Managing a property involves a range of activities so it is important you understand how the property manager is charging and what fees are being charged for each service.
The standard property management fee is a % of the rent of your property. This tends to be between 7% to 8.5%, but could be more or less depending on what is or isn’t included in the fee. Some agents will unbundle all the various elements and charge for these separately, in which case you would expect the base % to be lower.
Other fees that are commonly charged, but sometimes can be included in the management fee, include:
- Letting Fees (is this your cost or the tenants?)
- Inspection Fees – usually charged per inspection
- Rent Review Fees
- Repair and Maintenance Fees
- Administration Fees
- Tenancy Tribunal Fees
- Marketing Fees
- Tenant Credit Check Fees
- Tenant Reference Check Fees
- Fees for paying accounts (Rates / Insurance etc)
- Monthly Statement Costs
As you can see it is important you understand before signing up to a property manager what all the fees are. If the proposal you get isn’t clear you should ask for clarification so you can accurately compare property management companies.
Further to fees we also recommend you check to see if there is a property management contract term – Usually these are a minimum 12 months.
As the property management industry is not regulated we recommend you make sure the property management company you engage keeps all client money (your money) in an audited trust bank account, to make sure your money is safe-guarded in the event the property management company fails financially.