Property management fees, what should you be paying?

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Many property investors choose to manage their rentals themselves to save on property management fees.

However, being a landlord can be time-consuming and demanding. Hiring a property manager can reduce the stress of having an investment property, and the good news is that most of the time property management fees are tax-deductible.

What does a property manager do?

Property managers are trained for the job. They deal with landlords and tenants daily, which gives them a wealth of experience they can use to guide investors on how to make the most of their rental property.

They can help establish the current rental value of a property, advertise to renters and screen potential tenants.

Property managers have connections with local tradespeople and are familiar with the rules and regulations surrounding the running of a rental property.

If anything goes wrong, having a good property manager on your side will ease the stress of a difficult situation. They know how to deal with the most common tenant-related problems (such as neighbour complaints, property damage or missing rents) and can pick up warning signs to prevent future problems.

If the worst-case scenario was going to happen, they can guide you through the court system and eviction process.

What are the average property management fees in Australia?

Property management fees in Australia will vary depending on where you live and the agency you decide to use.

As a general rule, you can expect to pay a commission of between 6% and 11% of your weekly rent plus GST.

Bear in mind, however, that the lower the commission charged by your agent, the fewer services likely to be included as part of your package.

Before selecting a property manager, it is important to figure out exactly what is included in the property management fee, and which costs would be charged separately.

Average property management fees per area:

Property management Brisbane: 8.5% to 9.9%

Property management in Brisbane is often split into two separate fees; a rent collection fee and a management fee. The letting fee is normally 1-2 weeks rent.

Property management Adelaide: 9% to 11%

Property management in Adelaide is normally charged as a commission of the rental income. Some property managers can charge extras for tasks such as inspections. Some agencies may even add a mark-up to the bills of tradespeople they hire for repairs. The average letting fee is normally 2 weeks rent.

Property management Sunshine Coast: 6.5% to 7.5%

You can find both flat and percentage-based models for property management in the Sunshine Coast. The letting fee is normally 1-2 weeks rent.

Wondering how property management fees in Australia compare to other countries? You can read our article providing an overview of the property management markets in the U.S, New Zealand, Canada, and the U.K.

What types of property management fees can you expect?

Management fee

This covers the day-to-day activities that are performed by a property manager, and are usually covered by the commission charged on the weekly rent. These tasks can include:

  • Collection of rent
  • Organising repairs and maintenance
  • Point of contact for tenants requests
  • Dealing with complaints from the tenant or about the tenant (e.g from a neighbour)
  • Disbursement of the bonds
  • Attending to the payment of council rates
  • Liaising with the body corporate if applicable
  • Organising water readings

property management fees

Letting fee

This fee is normally charged to cover for everything that is involved with sourcing for a new tenant, such as private and open viewings, references checks, drawing up legal documents, collecting the bond and lodging it with RTVB.

Marketing fees

This can include listing the property on online portals, professional photography, and erecting a sign.

Admin fees

Some agencies charge a monthly fee to cover general admin related costs which typically ranges from $5 to $10 per month.

Other admin-related fees can include:

  • Tenancy database checks: usually $12 per person.
  • Lease transfer fee: up to $500.
  • Dealing with insurance claims: typically from $100 to $150.

Lease renewal fee

Most tenants sign a one-year lease agreement, and at the end of this period, they are given the option to extend the contract.  The lease renewal fee covers the work your property manager will have to do to get the extension organised. This is often charged as a percentage of the annual rental return but can sometimes also be charged as a separate fee of $25 to $100.

Routine inspection fees

Routine inspections are key to protect and maintain your investment property. Your property manager may charge a fee every time they do a routine check.

You can read our article on property inspections to find out more about what rental managers should be doing as they check a property.

Annual Statement fee

This fee is charged to obtain your annual summary statement, which can cost $25 to $50.

Civil and Administrative Tribunal fees

If you need to take a tenant to court, your property manager may charge you additional fees to cover court preparation and travel costs. This is usually charged on an hourly rate.

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