Interested to know or would you like a better understanding of property management fees including letting fee? Please understand that every real estate agent charges different fees, however we will outline most of the associated costs with property management.
What are the costs for finding a new tenant? There is the cost to advertise the property on the internet, this may be anywhere from $200 to $500. You also may choose to take professional photography, this could be around $200. A real estate agent charges a fee for finding a new tenant which is called a “letting fee” and this is normally dependent on the length of lease and the weekly rental amount. So the letting fee could be anywhere from 1.1 (incl GST) to 2.2 (incl GST) of the week’s rental. Say for instance your property is $700 per week and your agreement with the the real estate agent is that they receive 1.65 (incl GST) weeks rent for leasing your property. Therefore the calculation is 700 * 1.65, so the letting fee is $1,155. You may also have to pay a lease preparation fee which is normally $33.
What happens if the tenant has been living in the property and wants to sign a new lease? Most agents will not charge a letting fee, however they may charge a fee for preparing the lease (see above).
What are the ongoing management fees? Again this will be dependent on the weekly rental and the number of properties you ask the real estate agent to manage for you. Normally property management fees in Sydney range from 4.4% (incl GST) to 6.6% (incl GST), on the total monies collected. Say for instance you have an agreement with your real estate agent at 5.5% (incl GST) and your tenant pays $700 per week. Say during the month the tenant paid 4 weeks rent. Therefore the calculation is 700 (weekly rent) * 4 (number of weeks the tenant paid rent) = 2,800 (amount of rent paid during the month). Then to work out the management fee, its 2,800 (amount of rent paid during the month) * 5.5% (management fee) = 154. So in this instance the management fee for the month is $154.
Our office realises that not every property requires the same level of management and we offer 2 property management packages. We have a cost saver package which is lower than the normal range indicated above and a peace of mind package which is higher.
Are there any other fees or charges with managing a property? Again this is dependent on the real estate agent. Some agents will charge for carrying out an inspection, providing an end of financial year summary, attending a tribunal if there is a tenant dispute and may be some other charges.
Our cost saver packages doesn’t have any added charges, except if we are required to attend the tribunal.
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