ARE YOU A FOLLOWER, OR A LEADER?
Karen Stehr Property - Sunshine Coast Property Management
During my career I have worked for a few major real estate franchise groups who all seem to offer the same kind of commission structure when offering investors their property management services. It surprises me though how little thought actually goes into what is on offer. It seems, because it has always been done this way, it is the right way for most large companies.
The fee structure usually consists of a management fee, a letting fee, sundries, postage and petties, statement fee, lease renewal fee, court mediation fee, financial statement fee, maintenance fee for anything over a certain value and so the list goes on.
When I launched Karen Stehr Property, I reviewed my fee structure and I was most comfortable with 7.5% management fee + GST and a letting fee equivalent to the first weeks rent + GST.
However, the letting fee part never really felt quite right to me.
Let me break it down for you.
If an investor has a property for rent for $300 per week, he would be charged $330 if I secured a new tenant and rented his property as a letting fee + GST. If the same investor also had a property for rent for $1500 per week, he would be charged $1650 if I secured a new tenant and rented his property as a letting fee + GST.
$330.00 or $1650.00 for completing the same tasks, advertising the property, taking photos, holding open homes, securing a tenant, reference checks, lease documentation, entry reports and photos - same tasks yet a huge difference in the fees charged.
Is this correct? Is this value to an owner? Is this fair?
My response when I raised this issue with management in large corporations was always... "That's how we have always done it". I however, am not a "That's how we have always done it " kind of girl. I have always thought on the side of tenant and investor, rather than business profits and in this instance I find the fee unbalanced.
Therefore, I choose to negotiate on the letting fee for properties over the value of $750 per week, from 75% of the first weeks rent + GST , down to 50% of the first weeks rent + GST as a means to offer a more balanced manner in charging services provided. This way I can be certain that I am being paid for the work and effort that I am investing, but also ensure that the client feels they are actually receiving value for their investment in me.
This is just a simple example of an opportunity that being my own boss, I am able to use my own thought processes and rely on my instincts of being a leader rather than a follower. In everyday life, whether it be in personal or business decisions, I encourage the thought process of being a leader not a follower. Write your own rules and create your own destiny!
If you want to discuss anything property management do not hesitate to contact me.
M: 0417 618 480
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