Perth Property Management Fees Explained
The #1 question in Property Management: How much will Property Management fees cost me?
For property owners, it can be difficult to assess how much reliable Perth property management should cost, as fees and charges vary from one company to the next.
In this guide, we’ll walk you through a complete breakdown of the fees most property managers charge in Perth, as well as the average estimates for them. We will also help you calculate how much you would expect to pay for a property manager.
Register your interest below, for HERE Property’s management fee schedule.
What does a good property manager do?
As a landlord, managing your investment property yourself can be very time-consuming and stressful. Also, if you’re new to the market, you may lack the necessary expertise required to deal with tenants, determine your rent prices, draft agreements, maintain landlord compliance and more.
Property managers take the whole process off your plate and manage the property for you.
While there could be dozens of real estate agencies that offer property management services in your local area, not all of them will offer the same level of service.
Generally, the duties and responsibilities that a good property manager will handle include:
- Determining the accurate rental value of your property
- Create engaging rental advertising campaigns to maximise the pool of prospective tenants
- Inspecting the property regularly and updating you on its condition with recommendations to maintain asset value
- Ensuring that rent is always paid on time
- Organising cost effective trades to perform repairs and maintenance duties on the property
- Liaising with the tenants to deal with any complaints or issues that may arise
- Dealing with difficult tenants, including guiding you through the eviction process and facilitating insurance claims, if necessary
- Maintain low vacancy rates across your portfolio by retaining quality tenants
Many property managers will also give you a free rental appraisal that considers the property’s condition and location to match its rent price with the market.
Ongoing Rental Property Management Fees
The ongoing property management fee is the main fee you pay to the property manager and is the meat of your contract. It’s usually based on the gross weekly rental amount and the average property management fees in Perth currently range from 8.5% to 10% of the rent price.
Some property managers charge a flat fee regardless of the amount of rent received. However, this is more common in other cities than in Perth, but the flat fee model has witnessed a noticeable growth in popularity in recent years.
On a side note, keep in mind that property managers that charge a percentage fee, plus items on occurrence ,tend to be more experienced and better resourced, and will provide you with a more personalised service.
As it is one of the larger real estate management fees you pay, ensure you consider the stability and experience of the property management team and the company’s operational systems. The management fee covers the day-to-day management tasks of your property manager such as:
- collecting, processing, and disbursing rent
- advising the owner of relevant matters
- liaising with tenants and maintaining positive tenant living experiences
- connecting to third party or related property services of insurances, tax and finance
- pursuing late rent and invoice payments
- managing processes for rent arrears
- organising maintenance and quotes
- ensuring compliance with relevant tenancy and safety-oriented legislation
Letting or Leasing Fees
The letting fee (or leasing fee) is applied when a property management company must find a new tenant for your property. Letting and leasing fees in Perth are usually two weeks’ rent plus GST or 2.2 weeks’ rent.
The charge covers the cost of finding and securing a tenant for a vacant property and includes:
- an assessment of the rental value
- conducting inspections with prospective tenants
- screening and processing applications
- lease execution
- bond processing and lodgement
At HERE Property the fee also includes orientation interviews with the tenant to advise them of their rights and responsibilities, an explanation of the lease in detail, and signing of all necessary paperwork to ensure legislative compliance.
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Lease Renewal Fee
One of the most important roles of your property manager is to keep it occupied at a fair negotiated market rent. When the current lease on your property is due to expire your property manager should implement a proactive plan that assesses the market conditions at the time and negotiate lease terms to ensure that your property remains tenanted so that you can receive an uninterrupted rental income stream.
Top Perth property managers usually charge around 1-week’s rent plus GST or 1.1 weeks’ rent and commence the lease renewal process three months ahead of the lease expiry.
Routine Inspection Fees
Regular and thorough inspections prevent minor issues from becoming major problems. Routine inspections monitor the well-being of your property, and tenant safety and document how the tenant is caring for the property as well as identify any required maintenance.
At HERE Property we carry out the first inspections around 6 weeks after a tenant takes occupancy. This acts as an early check for any issues a tenant may need to be warned of and is then set at three monthly intervals for the term of the tenancy. Further, if frequent inspections aren’t conducted, this can void your Landlord insurance policy.
The Residential Tenancies Act allows a maximum of four routine inspections each year and fees can range from $77 to $99.
Marketing and Online Advertising
The internet is the most successful way to advertise a vacant property. Each advertisement consists of photographs and descriptive information about your property.
Your Property Manager should place your property on all major real estate websites, write an eye-catching advertisement for your property and organise professional photos to maximise your chance of renting the property as fast as possible.
Top agencies should offer additional options such as professional photography, virtual styling, 3D virtual tours, feature listings, and signboards.
Property Condition Report
The Property Condition Report comprehensively details the condition of your property at the commencement of each tenancy.
This is an important document that acts as the basis for bond disposal at the end of the tenancy. In cases where there are disputes, this document acts as the most reliable piece of evidence submissible in possible court proceedings. Because it is a legally required document it should be provided to the tenant in a prescribed format within 7 days of the tenancy commencement.
Pricing ranges from $250 to $495 and can vary based on the size of your property, gardens, and level of furnishings included.
At HERE, we add more details than required by legislation, as well as take many photographs that can act as evidence. There is a negotiation phase at the start and eventual end of a tenancy to promote tenant acceptance of these reports.
Final Inspection and Outgoing Bond
An inspection is conducted when the tenant vacates the property and is used to finalise the disbursement of the bond based on the outcome of the inspection. This inspection is carried out against the ongoing condition report and is required to decide whether any damages or cleaning need to be charged from the tenants’ bond.
During this comprehensive inspection, the property manager will carefully compare the state of the property to the original Property Condition Report, noting wear and tear, maintenance items, any damage, and items requiring cleaning.
Tribunal Preparation Fee
Sometimes, evicting a tenant can be troublesome, leaving you no other choice but to go to the Tribunal. In that case, the property manager will charge you a Tribunal preparation fee that covers preparing the required documents for your case.
Property managers in Perth charge a monthly administration fee to cover ongoing costs such as management software and client portal subscriptions, physical admin (photocopying and postage) and phone calls and SMS with the owner, tenant, and maintenance contractors.
There are other fees or ancillary costs that may come up during the course of management when certain incidents arise, or you request these additional items. It’s important to check if these are covered or add to your existing fees.
- Signboards, virtual tours, professional photography, and upgraded feature listings when leasing;
- Database and credit checks when processing applications;
- Higher management fees and an inventory report on furnished properties;
- Title and document searches;
- Court fees; and
- Insurance claims.
How to Calculate Property Management Costs
Alright, that was a lot to digest. To make it easier for you to calculate the estimated Perth management fees for your property, let’s take a look at a quick example.
Let’s assume you own a property in Perth that you’re currently renting at $470 per week, and you decide to work with a property manager that charges a management fee of 9%. Here’s how you can calculate the management fees for your property:
Property management fees:
(9% of $470 per week) x 52 weeks = $2,200
Property leasing fees:
Leasing fees (two week’s rent) = $470 x 2 = $940
Property marketing fees (flat rate) = $320
Lease renewal fee (one week’s rent) = $470
Monthly admin fees ($10 x 12 months) = $120
Annual statement fee (flat rate) = $50
The total amount of money you’d expect to pay here is roughly $4,100/year.
Of course, this is just a rough estimate, and the total amount you’ll have to pay may vary depending on the property manager you choose and the frequency of reletting. You should also keep in mind that your property manager may adjust your rent to match it with market rates. In that case, fees like lease renewal fees and leasing fees may change.
Nevertheless, you can use the provided example as a guide when negotiating with a prospective property manager. It might also be a good idea to compare property management fees across multiple property managers and opt for the manager with the lowest historical (5 year) vacancy rates, which will point to less annual vacancy as well as strong tenant retention.
Why It’s Important To Research Perth Property Management Companies and Fees
When you are searching for the right Perth property management agency to partner with, you need to have a solid understanding of what fees will be involved. Not all companies are structured the same, so these guidelines may present themselves in other ways like flat-rate services.
Make sure you do your research and understand which property services are covered in your contract and if the property management agency uses highly qualified repairmen and agents to handle your property. You don’t want to be overpaying for bad work and careless managers who let your property fall apart.
All things considered, the best Perth property management company to hire is the one that gives you the highest and best net return and keeps your investment in top shape. Saving a few dollars may look attractive at the outset, but if it should cost you vacancy or repair, then it’s never worthwhile.
It’s also a good idea to ask these questions to your prospective property manager before signing a contract:
- How long have you been in the Perth property market?
- How many properties do you currently manage?
- How do you market rental properties and screen prospective tenants?
- Can you give me a complete breakdown of all the fees you charge?
- How often will you have to contact me?
- How do you handle unresponsive tenants that don’t pay their rent on time?
- How do you handle repair requests?
- What is your historical vacancy rate
- What systems does your agency use to streamline daily operations?