How much does it cost?

How much does property management cost?

A good property management company is meant to take the day-to-day hassle out of being a landlord. They also make renting easier for tenants by being on call to fix problems and making sure routine maintenance gets done. The result: happy tenants who stay longer and happy owners who get regular rental income.


But what does good service cost?

It all depends what you want out of your management company as the level of service can vary greatly and some landlords prefer to be more hands on than others and some property management companies like to do a little for a lot but typically as the service quality increases so does the cost. I have found a company recently offering 1.5% management services but on closer inspection it is nothing but a conduit for your tenancy payments as no other professional services are included in the fee. It's not even clear if they use an audited trust account which is essential for all professional management companies. Other Real Estate company spin off's offer flat fee managements of 6%/7%/8% or similar and just like discount Real Estate agents the fee almost always represents their quality of service and dedication to you as the owner.  In the past I have chosen my real estate agent, mortgage broker and solicitor based on my perceived level of trust in their ability to do the job to my satisfaction and within an acceptable budget. Of course personality and attitude also go a long way.

In assessing your property management company and before you ask how much we would suggest asking these simple questions:

Are they qualified to do the job

  • What are their qualifications?
  • Are they a specialised property management company or just a real estate agent company spin off property management division?
  • How long have they been in property management in the area?
  • Are they personally invested in the area?


How does their business work?

  • How many staff do they have and what are their roles? Do you have staff specifically responsible for finding good tenants?
  • Are they affiliated with any particular professional body with a code of ethics?
  • What resources do they have for managing property over holiday periods?
  • How many properties does your business manage, and what percentage is currently vacant? (Portfolio size and Vacancy rates)
  • What’s the average length of time it takes to fill a vacancy in the area?
  • What kind of insurance coverage do you have? Is there any fidelity fund coverage?
  • What computer system and software do you use?
  • May I see an example of a monthly reporting package?


What experience do you have with the Tenancy tribunal?

  • Have you appeared in Tenancy Tribunal cases? If so, what happened?


What are the fees?

  • What fee structure will they charge? Does it fall within the average fee of 7.5–8.5% of rent received?( What other costs does the manager expect you to pay in advance?


How often will they be in touch?

  • How often will they report to you? What’s included in the report? What’s the format of reporting? Do they offer online services?
  • Will they provide market rent information? Will they alert you to the need for a rent review as part of their monthly reporting services? Will they have sole discretion to impose a rent review or will they need your approval?


How will they attract and select tenants?

  • How will the property be marketed to attract tenants? Who pays for marketing costs?
  • What does their tenant selection process include?


How will they deal with any issues?

  • What facilities do they have for dealing with tenant issues, and for handling any questions or emergencies outside office hours?
  • What process do they follow when a rent payment is late?


How will they maintain the property?

  • How often will they inspect the property?
  • Which kinds of maintenance tasks are handled by the manager in-house? Which tasks require outside contractors? Can they show you a list of preferred or accredited service providers for maintenance work?
  • What is their process for getting quotes for maintenance and repair work?
  • How do they provide contractors access to the property during the tenancy?


What happens when a tenancy ends?

  • At the end of the tenancy, how do they manage bond refunds and property inspections?