A friend's friend has a few rental properties in Bris and want someone to looking after them because he is inter-state. My responsibility involves open home, inspection, regular inspection, repair arrangement, emergency, etc. I don't handle any financial matters.
I have no idea how much rate shall I charge. Should it be by case or by hour rate? The distance from my place to these properties usually takes 40 min drive one way.
Occasional?
He is a friend's friend, so pretty much just a business relationship.
I didn't do RE before so have little idea how they work. In the discussion, my responsibility will be:
From my renting experience, it requires minimum effort for my then rental agents, they only need to be there for like 30 minutes. He has only a couple of properties so I don't need to attend them every week. That's "Occasional" for me. Since I am not involved in any money affair or finding tenants, I have minimum responsibility. And some extra pocket money isn't bad.
Shall I charge by case or hour (including driving)? What rate is reasonable?
I'd say tell him to get a real estate agent. It's literally their job to manage properties, so they'll have experience and if something goes wrong they'll know how to deal with it.
Personally I think most property managers are incompetent (ie I'd do it myself instead of hiring someone), but if he lives interstate it makes it difficult to do it all himself.
This may be why the owner wants a friend of a friend. They've figured the OP can't do any worse than a Property Manager, and if the OP is dedicated to only his properties, there's a likely chance of better outcomes for both.
I agree that an actual Property Manager is going to be better positioned to deal with problems - they know all the ins and outs and the owner would also have some legal recourse.
OP: Is it worth your time/money/effort/risk? Personal call. Would I do it? No.
Like my RE agent. Who I've seen at our property twice in two years. As long as I pay the rent, they don't care less what breaks - the fence is falling down, the TV antenna snapped off in the last storm… The long list of things we gave them that needed fixing, I've done most of them myself.
Will you have this arrangement in writing? What happens is something goes wrong, if a tenant has an emergency? What if you agree for something on the tenants behalf the owner disagrees with? Sounds like if things go bad could be a real hassle.
Don't know about Queensland but I would suspect that they would have state legislation that makes it illegal to charge for real estate work unless you are a licensed real estate agent.
I wouldn't worry about that. If he's just organising repairs and such as above, anyone can do that, he would be working as a personal assistant more than anything. I think an hourly rate for that type of work would be fine, also an expense rate for driving per km, to cover fuel, tyres, etc.
We live in Melbourne and have a property in London which we manage ourselves from here. We have an acquaintance that we have called on several times to do various tasks associated with the property eg showing prospective tenants thru property (we then SKYPE interview the short-listed ones); checking tenants out; being on-site with tradesmen. We pay this person an hourly rate including any travelling time and any OOP expenses. We've doing this for 10 years and to date works well.
We only pay a letting agent for doing the paperwork ie drawing up lease, inventory etc. One bad experience with a RE agent for fully managing the property was enough to put us off for a long time;)
HTH
Rather than ask what rate is reasonable, you should ask what your time is worth. It'll have to be worth giving up some of your weekends with family and friends, being annoyed late evenings and maybe early mornings. It wont be regularly annoying, but things can happen anytime. Also depends on the condition of the property.
Weekends are when tenants want to inspect. If you are their emergency contact, they will ring you to fix things. Emergency is also very subjective.
I once rented where a friend of the owner acted as an agent. The friend collected and kept the first weeks rent after finding a tenant. But this friend was also a licensed agent who was trying to sell the property for way above the market price at the time. It stayed on the market the whole 9 months I lived there.
Consider that A PM will make money by taking the first week's rent of each new tenancy, charging ~8% of income, and earning interest by temporarily holding payments in their trust account. Work out what that would cost the owner and lower it.
If you want, estimate how many hours it would need per week, divide the above cost by the number of hours add a bit extra for car costs, and there's your hourly rate.
If you do it cheaper for cash to avoid tax, just make sure that your friend doesn't try to claim your payments as management expenses, otherwise the ATO could be onto both of you.
So you're basically acting like a Real Estate Agent without worrying about the rent collection??
A RE would charge a letting fee for finding tenants and a % of the weekly rent.
Ask yourself, is it really worth your hassle? Remember your friend can claim letting expenses and RE fees etc. on tax.
If you were to go the hourly rate, you would start the clock from when you leave home to when you get back. What about dealing with phone calls? Have a minimum rate for 'calls' not requiring attendance and 'call-outs'which do.
Personally, I'd leave it to a Real Estate Agent to worry about.