I am struggling with the cost to the business of onboarding a difficult tenancy/property when it’s new business.
I know exactly what to do to fix cheap agent or owner managed properties but the time involved in some of these is extraordinary.
Do you have an onboarding fee? How much is it? How do you sell it to a new/prospective client?
Hi @Colleen I haven’t heard of an onboarding fee before. In my own business, I probably looked at the time involved as a “Cost of Sale”. I agree that sometimes it can be quite time consuming, particularly when there is a tenant already in place and they may not be ideal.
I had some hard and fast rules around the types of property/owner I would bring on board and this helped, although there were times when I wondered what I had done 
Hi @Colleen
Maybe instead of a one off “on-boarding fee” these clients/properties are recognised upfront as being potentially more costly than your bottom dollar and therefore you would charge them a higher, all inclusive management fee to compensate for this. If you’re advertising your fees or discussing fees before you’ve realised that they’re going to be more costly upfront and they question the difference, than perhaps you offer to renegotiate their package once their issues/property/tenants are back in line with your office and staff expectations.
Hi Colleen,
I really love the idea of the fee. When I think about subscription models, which in some ways correlates to what we are, there’s usually an upfront fee for onboarding and then a regular fee. I wonder if perhaps you could sell it as a ‘your property isn’t up to scratch and this is what we’ll do to improve your return on investment - for eg, currently you’ll receive $350 per week rent but with our handiwork it will become $450. That’s an extra $5000 per year and we’ll take 10% of that as a fee so we all win. We’ll help you with the cost by spreading it out and negotiating terms with the providers or by arranging certigy for you.
Another way would be charging for time to bring it up to scratch, or taking 10% off the maintenance costs.
I reckon you could sell that. Good for thought for me too.
This may be a niche market for you @Colleen and you could leverage on this. Many moons ago I used to deliberately chase new business properties with bad tenants in place. I was one of those guys that used to take a photo of a property with overgrown lawns or unregistered cars on the lawn and send them to that owner (managed by another agent). I had great systems in place to deal with these properties and bring them back up to scratch quickly. I had court preparation and attendance fees at $80/hour in my MA so recouped costs that way. FYI that was 10 years ago, I’m sure you could get more now.
I do really like that idea.
It is something we already promote. I am ‘gentle’ in that I don’t rubbish the agent but let them know the value of what we do with the cost of not bringing the property up to meet current regulations.
My other specialty is QCAT. I charge $165 prep & lodgement fee and $110ph min 2 hours attendance fee.
Cleaning up the property/tenancy is therapeutic because it stretches the skills but some literally take days.
I guess also, I don’t have a BDM that I have to pay and most of new business is organic soooo there’s that!
I am with @jodie.stainton on this, an onboarding fee is a good idea to look at. You can always choose to “Waive it” for good quality properties and owners meaning they feel like they are getting a deal.
If you get a new software, or lots of other subscription services, there is an onboarding fee. I dont see why PM should not have one!
Great idea… @jeremy will this work in our market place? Especially as NZ are loosing the letting fees from tenants shortly might be a good way to re-coop some of the costs.
I’ve quoted a few at $143 hour while that tenant is still in the home plus any time to deal with bonds and claims etc afterwards. Basically anything to do with that tenant costs $143 hour. After that tenant has gone then normal rates.
But to be honest, many times those tenants are attracted to average or below average properties. The reason they are below average is due to the landlords attitude towards maintenance and upkeep, improvements etc.
I don’t really want those landlords/properties when there is much easier ways to make a dollar 