A property manager’s fees usually cover sourcing quality tenants and managing your lease on a day-to-day basis. These costs are outlined in the management agreement between the property owner and the rental agency.
In most cases property management fees are usually charged as a percentage of the weekly rent.
The percentage differs in every state however In Queensland you can expect to pay between 7% and 12% of the weekly rent, depending on where your property is located. In Brisbane the average property management fee is approximately 9%.
What Types of Fees Can You Expect?
As the costs and inclusions can vary considerably it is important to understand a general fee structure and specifically what your rental agent has proposed. Fees may be payable for:
A fee collected by the property manager in return for sourcing a new tenant for your property. In Brisbane and QLD, this is generally equivalent to 1-2 weeks rent.
Tasks include organising inspections with prospective tenants, conducting rental checks for applications received, completing all necessary paperwork relating to the lease documents and lodging the bond with the necessary governing bodies in your state.
They will also complete an in-going inspection report to document the condition of the property at the commencement of the lease.
This covers the day-to-day activities required to manage the property. This is usually charged as a percentage of the weekly rent. Tasks may include:
- Collection of rent
- Repairs and maintenance
- Routine inspections (some property managers will charge an additional cost for this)
- Payment of council and water rates, body corporate levies and general maintenance
- Communication with the tenant, dealing with any complaints/ issues (including with strata)
- Disbursing of owner funds and owner statements
Administration fee used to be known as postage and petties or sundries fees. This is used as a contribution towards storing files and data for your property for up to 7 years and subscription costs.
Any costs associated with sourcing a new tenant, including but not limited to: internet (advertisement) online listing fees, signboards, professional photography etc.
Lease Renewal Fee
This may be applicable if your existing tenants are staying beyond the term of their initial lease and a new fixed term lease is to be signed.
Your property manager will represent you at tribunal if an issue has arisen and you need to take the tenant to court.
Annual Statement Fee
There is usually a small cost involved to provide you with your annual statement which covers all financials for that year.
Why Use A Property Manager?
Paying property management fees does decrease your return on your investment property, but do not underestimate the time that it takes to effectively manage a property or the importance of finding a quality tenant. Also good property manager should be able to save you money on costly maintenance and vacancies.
A property manager is trained to source quality tenants and the real estate agencies have policies and procedures in place to ensure that applicants are vetted properly by checking references and analysing financial statements.
Below is a brief list of some of the benefits of having a trained and experienced property manager manage your investment property:
- Advice in preparing the property for rent, to attract the right tenant at the right rent
- Thorough check and brief given for all rental applicants
- Lease preparation to protect your investment
- Collect rent and manage potential arrears
- Provide details rental statements mid and end of month
- Look after all your bills so come tax time everything is in one place
- Anytime online access to your information through our Landlord Portal
- Regular routine inspections and detailed reports
- Access to quality tradespeople for repairs
- Will manage access and supervision to the property for repairs and maintenance
- Understand the performance of the current rental market, and knowledge of when to increase rents
- With a database of tenants, they can reduce your vacancy rate when tenants move out
Paying for Quality Over Quantity
Some agencies may be able to offer you 5.5% management fee, however they usually perform less of the tasks or don’t have the programs or knowledge required to perform tasks as efficiently or effectively.
Comparing a Hyundai car to a Rolls Royce car can help explain why it’s worth paying a higher property management fee for your investment property.
A Hyundai car may be reliable and efficient, but it doesn’t come with the same level of luxury, prestige, and attention to detail as a Rolls Royce car. Similarly, a cheaper property management company may provide basic services such as rent collection and maintenance, but they may not offer the same level of expertise, communication, and personalized attention as a higher-end property management company.
By paying a higher property management fee, you can expect a more sophisticated and comprehensive management service that includes detailed property inspections, high-quality tenant screening, proactive maintenance, and effective communication with both you and your tenants. Just like investing in a Rolls Royce car, paying for a premium property management service can ultimately result in greater peace of mind and long-term value for your investment property.
So if you’re looking for a Rolls Royce service, contact us today! My contact details are 0403 247 421 or email@example.com.