When it comes to managing your property, one big thing to consider is how much it’s going to cost you. Sure, going for the cheapest option might seem like a smart move, but sometimes, you end up paying more in the long run. Let’s break it down.

Understanding Management Fees

Every property management agencies has its own set of fees. In Townsville, most property management agencies offer the same fee structure, such as a management fee, a letting fee for finding tenants, an advertising fee and other random charges.

It usually looks a little something like this:

  • Management Fee: % of weekly rent amount, collected from rent monies received while managing the property (Annual cost = fee x 52 weeks per year)
  • Letting Fee: % of weekly rent amount, charged only when a new tenancy is secured (tenant vacates and new tenant moves in). If there is currently a tenancy in place, this fee is not required until they vacate and a new tenancy is secured. (Annual cost = dependant on vacancy frequency)
  • Advertising Fee: charged in addition to the Letting Fee, to cover costs to advertise the property online via property management platforms and social media. (Annual cost = dependant on vacancy frequency)
  • Lease Renewal Fee: % of weekly rent amount, generated when lease expires and is renewed with current tenant (Annual Cost = 1-2 x per year, depending on lease length).
  • Administration/Technology Fee: a monthly fee that is charged to cover administrative tasks such as monthly disbursements (Annual cost = fee x 12 months per year)
  • EOFY Statement Fee: annual fee to distribute your EOFY Statement
  • Other/Miscellaneous: some agents may also charge fees such as:
    • Title Search: costs incurred to validate ownership of the property
    • End of Management/Termination Fee: a ‘file closing fee’ if you decide to transfer the management of the property to another agency.
    • Maintenance Fees: additional fees for additional quote requests, insurance claims or managing renovation works needed at the property
    • Inspection Fee: fee per attendance to the property to complete a routine inspection, or other inspections needed.
    • Setup Fee: to set up your file in preparation of the management of your property.

Look Past the Base Line

When comparing agencies and their fees, don’t just factor in their Management Fee, Letting Fee and Advertising Fee. These fees are typically lowered in order to coax in new managements and appear competitive in the market, however the other fees and charges are the ones that add up!

Beneath the veneer of attractive pricing lie hidden costs and obscure fine print clauses that could catch unsuspecting landlords off guard. Unforeseen charges, penalty fees, and optional add-ons are just a few examples of lurking expenses that could inflate the total cost of property management services.

How much is 1-2% difference really saving you? Choosing an Agent who has a lower management fee, but has a slew of additional charges in comparison to an Agent who has a higher management fee and no additional charges, may end up saving you over the year/long term.

Personally, I like to keep my Management Fee Structure simple and transparent by utilising an Inclusive Fee Structure. I have a Management Fee and a Letting Fee – that’s it! Everything relating to the management of a property is covered under those two fees.

Balancing Cost with Value

It’s not always about going for the cheapest option. Sometimes, paying a bit more gets you better service and saves you headaches down the road.

As Landlords strive to strike the perfect balance between cost and value, prioritising quality over cost-cutting becomes paramount. By identifying areas where savings can be made without compromising service quality, Landlords can maximise the return on investment and foster sustainable property management practices.

Don’t rush into picking a property management company based solely on price. Take your time, read the fine print, and think about the long-term impact. Your investment is worth it.

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Meraki Property Management