you have been ripped off mate!
What? You were charged 40% extra on each creditors invoice!!?
That was my response when I recently spoke to a prospective landlord. He was eager to change property manager‘s as he had discovered that he was being charged 40% extra on each creditors invoice. The extra 40% was a kick back to the agency.
I have heard that some agencies will charge 10% invoice processing fee but 40%??? Never heard of that!
John told me that his pool certificate had expired, and the agency arranged a compliance officer, who discovered a few items to be fixed. John took care of these repairs himself and the inspector returned to issue the certificate.
When John saw the invoice he was very surprised at the high cost and he decided to do his own research.
He found a few numbers online and decided to give one a call.
Coincidently he spoke to the same person who provided his compliance certificate but was quoted a much lower price!
When asked why the agency charged so much more than what he was just quoted the officer said he had to speak to the agency about that.
The owner then realised that he was being ripped off.
He then started looking at previous invoices for jobs completed and discovered that this had been going on for a while.
My problem with this is that the owner had not been told that he would be charged an additional fee on top of each creditors invoice, so number one this is very dishonest. It was probably hidden somewhere in the fine print of the contract he signed, which makes it legally ok, but is it ethical?
I believe agents who charge a fair management fee have no need to add any extra commission on creditors invoices just to process them as invoice handling is part of our management .
My suggestion for landlords is to be wary of agents touting low fees.
Businesses don’t run on air they need money. Accepting a low fee incentivises the agent to look for ways like this to claw back lost revenue.
Know what you’re paying for, don’t be ripped off !