If you’re thinking of hiring a property manager, you may be wondering if you can negotiate their fees.
The short answer is yes, you can work the fees out with East Perth award-winning property management specialists.
Here’s a guide on how to do so.
What to Present in Property Management Fee Negotiations
If you want to get lower fees from your property manager, you need to present the following:
A Diverse Property Portfolio
If you’re a property investor with several ownerships, you’re in an excellent position to negotiate the fees.
If the service costs 10% apiece, having several properties in East Perth, WA should help you lower the fees from 5% to 8%.
Plus, if you have other real estate in North Perth, South Perth, or West Perth, you may also get fee reductions.
Multi-Family Residential Property
Even if you don’t own several properties in East Perth, you can still negotiate the service fees. You may get discounts if you’re leasing a multi-unit home.
It’s similar to having a lot of property investment under your belt. Since you get two or more payments at any one time, it means your manager will gain a lot from your tenants, too.
As to the rate, it will depend on the state of your apartments. For a two-unit property, you may try to ask for a 1% to 2% reduction.
If you have three or more units, you can always ask for more. Depending on the manager, owners may get as much as a 4% discount.
Profitable Real Estate Location
A house in the Perth metropolitan area is considered very attractive and lucrative. Here, you can get as much as $450 a week.
Note that the current average rent price is $340 for a unit and $395 for a house.
Sadly, the higher the renting cost is, the higher the property management fee.
Although this is the case, landlords can always ask for a fee reduction.
Remember: if you have a lucrative property investment, it equates to a constant cash flow all year round.
Given this prospect, the best property managers won’t hesitate to give a 1% to 2% discount. Although it might not seem significant, you’ll end up saving a lot in the future.
Other Property Management Fees You Can Negotiate
Say you don’t have multiple properties, multi-family units, or a popular residential location. You can still negotiate the following with your East Perth award-winning property management specialists:
Property Investment Setup Fees
Setup fees are put forth to pay for unforeseen troubles.
For one, the manager may need to run after the tenant or re-list the unit again.
If you’ve established that your clients pay on time, you can say that the manager doesn’t need this fee. There’s nothing to set up, after all.
Property Management Maintenance Fees
For new property investors, this fee often appears vague.
Typically, it’s the cost of doing maintenance work or hiring contractors to do so.
If your manager plans to outsource maintenance, they may ask you for an additional 10% to 15%.
That said, you can negotiate if they’re giving you a higher rate.
If they won’t budge, you can compromise by maintaining the unit on your own or hiring your own contractor to do the repairs.
Lease Renewal Fee
Should your tenants decide to sign another lease, your manager may bill you for a renewal fee. This should cover the cost of communicating with clients, processing the document, and ensuring all things are okay.
If you only have one property investment, this may be given to you as a flat fee. Traditionally, it’s equivalent to a month’s worth of rent.
If you have multiple units, you need to pay a handful of renewal fees.
Just like negotiating your property management fees, you can try to work the renewal fee out. After all, your real estate is sure to bring a lot of revenue to their business.
Evaluating Property Management Fees
Before you sign a contract, make sure to examine all the fees they will bill you.
For one, pay attention to the extra fees, such as inspection costs or tribunal fees. You can always ask them why they’re charging those. Likewise, you can ask them about the benefits of such services.
If you feel like the cost is justified, then, by all means, go with it.
Should they fail to discuss the importance of such fees, you should consider looking for a company that offers the same award-winning service.
More often than not, some managers perform the same service without the additional costs.
As you see, you can always negotiate the real estate management fees.
That said, you need to make sure that services don’t get compromised once you do so. You don’t want your investment to suffer just because of the fee cutbacks.