Whether you are looking for a property manager or already have an agent looking after your investment, you would know that it is important to understand what fees you are being charged. What might be a little more unclear is what specific services (and quality of service delivery) these fees actually cover and the concrete cost breakdown.
Let’s uncover some of the key topics involved in getting to grips with your fees:
When shopping for an agency, it’s natural for most people to seek out the cheapest option. However, assessing value in real terms goes far beyond the surface and takes into account not only the specific inclusions but the level of experience and acumen behind the service delivery.
Unfortunately, sometimes when you pay peanuts you do get monkeys, and this situation is not something you want to risk when it comes to your real estate investment. After all, a large part of your financial future is in your property manager’s hands.
Look for confidence and competence in whoever is taking care of your hard-won property and/or portfolio. Also looking for a wealth of industry knowledge, years of experience and highly-developed interpersonal skills.
If you don’t have these vital elements at your disposal, choosing the cheapest agent may well cost you the most in the long run. In all cases, having an agent that understands your investment goal will far outweigh any cheap and cheerful alternative.
Management fees in Brisbane and West End range from 7% up to 12%. However, a standard management fee is only part of the picture.
You should keep in mind that the savings from the lower property management fee of 5% versus the higher fees of 8% could be as little as $10.00 per week or $500 a year. When you think about it, $500 over a year is a relatively insignificant sum in the grand scheme of things — especially if you forgo a lot of the things you actually really need.
What might those things look like? Well, poor management typically equates to an under rented property, additional weeks vacancy and maintenance not being attended to (resulting in damage). Plus, failure to full advantage of non-rent related income, like water usage reimbursements and depreciation tax benefits. You can see how that can easily add up to a lot more than your initial $500 worth of savings!
Property management is one of those services that is undervalued and usually underestimated. At Ray White West End, we take our property manager duties to you as a landlord very seriously. This is alongside balancing out our property manager responsibilities to tenants.
We can’t speak for other agencies, but we can let you know the tasks we undertake in our comprehensive and dedicated service offering via our West End office:
Your fees can be structured in a variety of ways. A property manager, for example, may charge a lower management fee but charge excessive additional fees, or a higher fully inclusive fee that is more cost-effective over the year.
Total Administration Fees can be broken down into a variety of components or services. Good property management companies usually include these components or services. However, some companies do not fully explain those services or provide the full benefits associated with those services to property owners.
There are also some services that are generally not included in the standard breakdown of fees but can be very important. It is critical that your new agent explain the fee structure to you so that you can make an informed decision about your investment.
Having an effective, productive and diligent agent will ensure that you are receiving the most from your investment property. This will also work towards increasing your overall return.
For example, having a Depreciation Schedule in place, claiming reimbursement of water charges from tenants where applicable, assessing and reducing risks, projecting future repair and renovation costs etc. All of these elements can add a considerable amount to your net investment return.
Do you want to learn more about what you should expect from your property management? Are you feel dissatisfied with your current agent? You might want to read our Guide To Changing Your Property Manager.
For more personalised advice from the experts in property management, do not hesitate to call the friendly team at Ray White West End on (07) 3844 4244. We are ready to go above and beyond your expectations, not only in terms of maximising your rental result, but also in offering tailored support, quality education/resources, and so much more!