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Understanding Property Management Fees

By Luke O'Kelly

When engaging a Property Manager for your property in Brisbane there are many things to consider. One part of the decision-making process focuses on the property management fees and charges. The other part is the expertise and industry knowledge that comes by engaging with the right Agent.

Usually Landlord tend to focus on the lowest Management Fees without considering long term benefits.

The savings from lower Property Management Fees of 5% compared to 7.5% fees could be only $10 p.w or $500 over a year.

However an under rented property, additional weeks vacancy, maintenance not being attended to resulting in damage, not taking full advantage of non-rent related income like water usage reimbursements and depreciation tax benefits can cost a lot more than $500 saving.

Hence the need to get detailed understanding of what are the Property management fees, its breakdown and the importance of finding the right property manager.


Management Fees Vs The Right Property Management Company

The right property manager can add value to your property. Improving returns is not just about increasing rental values. It is about:

  • reducing vacancy
  • minimising unnecessary expenses
  • ensuring that all income avenues are explored including property depreciation and tax benefits.

Total Management Fees associated with property management can be broken down into many different components or services. Usually these components or services are included by good property management companies. Some companies however, do not fully explain those services or give fullest advantages associated with those services to the property owners. Their are also some services which are generally not included in standard breakdown of management fees but can be very important.

A property manager might charge a lower headline property management fee, but charge excessive additional fees or have a higher fully inclusive management fee that is more cost effective over the year.

The other important consideration is the value added by the right property manager and the costs associated with a poor agent.

“If a property manager does not have a strict arrears management policy, does not complete regular inspections; the cost of a tenant doing damage, owing rent or an extended vacancy can cost considerably more than any saving you receive by the reduced management fees.”

Therefore, having an effective Agent will ensure that you are receiving the most from your investment property and 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 can add to considerable amount to your net investment return.


Property Management fees as understood by an Ideal Property Management Company.

Property Management is one of those services that is undervalued and usually under estimated. An ideal Property Management Company understands what is involved in successfully managing a property and do what is necessary to not only increase return, minimise expenses but also minimise the risk associated with owning an investment property.

The fees involved with Property Management include, but are not limited to:

  • ManagementFee
  • Let Fee
  • Lease Renewal Fee
  • Disbursement Fees
  • Other Fees

Management Fee – Rent Collection Fee

The Management Fee is usually calculated as a percentage of the total rental income collected or in some cases a fixed rate per week or annum. Many agents just see this fee as a rent collection fee. However, the management fee should cover all aspects of managing your property:

  • Rent Collection
  • Owner & Landlord Service
  • Risk Management Recommendations
  • Accounting & Invoice Payment
  • Maintenance Recommendations
  • Routine Property Inspections
  • Renovation/Refurbishments Recommendations
  • Insurance & Rent Protection Services
  • Water Usage Reimbursement
  • Tenants Management

Rent Collection
There is a lot more to Property Management than just rent collection. Management means Full Management, not just the collection of rent. Property underpins Australian wealth and the goal is to increase the value of your investment. That is the reason for investing, is it not?

Owner & Landlord Service
When engaging Asset Plus Property for your property in Brisbane you are assigned a Business Manager – a professional dedicated to your property needs and your individual requirements.

“If you own property in different areas of Brisbane, you no longer have to worry that you will be dealing with multiple property managers.
Your Business Manager will be your point of contact for all your property management needs. Simply one person focused on you, the client.”

Risk Management Recommendations
Like all investments, there is a risk involved. Therefore, it is important to have proven, tested processes and procedures in place to manage all aspects involved in the day to day administration of a rental property followed by the ability to deal with the unexpected. We know the importance of making sure the rent is in your account to pay the mortgage.

We ensure that we disburse rent at the middle and end of each month, if this day falls on a weekend or public holiday we disburse on the previous business day to ensure the rent is always in your account and there are no delays in the funds transfer between banks because of weekend or bank public holidays.

Accounting & Invoice Payment
Accounting is an important part of the Property Management service. Rent should be processed and reconciled on a daily basis. Surprisingly, this is not an industry standard process. By banking and reconciling daily we can ensure that the rent is up-to-date and follow up accordingly. It is important for us that arrears management is a daily task not a weekly or monthly occurrence.

All accounts are processed promptly, to ensure accounts are paid by the due date and no unnecessary overdue charges are incurred. You will always receive a scanned copy of any account paid on your behalf. This ensures you know what work was completed or approved expense incurred. It is also important for tax time, when you need a copy of all expenses.

Maintenance Recommendations
We will always run any anticipated expenses or maintenance past you, the Landlord, for approval to ensure you approve of the work being conducted and can manage cash flow accordingly. Many Landlords provide us with a working budget or maintenance limit. In these instances, we process maintenance under the terms approved and notify you of the work being completed.

Routine Property Inspections
Routine Inspections and reporting should be inclusive of your Management Fee. At Asset Plus Property, we inspect all properties on a regular basis, report back to our Landlords on the condition the property is being kept, and importantly any maintenance issues found.

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