been better off hiding that money under the mattress.

Remember that with negative gearing the investor is already accepting a loss. Negative gearing just means you aren’t taxed on your losses, which is true for most other investments..

Bogan rags like the SMH like to play up the idea that negative gearing is making property prices high. The reality is the slow build rate for new housing and our rising population makes property prices high. We have a “dwelling shortage” which increases by 30,000 homes per year. That’s because every year we build 150,000 homes but we need 180,000 homes.

http://www.investmentproperty-melbourne.com.au/wp-content/uploads/2012/04/Housing-Demographics-to-2020.pdf

Builders need to get more efficient like the Germans and Scandinavians did with pre-fab. Only when supply is met and demand decreases will the prices go down.

Property managers aren’t that expensive. Charges include a “letting fee” for each new tenant (usually 1 week’s rent) and you might have to spring for advertising costs (1 week). The property manager typically charges between 7% and 9% commission per year. For normal rentals ($400-500 per week) the annual commission works out to $2k which is all tax deductible.

The property manager will do two inspections per year, lodge the paperwork and the bond, chase the tenants for rent, and co-ordinate tradesmen for maintenance. They will also prepare the annual statement for your accountant and/or tax software.

Most tenants keep to themselves and aren’t any trouble. So going it alone can save you about $1200 per year in your pocket (that’s the $2k after getting $800 tax rebate). Or you can deduct 10% off the rent which makes your rental more attractive. That’s helpful in a competitive market.

Property managers sometimes stuff up, because they’re only human, and with 50-100 properties in a portfolio they aren’t always on top of things. My parents had a property manager who didn’t notice the tenants were trashing the joint. Many $1000s of damage later they sacked the property manager and evicted the tenants. My parents now manage the property themselves. Landlord’s insurance paid for the damage and the lost rent.

watto23 said :

Endrey said :

I politely request that you stop buying all of the houses using what should be your tax to make my life as a renter more difficult.

Its not that simple.

Yes, I believe it is. Negative gearing is just wrong, allowing those who have more than enough money to more easily exploit those who don’t (and who are unlikely to ever save a deposit, due to high rents).

Darkfalz said :

If you have good tenants who are interested in staying long term, it’s better to rent directly. If you have a higher turnover place or don’t want to have to deal with potentially bad tenants, better to have an agent do it for you.

Perfectly summed up..As an owner of multiple properties, I have long term tenants and have always handled the lease arrangements, lodgements of bond, repairs etc..Only minor issues have arisen over the years..I have saved a fortune in management fees…BUT, if the occasion rose where there was a high turnover of tenants, it would be worth going through an agency simply to minimise the stress.