Expanding your investment portfolio and becoming a landlord has required dedication, thorough planning and a number of unavoidable fees and charges. You've paid stamp duty, transfer fees, conveyancing costs and you're prepared to cover any property damage in a reasonable timeframe. But how much should a Property Manager cost? If you are like a majority of investors, you are focussed on getting the highest dollar value of rent per week possible. Sometimes this tunnel vision can cause landlords to overlook their property management expenses, causing them to pay more than they should. Who likes paying extra fees?
What does property management cost?
According to a 2017 study by BIS Oxford Economics average property management fees vary greatly in Australia. Canberra had the highest average property management fees compared to total rent with 11%, Sydney and Melbourne the equal lowest with 6.6% and Brisbane slightly higher with an average of 7.7%. The study also showed that regional areas have higher fees on average than a number of capital cities.
How do property managers work out their fees?
Further complicating matters are the many different ways agents will work out management fees. Some agencies charge a flat fee for their service, while the majority of agencies prefer to collect management fees as a percentage of rent received. Having management fees as a percentage of rent means there is less chance of a fee hike to keep up with inflation and there is more incentive for your agent to ensure that the weekly rent keeps pace with the local market.
What does great Property Management look like?
The level of inclusions and services will also vary greatly between property managers. Your property is a large capital investment and it is imperative that you find a property manager who will look after your property as if it were their own. Many agencies only include 2 or 3 inspections per year in their fees. Ensuring an agency inspects your property thoroughly every quarter and the condition is maintained and documented with photographs is one of the most important aspects of minimising repair costs over the long term. One of the most costly occurrences in property investment is the dreaded empty property between or before tenants. Picking a property manager with a large database and proactive marketing will ensure that your property remains occupied at all times. Some property managers have a large list of pre-approved tenants that are ready to go when a property becomes available. Having access to an agency with this type of program will save a lot of stress in the future.
Is there an all in one solution?
It can be difficult having multiple aspects of your finances and investments tied to different businesses and managers. Many people find that consolidating their financial and property investments into a single future strategy provides them with a more streamlined way of keeping their finger on the pulse of their financial health. Having an agency with expertise in financial planning, insurance, property management, self managed super funds and legal advice will provide you with the comfort of knowing you are looked after in all areas. Your Future Strategy takes a holistic view of your entire personalised situation which allows them to make comprehensive recommendations tailored to your exact needs.
Paying too much can mean a lot of different things when it comes to property management. Whether you are paying too much directly with fees of over 7% of your rental income, or paying indirectly by not having a property manager who is able to keep your property occupied or in good condition, you are doing yourself and investment a disservice. These extra costs may look smaller now, but over the course of your investment they can become quite substantial.
What does property management cost?
According to a 2017 study by BIS Oxford Economics average property management fees vary greatly in Australia. Canberra had the highest average property management fees compared to total rent with 11%, Sydney and Melbourne the equal lowest with 6.6% and Brisbane slightly higher with an average of 7.7%. The study also showed that regional areas have higher fees on average than a number of capital cities.
How do property managers work out their fees?
Further complicating matters are the many different ways agents will work out management fees. Some agencies charge a flat fee for their service, while the majority of agencies prefer to collect management fees as a percentage of rent received. Having management fees as a percentage of rent means there is less chance of a fee hike to keep up with inflation and there is more incentive for your agent to ensure that the weekly rent keeps pace with the local market.
What does great Property Management look like?
The level of inclusions and services will also vary greatly between property managers. Your property is a large capital investment and it is imperative that you find a property manager who will look after your property as if it were their own. Many agencies only include 2 or 3 inspections per year in their fees. Ensuring an agency inspects your property thoroughly every quarter and the condition is maintained and documented with photographs is one of the most important aspects of minimising repair costs over the long term. One of the most costly occurrences in property investment is the dreaded empty property between or before tenants. Picking a property manager with a large database and proactive marketing will ensure that your property remains occupied at all times. Some property managers have a large list of pre-approved tenants that are ready to go when a property becomes available. Having access to an agency with this type of program will save a lot of stress in the future.
Is there an all in one solution?
It can be difficult having multiple aspects of your finances and investments tied to different businesses and managers. Many people find that consolidating their financial and property investments into a single future strategy provides them with a more streamlined way of keeping their finger on the pulse of their financial health. Having an agency with expertise in financial planning, insurance, property management, self managed super funds and legal advice will provide you with the comfort of knowing you are looked after in all areas. Your Future Strategy takes a holistic view of your entire personalised situation which allows them to make comprehensive recommendations tailored to your exact needs.
Paying too much can mean a lot of different things when it comes to property management. Whether you are paying too much directly with fees of over 7% of your rental income, or paying indirectly by not having a property manager who is able to keep your property occupied or in good condition, you are doing yourself and investment a disservice. These extra costs may look smaller now, but over the course of your investment they can become quite substantial.
