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Property Management Fees and Charges
Want to know exactly how much it really costs? It’s easier to work out than you think…
You can use this calculator to validly compare the true cost of any agent fairly and squarely. All assumptions are listed below the calculator, and the special article below uncovers some dirty little secrets that most agents would prefer to keep under lock and key.
This is the formula the other agents don’t want you to see.
Beware! Here Are Two Dirty Little Secrets About Property Management Costs That Agents Are Hiding From You…
Agents’ Dirty Little Secret Number 1:
The number 1 cost facing owners is rent income lost through vacancies.
Just 4 weeks vacant adds up to around $1500 in lost revenue out of your pocket. (This is around the entire cost of most agents average management fees for the YEAR!!!) The table below shows you the differences between 0% vacancy, the Townsville average agent’s vacancy of 4.5% and an awful vacancy of 8%.
Agents Dirty Little Secret Number 2:
This extra cost of vacancy can be reduced to almost nothing by good management!
Just ask every agent you are considering as managers for your valuable property – just one simple question.
“What is your vacancy rate?“
If the agent does not know the answer immediately or cannot provide proof, it may be time to rethink your agent?
Once you have your agents annual vacancy rate, you can truly compare agents performance based on what will go in YOUR POCKET! If want to work out this figure for your property, just enter the number of days your rental property was empty last year into our calculator above.
According to RTA Statistics, most Townsville agents annual vacancy is around 4.5%*
(Property Management Pirates had an average Vacancy rate for 2011 of 0.89%!)
So – the largest avoidable expense you will ever have from your rental property is NOT the management fees your agent charges. In the absence of other information, owners often choose the manager of their property based on the percentage of management fee the agent quotes.
As you have just seen in the calculator above, this is almost always a VERY costly mistake.
Management fees make up one small part of the investment equation. The difference between an Agent quoting 9% and an agent quoting 7% seems large BUT here is the reality:
“On a $350 per week property the difference of 2% in management fees adds up to just $7 per week…“
By choosing your agent based on this figure alone, you could cost yourself hundreds or even thousands of dollars for many years.
Don’t be fooled by agents quoting low rates to “suck you in and sign a contract”, use our fee calculator to work out the TRUE cost of managing your property before you sign. (You may also want to consider whether any prospective agents have the systems, the skills, the people and the confidence to offer any guarantees. For ours – CLICK HERE)
Call us now or just click a link below to organise a quick chat with our team to find out if we are a potential fit for you.