Cheap Agents Cheap Service

By Jade Guilmartin

Recently I spoke with a landlord who had just purchased a property.  The property was vacant and he planned on renting it out as soon as possible.  He had left it to the last minute to find a suitable property manager and seemed only concerned about finding one who would negotiate on commission.
After spending about a week running around and talking to some agents, he managed to find one who would do it 1% cheaper then everyone else.  He happily signed his management agreement.  About a week later I noticed that his property was not even advertised for rent, and probably a few days after that is when it appeared on the internet.
The 1% that he saved equates to about $124.80 per year.  His property is a $240/wk home.  So if you do the maths you’ll notice that if he had have chosen an agent based on their efficiency and competence rather than their 1% discount he would have saved at least $300 for that year.
Other dangers with choosing cheap agents could include: getting a bad tenant, long vacancy periods, poor rent returns, poorly negotiated lease renewals, poorly managed rent arrears, less annual inspections or maintenace not promptly attended - many of these problems could cost you thousands!
Remember, you are dealing with a very large asset and you want someone who is professional and can handle your asset with care.
If you have had a bad experience with an agent, post a comment here and let us know about it!  Thanks for reading!