Charging landlords extra fees
According to the Macquarie Relationship Banking 2012 Real Estate Benchmarking Report, WA was followed by South Australia (8.4 per cent), Queensland (8.1 per cent), NSW (6.5 per cent) and Victoria (6.3 per cent).
However, some agencies are charging both higher management rates and a creative array of one-off fees to boost their revenues.
Property management consultant, Darren Hunter, has put together a report describing how some agents charge extra fees for services such as routine inspections, exit inspections, condition reports, taking photographs and providing end of financial year statements.
Some of the more creative fee ideas include:
- A repairs and maintenance fee as a percentage of what the tradesperson charges, with a suggested cap of $55 per job.
- A rent increase fee which charges a percentage of any rent increase over a year – for example a property where the rent has gone up $20 a week or $1040 a year might charge $114.40 (including GST) or 11 per cent of the total.
- An extra fee to create video footage at the ingoing inspection with a suggested charge of $55 per tenancy.
- An ‘outside of duties’ fee of $55-110 an hour charged to discourage landlords from getting PMs to oversee renovations.
The head of residential real estate at Macquarie Relationship Banking, Shaun Bassett, has been quoted as saying that agencies that charge a commission rate considerably lower than the average “simply can’t survive”.
Property management by numbers
Source: Macquarie Relationship Banking 2012 Real Estate Benchmarking Report