REA Group, owner of realestate.com.au, will be introducing a money-saving, flexible subscription fee, but not all property managers are pleased with the option.
According to Michael Furlong, principal at award-winning agency Map Real Estate in Melbourne, at first glance the new flexi subscription, which offers agencies the ability to advertise all of their property listings on realestate.com.au within the one subscription cost, seemed like it would save his business hundreds of dollars a month.
However, the numbers didn’t quite add up.
“It sounded great at first, but once I did the figures, with my rep sitting with me, I was at a huge loss per month,” Mr Furlong told Residential Property Manager.
Mr Furlong said his subscription fee fell from $1,350 to $600; however, each individual listing would now cost an additional $65 to upload.
“I have a rent roll of 500. At the moment I have 38 listings to upload plus the $600 monthly fee, so that brings my monthly cost to $3,070,” he said.
“That is a huge increase for me, and when I asked how I was meant to find the increase in money, my REA rep simply said just pass it on to your landlords.
“I work for the landlord. I can’t expect them to accept those increases when they are really not getting any more for their money,” he said.
“I’d like to see an REA representative have that conversation with our landlords.”
According to REA Group's general manager of sales and operations, Arthur Charlaftis, the change in fee structure has come about after industry consultation.
“Our customers told us they wanted to reduce fixed costs and to have more flexibility with their subscriptions,” Mr Charlaftis told Residential Property Manager.
“As a result, we’ve introduced the cheaper and more flexible subscription and now we’ve started educating vendors and landlords about the value of digital to assist our customers in obtaining advertising costs at the beginning of their property marketing campaigns.”
A posting by Mr Furlong on the fee change on social media page The Australian Property Managers Community generated similar concerns from a number of property managers and principals.
One property manager posted, “I would love for my excitable realestate.com rep to explain and justify the increase to my landlords direct.”
Another said, “As always with realestate.com.au, estate agents are their own worst enemy, letting them get so big to monopolise the industry and not support the industry website. Wouldn't it be great to boycott them?”
The anger around rising subscription costs comes as REA Group reported a $41 million, on-year rise in revenue in the nine months to 31 March 2013, taking it to $244 million. The result, which was unaudited, was part of a filing by New News Corporation with the US Securities and Exchange Commission in New York.
“I’d like to make it clear that I am not against businesses making a profit, after all that is the aim of the game,” Mr Furlong conceded.
“It is OK for big businesses to be turning these profits, but it is not OK for them to year-on-year hike up the prices of subscriptions and then plainly say just past the costs on to your landlords.
“Small to medium real estate businesses are unable to recoup these costs.”
According to Melanie Dennis, director at Domain Property Advocates in Hawthorne in inner Melbourne, property management-only businesses will be worst affected by the changes.
“We can’t recoup the costs of higher fees through a sales department; we are definitely at a disadvantage,” she told Residential Property Manager.
Mr Furlong has urged principals to contact their REA representatives and voice their opposition to the fee change.
“I really hope that any principal who disagrees with these changes gets on the phone and speaks to their REA rep or a manager and says, ‘This doesn’t work for me’,” he said.
“As a community, we have the power to put pressure on them.”
To read Mr Charlaftis’ full comments regarding subscription costs click here.