Whether you’re a recent investor in Perth rental property, relocating and offering your home for rent, or planning to invest in 2024, you will need a good property manager!
Professional management helps maximise rental yields and keep your property in great condition. Remote self-management, on the other hand, is fraught with risk.
But before you choose an agency, it helps to get across Perth property management fees. This will help you to get the best deal possible.
In this blog, we’ll explain common fee structures, including:
- itemised fees
- “all-inclusive” fees
- the We Love Rentals* fee structure.
*We Love Rentals is a specialist Perth property management company with a strong reputation for service and over 20 years experience.
But first, let’s deal with a “frequently asked question”.
Is Property Management Too Expensive in Perth?
Interstate investors sometimes ask why property management fees seem higher in Perth.
According to realestate.com.au, the percentage fee typically charged in Perth is about 1.2% above the Australian average, due to higher salaries and business overheads.
Management fees are generally a percentage of rent collected. Right now, median rent Australia-wide is $600 per week and management fees average at 7.5 per cent. So Australian owners typically pay around $45 a week for management.
Perth rents are lower than in most states, so while fees are higher on average, Perth investors pay only a little more in dollar terms than in other states — around $3 a week.
Perth has the highest gross rental yields among the state capitals at 4.9%, according to CoreLogic. Therefore, the cost of Perth property management services is not eroding investment returns!
Click the following link to see the best investment suburbs in Perth.
You can always shop around for competitive fees. When doing so, look for an agency employing experienced property managers, and avoid property managers with too many properties.
For more details, see our blog post on WA property management fees vs the rest of Australia.
Pay Attention to Details
Management agreements can sometimes include unexpected fees and conditions. Always read the agreement carefully before signing.
- Be very clear about what’s included with the agreed fees
- Check which items are an extra cost
- “Liquidated damages” may apply if the agreement is cancelled early.
Itemised Property Management Fees in WA
Many agencies itemise services and charge each service individually.
You can be charged separately for:
- management fees: 5% to 10 % of rent collected — beware — some agencies charge this percentage on all invoices
- letting/leasing fees: 2-4 weeks rent
- advertising/marketing: usually at cost
- pre-letting inspection / Property Condition Report (PCR): $250-$500
- up to 4 routine inspections / PCRs per annum: $70-$100
- final inspection/ PCR: $250-$500
- reletting fee: 1-2 weeks rent
- lease renewal: $100-$200
- administration: $5-$10 per month
- annual tax statement: $50-$100.
You can’t predict exactly what your total property management costs will be as agency fees vary, and each tenancy differs.
Just make sure you’re comparing apples with apples when looking at what different agencies offer.
Pay attention to how much each itemised fee is, and what the agency will do for that fee.
Excessive fees erode rental yields!
Click the following link for more ideas on increasing your rental yield.
“All-inclusive” Property Management Fees
Many agencies offer “all-inclusive” packages, charging a percentage of rent (or all money collected). The fee can be as high as 18%. In theory, this covers everything.
It’s hard to cover every facet of property management under one fee. So read the agreement carefully. You could be paying top dollar for an “inclusive” arrangement where you still pay for extras!
Extras we’ve seen that are not included:
- court/tribunal appearances
- strata meeting attendance
- marketing — photos, videography
- handling insurance claims
- inspecting repairs.
Clarify ‘extras’ so you don’t end up paying more than expected!
What Fee Structure is Most Cost-Effective?
This is hard to predict. If you end up with high tenant turnover, a flat rate can cost less. With longer tenancies, itemised services can be less costly.
What Level of Service Will You Receive?
Look for indicators of the level of service you can expect — a higher fee can be worthwhile if service is outstanding!
Search online reviews, and ask questions like:
- how quickly the agency responds to requests for contact
- how long they take to re-let properties
- what their rent default rates are.
Click the following link to learn more about the benefits of using a property manager.
What Fees Does We Love Rentals Charge?
We Love Rentals has a team of experienced property managers dealing exclusively with rental properties.
We understand how to deliver exceptional value in property management services and our fees are transparent.
Our property management fees are truly all-inclusive — we charge three fees only:
- Letting Fee
The letting fee covers the entire letting process and includes:
- professional photography
- marketing on leading rental sites:g. realestate.com.au, reiwa.com.au
- vetting applicants via all three leading tenancy databases
- finding the best tenants (home openings, processing applications etc.)
- preparing lease paperwork/bond lodgement
- initial inspection/PCR.
We place a huge emphasis on securing good tenants to protect your property’s value and your cash flow.
“We Love Rentals has been patient and discerning of potential tenants for my new investment property. I got regular feedback about applicants and their fee system is simplified so there are no hidden costs.” – Terry Selton, Landlord
- Management Fee
Our management fee covers the tasks we do during every tenancy, from quarterly property inspections and arranging repairs and maintenance to postage and administration.
It also pays for most services you only need intermittently:
- processing insurance claims
- managing repairs and maintenance
- tenancy database searches/reference checking
- strata meeting attendance
- End Of Financial Year summaries.
Our one flat management fee means no unexpected costs!
“We have used cheaper agencies in the past, with the result being their staff are overworked, and don’t have the time to undertake tasks in a professional, timely manner. Having said that, We Love Rentals is very reasonably priced in the leasing market, with exceptional service provided.” – Nick & Trace, Landlords
- Court Appearance Fee
We hope you’ll never need a court appearance, so you only pay for it where it’s necessary. This fee covers court fees and your property manager’s time if you require them to appear in court for you.
For more information on applying for a court hearing in Western Australia click here.
What Do We Recommend?
We might be biased, but we think our property management fee structure is one of the best around – and our clients seem to agree.
Each month you’ll know how much is going into your account, and when. In this time of rising interest rates, that’s gold!
So if you want property management that’s simple and cost-effective, why not email us or call (08) 6254 6300 to chat about your property?
Our management team would love to help you!
Want to know how your investment property is performing against the market? They can help with that too!