Do you have a property in the Sydney area that you would like to rent or lease? If so, you may be considering getting a real estate agent or property manager to help you manage the property. RealConnect provides a simple and effective way to find & compare local property managers. We provide quotes from multiple real estate agencies to help you find the best property manager in Sydney to rent your property, or to provide a free rental appraisal. Of course, there is the option to manage your rental property yourself but you should not underestimate the amount of time and energy it takes to manage a property effectively.
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Your property is valuable (perhaps it is an investment property) so you want it to be well looked after but you also don’t want to be paying excessively for the service because obviously this will affect the return on your investment.
So, how do you find the right property manager and how much can you expect to pay for the service? Let’s find out.
When selecting a property manager, you firstly need to ensure that they are going to deal with all the tasks mentioned above. But there are also other considerations because not all property managers offer the same services. There are also differences in the way they charge. It is therefore very important to consider and compare a number of different property managers before making up your mind.
Finding property managers so that you can compare what they have to offer is what we do at RealConnect – and it is a service that will cost you nothing at all. RealConnect will provide proposals from a number of property managers that operate in your area for you to consider. The great thing about going this route is that all these property managers will now be competing for your business by submitting proposals to you. This enables you to take a closer look at what they are offering so that you can make an informed decision.
Before taking on a property manager you need to meet and talk to them. Here are some questions
you might consider asking:
This last point is obviously very important and needs to be looked at in more detail. When you are speaking to property managers it is vital that they supply you with a detailed list of their fees including what is covered in their basic management fee and what services will attract an extra charge. When it comes to fees you need to read the fine print!
Before we look more specifically at property management fees in Sydney, it is important to understand some of the different ways that property managers charge for their services.
All of these costs can add up which is why it is important to ascertain which are included in the property manager’s basic management fee.
Now let’s look more specifically at the property management fees in Sydney.
In Sydney, property managers typically charge between 5% and 10% of the rent on your property. One source who claims to have recently canvassed over 200 Sydney property managers puts the average at 8.8%. Interestingly, the closer the property is to the CBD/metropolitan area the lower the fees. This is because the property prices are higher and there are more property managers competing for them. Conversely, the fees are higher in suburban, rural and regional Sydney where property values are lower.
Another point worth mentioning here is that property managers will often charge lower rates if you give them more properties to handle. For example:
Once again it is important to stress that some or all of these charges may be included in the basic management fee. But if that fee is low then it is likely that some of these costs will be charged separately.
This is another reminder that it does not always make sense to go with lowest management fee and always insist on a list of exactly which costs are covered.
One final word must go to a fairly new method of property management fee which is charging a flat fee rather than a fee based on a percentage of rental. Typically this fee could be $100 a month regardless of the amount of rent the tenant is paying. Some of the property managers who charge a flat fee do have additional charges so once again it is important to get a breakdown of the quote.
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For those new to the Noosa’s rental market, property managements fees can have so many hidden extras it can be difficult to keep track of them and know what they are all for. Which ones should you pay for? Which ones are just extra charges? These questions should be asked if you want to get the most out of your money and your rental return.
Here are some of the most common property management fees that you should know about:
In most instances, property management commission fees are a percentage taken off the total rental income of the property. It's perfectly normal for the agency to take the commission off the total rent that is collected from the tenants. Therefore, the forwarding balance already has the rental commission fee taken out of the balance before being sent to the owner.
These deductions are usually a percentage of the rent in total. In the Noosa area and around Queensland, the typical percentage rate is somewhere between 7 to 9 percent. These commission fees can be negotiated with the agency and reflect the services they include.
Letting fees constitute the work that property managers do in order to find the right tenant for the property. This includes the preparation of the letting documents for the new tenant and finding a tenant in the first place. One thing to keep in mind is that the letting fee may vary depending on the agreed length of stay written into the rental contract.
Fair Trading has defined the maximum allowable fees regarding property management fees, but the numbers could vary, depending on what was specified in the agreement. Letting fees are usually deducted from the first rental payment and is payable to the property manager once the rental contract is signed.
Lease Renewal Fee
A lease renewal fee may be charged by the property management if the current tenants agree to a lease renewal. This fee covers the costs associated with processing the lease papers. These fees can be deducted as either a percentage of the tenant's weekly rent, or as a one-time, fixed fee.
Property management agencies in and around Noosa may charge a nominal fee called "Administration fees" that you see every month on your statement. This fee covers costs associated with postage, phone calls and trust accounts.
End Of Year Financial Statement
This fee is charged at an agreed and fixed rate. It covers the preparation of the end of year financial tax statement.
The property management agency may see the need to advertise your property via print media or on the Internet in order to fill the tenancy. The advertising fee is usually charged at a fixed rate and depends on how the property is promoted and advertised.
Repairs and Maintenance Fee
Property management agencies may charge a maintenance and repair fee where needed. This type of fee is not added automatically – property owners should sign a written agreement defining such maintenance work and repairs. In this agreement you can define what sum is an acceptable amount to be authorised without approval. For instance, you may approve for the property managers to undertake necessary repairs for under $200 without approval. If the repairs are more substantial you may specify alternative instructions. This allows managers to act in the event that you are unavailable for approval or in the case of an emergency. Maintenance and repair fees are important as it ensures that your property is maintained and any issues are addressed, especially in the situation where it may compromise the safety of the tenant. Allowing these automatic repairs are very helpful if you aren't personally based in Noosa QLD as it allows you to get your property taken care of without travelling.
Holiday Accommodation Fee
Holiday accommodation fees may vary slightly from normal property management fees. As occupants may change more frequently, there may be additional fees or commissions as well as booking, cleaning and maintenance fees, depending on what is offered as part of the rental agreement and the terms and conditions.
We hope you found this information useful and don't forget if you need help connecting your rental property to the best property managers available, use RealConnect's free service to compare your local property managers.