Owners of Queenstown rental properties pay higher management fees than elsewhere – and local property managers say that is entirely justified.
A Mountain Scene survey finds fees on a three-bedroom central Queenstown house would cost about one-third more than similar houses in Christchurch or Dunedin – about an extra $500 yearly.
Compared with Invercargill, management fees in Queenstown are at least double.
All bar one Queenstown rental agency we surveyed charges higher rates of commission on rents collected – and those rents aremarkedly higher than in other South Island centres so total dollars paid by owners are far higher here.
Queenstown Accommodation Centre, Resort Property Rentals and Executive Accommodation all have a standard commission of 10 per cent of rent plus GST – although Resort’s Doug MacGillivray will negotiate.
Hoamz To Rent charges nine per cent.
Property managers also bill for periodic property inspections – so how do local agents fare there?
QAC and Hoamz charge $50 per inspection, Executive Accommodation $45 and Resort $40 – all plus GST.
Inspections elsewhere range between $30-$45 plus GST – although Invercargill’s Profit Rentals does free checks four-monthly.
Queenstown agents beat their counterparts hands-down in one department, adding only five per cent markup to repair and maintenance jobs, compared with eight to 9.5 per cent elsewhere.
Discussing higher commission rates on higher rents, all four local agents point out overheads are far higher here – office leases, fuel and staff salaries are all mentioned.
Executive Accommodation’s Keith Hibbs rates his service as “far superior”, including many free extras which firms elsewhere charge for – like Tenancy Tribunal appearances.
Alan Baillie of QAC and Fred Bramwell of Hoamz both argue the main reason for higher fees here is what Baillie calls our “very transient, high-turnover type of tenant”.
Tenants elsewhere commonly rent the same property for 10 years, they say, whereas agents here must advertise more, spend longer showing people round, and shell out more on vehicles.
Yet Baillie believes change is afoot.
“The consumer [owner] doesn’t seem to necessarily like property management the way it’s currently done … and it will have to change to meet the needs of a savvy consumer.”
Throughout the country, depending on location and type of product, commissions vary between six and 15 per cent, Baillie says.