Myth #3: All Rental Companies Charge the Same for Management Services of Auckland Apartments
Apartment Specialists Podcast No: 20
In this podcast, we will talk about another myth concerning rental companies. I will divulge their common methods and what you need to know about them!
Andrew Murray, Apartment Specialists. Myth number three on the Auckland apartment market. All rental companies charge the same - complete myth.
Now, what I come across most is basically, rental companies will charge between generally, 7% of your rent and 9% of your rent. That's what most of the companies charge. The reason why one charges nine, and the other one charges seven in regards of service, I don't really see any difference at all. Now what I don't understand is - owners are paying 7-9% of their rent. So if that say $400 a week, that is - I don't know - around $36 a week to the rental manager, to look after their apartment. Now you times that by 10, that's $360. Times it by another five, and that's a year. So that's a lot of money you're paying to a rental manager.
So what I don't understand is on top of that, a lot of the rental manager's charge for all these other things. For example - okay, they're going to check your apartment. They'll go and check your tenant. Now they should be checking your tenant in my opinion four times a year because tenants can do all kinds of damage to your apartment. You want that checked to make sure the tenant's are looking after it. There's no damage and they're not having parties. All those kind of things. All the horror stories we hear - and I see quite often. Yet, some only do it twice a year. And then others I've come across haven't even check it at all and have got no idea what is happening. Yet, you're paying them for doing what? Just sitting there?
Now then, there's all these other charges some companies will be charging for when they might have to do a call-out. So for example, maybe something needed to be done or fixed in the apartment. So they get called out to the apartment to see it - and they'll charge the owner a call-out fee. Or when work needs to be done and say a plumber comes in and fixes it and that gets organized and there's an invoice or whatever. They'll then put a percentage on top of the invoice that they charge. Now, I just don't understand the industry really here because it's not really transparent. What are you paying that 7% or 9% of your rent for? Shouldn't it be that to manage your apartment? And doesn't all those responsibilities should come underneath it?
So really it's finding - Now, I don't do rental management. I'm not trying to get your business or anything. I'm just trying to educate you and knock out - okay what's sort of happening here. And then look at the company that's been going after you. Because, how is an owner supposed to know if they are being looked after? Or what other companies are doing or charging cause there's some very good ones out there.
And so look at your statement, do you understand it? Is it very transparent? Do you know what you're being charged? Do you think it's fair? If you've got no idea, it's no fault of yours. Send an email. Scan in an invoice to [email protected] and I'll have a look at it and sort of give you an idea of what you're being charged and what's normal in the market and what's above or below that. And obviously this is a service and that kind of thing which only you really know.
But yeah, look into it. See what you've been paying because you pay thousand dollars a year for the apartment to be managed. And if it's not being done properly and you're getting charged too much for no extra value or service, you're being taken for a ride.
Anyway, I hope that's given you some invisibility. Next week myth number four. And we will be talking about agent sharing commission which is conjunctional sales. So the myth is all agents make it easy for other agents to sell your apartment. And if they do, they share the commission equally.
I'll talk to you next month. I think you'll find this one quite interesting and have a good week.