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Property Management Fees

What are Your Property Management Fees?

One of the most frequently asked questions we are asked by landlords is “how much are your property management fees?”. Our team at Harcourts Scenic is dedicated and focused on taking the worry out of investment property ownership. An investment property that is not managed effectively leaves you exposed to unnecessary risks and costs which could affect your bottom dollar. We have compiled some additional questions to ask when enquiring about the management of your investment:

 

  • Do you hand out keys to prospective tenants?
  • How will the property be marketed whilst vacant?
  • What is involved in your tenant selection process?
  • What procedural systems do you have in place?
  • What is your policy on managing arrears?
  • How will my repairs and maintenance be handled?
  • How often will my property be inspected?
  • When do you carry out rent reviews?
  • How many properties does each Property Manager look after?

 

Management Fees

Property management fees, including the rent collection commission

Most agencies charge property management fees between 7.5% to 12% plus GST for the management fee, including the rent collection commission. It’s integral that you understand what services are included in this rate, without knowing this you cannot determine who is providing the best value and knowledge.

There are agencies who charge either a fixed annual fee or less than 7.5% to manage your property. To run an effective property management agency and to maintain a high level of service, we are unsure of how these business models are sustainable.

 

When engaging a discounted agency to manage your investment, we find that the entry condition reports are not detailed enough to protect landlords when their tenant vacates, this could leave you out of pocket for a figure far greater than the initial savings in property management fees. We also find agencies with discounted property management fees put their property managers under enormous pressure, managing many more than 140 properties. This means less care and due diligence, consequently resulting in poor management of your investment property. Quite simply, poor management costs the landlord money.

 

Common Property Management Fees

Letting commission

In Queensland, a letting commission is also referred to as the either the letting fee or let fee. This is the fee to the investor for the letting service of the premises. Agencies are able to charge any amount for this fee, which generally ranges from one to two week’s rent plus GST.

 

Other common property management fees include:

  • Tribunal representation fee – representing the investor in the Queensland Civil and Administrative Tribunal (QCAT)
  • Lease renewal fee – conducting a rental appraisal, negotiating with the tenants on the landlord’s behalf to secure further fixed term agreement & preparation of a new General Tenancy Agreement.
  • Administration fee – this is also referred to as a sundries fee. This includes payment of accounts, mid-month and end of month processing
  • End of financial year statement fee – a summary of expenses & income from the financial year to assist with your tax return
  • Periodic/routine inspection fee – a fee for the agent to carry out an inspection of the property during a tenancy.

 

The following common expenses may be included in the management agreement:

  • Title search, at cost
  • QCAT lodgement charge, at cost
  • Body corporate searches and other searches required, at cost.
  • Advertising and marketing costs
  • Change of Shared Tenancy Costs (for compensation by the tenants)

 

Compare Property Management Fees

We have prepared a table which shows standard weekly, tax deductible, management fees including GST to assist in comparing the costs of an agency’s fees. The difference between a high-quality agency and a cut price agency could be less than the cost of a coffee a week.

 

Harcourts Scenic Property Management Fees

As an investor we understand your primary objective is to maximise income and optimise capital growth on your investment property. At Harcourts Scenic, we understand the value of your investment property and the time required to successfully manage it. We have adopted modern and innovative concepts to exceed our clients’ expectations of service, keeping our landlords up to date with the market and how their investment is positioned in the current market.

As part of our service to you, we conduct rent reviews when a tenant is vacating and when a tenancy agreement is coming up for renewal. At Harcourts Scenic we don’t just focus on managing the property, we focus on managing your asset.

Harcourts Scenic’s professional experience and diligence not only ensure you receive high rental returns, but also secure quality tenants. We focus on maximising your return on investment to ensure you reach your property investment goals.

Our dedicated team receive ongoing training and mentoring. We are constantly tweaking and improving our service based on conducting regular client surveys to ensure that we keep delivering a high level of service that we would expect to receive with our own investment properties.