Is it time to say goodbye to common fees for property management?
- October 25, 2018
Owning an investment property is a great way to build a nest egg for the future. But you don’t want to see that egg swallowed up by the many and varied fees it can cost you to manage your property. Understanding your management fees can make a big difference to your future returns.
What are management fees?
Management fees are the costs your property manager charges you for the service they provide. Fees are usually charged as a percentage of rents collected, and will vary depending on your property manager. On average you can expect to pay 7% of rent.
What other costs are there?
On top of the management fee, you might also be charged a range of other common fees. These can be charged as a flat fee or based on the rents collected. Average common fees you can expect to pay include:
- Letting Fees – 1.5 weeks rent
- Internet Marketing Fees – $300
- Lease Renewal Fees – 1 weeks rent
- Lease Preparation Fees – $55
- Monthly Admin Fees – $11.50
- Annual Statement Fees – $55
- Professional Photos – $150
- Signboard – $99
- NCAT Fees – $110 per hour/$260 flat fee plus costs.
The real cost of management fees
Let’s look at the fees in real terms. Based on an average rent of $550 per week for a Sydney apartment, and a management of 7%, a traditional property management agency will charge $167.29 per month. Add to that all the other fees and charges and, based on the property being leased out to new tenants once during that year, you’re looking at $4,439.50 in fees during that year. That’s over 8 weeks’ worth of rental income you’ll never see.
Pay less, get more with :Different
At :Different, our fees are not based on your rental income, so you can say goodbye to common fees and keep more money in your pocket. We charge an all-inclusive flat fee of $100 per month including GST. A fee that covers [LV2] maintenance, liaising with tenants, inspections and everything else. In addition, as part your management fee, you also receive free landlord insurance and our exclusive rent guarantee for your first year, and at a discounted price thereafter.
If you need to find new tenants, you’ll be charged a flat $500 leasing fee and $500 marketing fee to cover premium advertising, signage, professional photography and virtual staging as needed. So for that same average Sydney apartment – or any other investment property you have – your annual cost would be $2,200 (and just $1,200 if you didn’t need to find new tenants in that year).
In other words, if you were the owner of our example property, you would save $2,239.50 in that given year (including leasing fees) or the equivalent of almost a month (over 28 days) of rental income. PLUS you would have full visibility of all transactions through your personalised online portal.
Want to know how much you could be saving? Just use our savings calculator to find out how much more you could have in your pocket each year.
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