Brisbane Property Management Fees
Having trouble understanding Brisbane Property Management Fees ? Industry lingo is very normal to us as property managers but this can sometimes be forgotten when landlords are seeing charges on their statements.
Property management as a profession and service has come a long way in the past 20 years. Many believe it is simply ensuring the rent is collected and the tenants are not destroying the property, however that is far from the truth today. Education and skill-sets are required to properly manage an investment and this in turn results in a cost that is not as simple as a commission on the weekly rent. Property managers today need to be up to date with changing legislation, sales people when the property is vacant, ensuring that the tenant is happy with changing market conditions, following the correct procedures when it comes to a concluding lease, liaising with body corporate and much more.
To fully understand the fees and charges typically charged I have broken them down below.
This is a percentage of the weekly rent and the most widely charged fee in the industry. This fee is the main cost of your property management service and almost every agency charges it. In some states this can be up to 13% but generally in Brisbane these fees range from 7.5%-10% (plus GST) .
This is charged when a property has become vacant and a new tenant has been found. It is charged due to the large amount of time and effort that is required when finding a new tenant, background checks, entry condition reports etc as well as the marketing that is involved.
This fee is charged when the property’s lease has expired however the tenants in place will be signing a new lease. This requires a large amount of liasing with the owner and tenants from 2-months prior (to keep in line with legislative requirements) and ensuring that the new lease is active when the existing lease expires.
This is charged on an annual or monthly basis and is to cover bank fees incurred from tenants paying rent, trust accounting, monthly and annual statement preparation, postal costs and various other expenses.
Inventory Management Fee:
A fixed fee that is charged for furnished properties that require an inventory to be prepared and catalogued as well as the management of the items to ensure broken or stolen items are replaced.
Usually a fixed cost that is charged with agencies is a marketing expense and this is charged when a property is vacant to counteract the costs involved with placing your property on the various web portals and sites. Bees Nees City Realty do not charge a marketing expense and offer free professional photography and floorplans.
End of Financial Year Statement:
Another fixed cost that agencies charge to prepare an end of financial year statement, showing all of your income and expenses over the year and makes life simple for your accountant. Another cost that Bees Nees City Realty do not charge.
Another way of charging for property management services is through a flat fee. This is usually done through a management fee (percentage of weekly rent) however can be done on an agreed amount as well. These fees encompass everything that is listed above and are charged at a higher rate than the standard management fee. These are great for those landlords who wish to have the same income coming in every week without a surprise fee that they may have forgotten about. Bees Nees City Realty offer a flat fee option, please contact our Property Management team today to find out more.
Property management requires a lot more effort than most would realise and the costs involved are widely accepted with investors today. A common issue that is coming through our industry are those agencies that charge a low rate in order to secure the business or more commonly known as discount agencies. Whilst these do seem attractive to investors the service received typically matches the fee. It simply is not feasible to ensure all of the correct procedures and policies are followed for such a low income and corners must be cut behind the scenes – this is usually through less staff numbers. Remember all fees are tax deductible and a good property manager will increase your income from the property whilst maintaining it.
Bees Nees City Realty are specialists in property management and pride ourselves on the level of service we provide. If you are unhappy with your property manager please do give us a call and see how we can help!
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