If you are interested in property investment, you’re probably used to the words ‘property management fees’ being tossed around.
What do these fees actually cover though?
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What is property management?
Property management is important with any investing endeavor for a multitude of reasons. For one, who’s going to do all the paperwork that you don’t want to do?
On a serious note, property managers are the people who make sure that a property is not vacant for too long, confirm that landlords are carrying out their side of the deal for legal purposes, give beneficial advice about potential renovations, and oversee the entire length of tenancy.
A good property manager will maximise the investment all while minimising the risk. This means that allocating a good portion of your budget to a property manager and a management fee is more necessary than not.
There are generally three levels of the services property managers are supposed to provide: a traditional management and letting fee, a flat fee for services, and an all-inclusive management fee.
You may be wondering: what is a letting fee? These kinds of fees focus on the costs associated with negotiations and the arrangement of an operating lease.
How much are property management fees?
Below you can find the percentage of weekly rent that can be charged by a property manager. The question of ‘how much are property managing fees’ can be answered depending on the state you live in.
| Metro Average | Regional Average | |
| New South Wales | 5-8% | 5-12% |
| Queensland | 9% | 7-12% |
| South Australia | 9-15% | 9-11% |
| Western Australia | 8.5-11% | 11%+ |
| Victoria | 5-10% | 6% |
| Northern Territory | 5-10% | 5-10% |
| Tasmania | 5-10% | 5-10% |
| Australian Capital Territory | 6-8% | 8%+ |
What do property management fees cover?
Now that we have answered the question ‘what is property management,’ we can now look at what all is covered by paying property management fees.
There are many things that a property manager must do for a landlord. These responsibilities and how well they are carried out depends on the property manager, of course.
Because of this, a variety of factors can affect how much you are charged.
The umbrella of property management fees includes advertising the property that is up for rent and further managing and attending viewings for the rental property.
They also have to screen tenants, which includes analysing rental history and doing reference checks. If you find that there is a delay in the process, this is the step that may be the cause of it. Rental applications can be lost in translation occasionally.
Property managers are responsible for managing a bunch of things. It’s in the name, after all!
They have to manage the condition report process, financial accounts for the investment property while also having to provide regular reports, and even the tenancy agreement signing process.
Property managers should also inspect the property as well as organize tradespeople, along with the landlord, for all necessary repairs and maintenance.
Choosing the right property manager
Because they are the spearheads for the majority of the process, hiring the right property manager can be a fairly important aspect of the success of your investment.
A good place to get started is the property manager directory. There, you can find a list of companies that are hoping to fulfill your exact wishes.
You’ll find the highest-rated professionals that are in your area, which you can compare to see who would work best for you.
Although property management fees can add up in the end, you should prioritise a property manager with who you can connect with that will understand your wants and needs. This is your investment, so you should find someone who will put you first for utmost success.
Contacting a company or person that you feel will accomplish your goal is not difficult. Most Australian property managers can be accessed via telephone, e-mail, or in-office. The first step is reducing the noise and finding who you need.
Benefits of a property manager
If you are still intimidated by potential property management fees overwhelming you in the process, it is important to remember the necessity of property managers.
The main purpose of a property manager is to find an expert who will be able to maximise your investment and minimise your risk. No matter how much research and time you dedicate to figuring things out for yourself, there are people out there who know the market inside and out.
Having a person like this on your side when pursuing property investment will allow you a greater scope of the market and give you the best asking price for rent. With knowledge of the current market along with popular trends, property managers can be your best friend through a process such as this one.
They can also help with ensuring that landlords are fully compliant. Since property managers also need to have substantial knowledge of the ever-changing legislative landscape, they will be able to catch any unfairness if it arises.
If one of your major concerns is maintenance and repairs, your property manager should be well-versed when it comes to local, reputable tradespeople that are in your area. This way, any possible repairs or maintenance can be taken care of in a cost-effective, efficient manner.
As a landlord, you have to focus on the intricacies of their own jobs, which is where property managers can lessen the load. By coordinating with landlords on maintenance and repairs, everyone will experience a lot less stress.
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