Agency Cost Cutting – The Real Effects
Recently I was informed by a potential client that due to the current rental marketing being experienced in his area, that it was only fair that I should respond by dropping my agency fees to fall in line with decreased tenancy rents and higher vacancy demands.
Agencies cost cut their fees to bring in new managements by increasing property management portfolio sizes too well above what industry standards recommend, they don’t prioritise professional development of their staff and as a result you as a landlord get the following service:
- High turnover of staff (you will never deal with the same person)
- Lack of communication
- Lack of experienced staff to deal with your properties issues, causing larger issues
- Lack of marketing feedback for vacant properties
- Delays in showing your property or only showing your property when a select number of interested parties enquires
- High vacancy rates resulting in lower rents
- High arrears rates (your rent may not paid on time)
- Lack of communication with maintenance or maintenance not being attended to
- Property inspections not being completed on a regular basis
- High drama and dissatisfaction experienced by the Client
As a business person and investor I would not employ an agency based on the fact that they are the cheapest. There is a reason why a Ferrari costs more than a Kia and your management fees are no different they will reflect the level of service you will be provided.
A lot of owners are drawn in with a lure of a low management fee, only to find out the hard way that the low fee they have been promised only covers the very basics of property management services and the end result is them being charged additional fees (refer to our post regarding Hidden Fees).
Property management isn’t like McDonalds we don’t pre-package or pre-manufacture a product that can be whittled down to mere cents to deliver. Every Tenancy. Every Property. Every Landlord is different – they have different needs, challenges, personalities and time requirements. Made more challenging when the market is in the tenants favour, requiring the agent to deliver additional marketing, networking, communicating and overall service delivery to achieve the right tenant at the right price with minimal vacancy and then secure a positive ongoing relationship with proactive communication.
Choosing the right agency to represent you should never be made alone on price, there are varying factors. For more information regarding this contact us on 08 89 327777.