Hidden Agency Costs
Do you really know what your real estate agent is charging you? We are all guilty of it, seeing the monthly statement come in and either skimming over it (or in my case) not even opening it? The old adage of ‘no news is good news’ really hits home for a lot of us investors who are let’s face it – as long the rent is being paid we have got bigger things to be worrying, then meticulously screening our monthly statements.
But STOP! Take five minutes to look at your management agreement or your monthly statement and ask the question – am I paying more than what I should be?
Half the investors I know do not have any idea of what fees and charges their agencies are charging them and really they should know. Especially now more than ever with the changes in the rental market here in Darwin and the decrease in rents, Landlords should be aware of any hidden costs that are taking away from their bottom line and ending up being charged as ‘non-standard’ services that weren’t disclosed when the management was signed up with the agent.
Common ‘hidden costs’ that I see every day are:
- Fees for routine property inspections
- Fees for ingoing or outgoing property inspections
- Administration fees
- End of Financial Year statement fees
- Sundries fees
- Attending meetings on your behalf (charged at the hourly rates of $40-$60 upwards)
- Fees for showing your property
- Fees for marketing your property (i.e. print advertising)
- Fees for processing prospective applications for your property
- Re-letting fees
- Lease renewal fees
The list just can go on and on……
A lot of owners are drawn in with a lure of a low management fee, thinking they are getting the greatest deal in the world, 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 fee after fee (which usually adds up quickly) in ‘extra’ costs payable to the agent.
But how do we avoid this do you ask – very simple, check your management agreements and statements for any charges that look out of place and if you find fees that shouldn’t be there or you are unsure of ask your agent.
Alternatively, if you are in the market for an agency who will openly discuss their fees and services or if they offer a flat fee management package where everything is included but most of all - don’t be afraid to ask questions on what is included and do be wary of agents promising you the world for next to nothing.
After all there is a reason why a Ferrari costs more than a Kia and your management fees are no different and will reflect the level of service you will be provided.