There are many benefits to hiring a good property manager to look after your investment property. They can save you time, money and hassle and their fees are mostly tax deductible. However, not all fee structures are the same and there may be a number of costs you haven’t taken into account when considering whether your portfolio is positively geared or not.
This is the most obvious fee. It’s what you pay a property management firm for their services. It can range between 5 and 10% of the weekly rental income that your property generates. The rates a management firm charges can vary depending on what services they offer. The more encompassing their work is, the higher the rate they are likely to charge. Say you agree to empower them to look after your landlord insurance, attend strata meetings on your behalf and do various other tasks that go above and beyond a basic service, you may find you are paying closer to the 10% mark. But if they just collect rent and organise routine inspections and basic repairs, you should expect to be paying a fee at the lower end of the range.
When you have a tenant vacate and need to find another one, an additional fee will usually follow. The leasing fee will usually be a set percentage of the initial rent payment the new tenant makes and will cover the agency for conducting inspections and screening applicants, along with costs associated with advertising the property, such as professional photography, online listing fees and any other marketing materials.
Routine inspections at set times during the year are a standard offering for all good management companies, but there are some out there that charge extra. It’s important therefore to keep an eye on the fine print of any agreements you sign with a property manager, especially if their low fees seem too good to be true.
It’s pretty common to get the odd phone call from a manager noting that you have plumbing work that needs to be approved, or perhaps a ceiling fan needs to be repaired or replaced. However, some managers will charge an extra fee for coordinating and overseeing the jobs, while others will make it part of your overall fee. Many will have preferred tradespeople to do jobs also, which sounds like you’re getting a good deal, but you want to make sure they’re not just feeding jobs to their mates instead. Ask for more than one quote on any work that needs doing so that the manager knows you’re savvy and attentive to detail on your investments. If all is above board, your manager should have no qualms explaining exactly how costs are calculated and whether there are any repairs that won’t be covered by your basic management fee.
If you are unfortunate enough to land a bad tenant that needs to be evicted or served legal notices, you may find yourself facing the double whammy of also paying extra legal fees to your property manager for handling the process. Another one is renewal fees. Who would have thought that a tenant simply renewing their lease would incur extra costs for you? But in some cases it does. And one that landlords often forget to account for is the exit inspection fee. This inspection is conducted when a tenant leaves the property to identify whether your asset is in good condition or if the bond needs to be withheld to get it back up to scratch.
Blink Property is a specialist management brand, which means looking after landlords and tenants is their entire business. That is an important point of difference because many other property managers are simply part of a bigger real estate franchise. Property managers in those firms can be recent starters at the organisation who are trying to become selling agents and already have their minds on the next stage of their career.
Blink was established to cater to savvy, ambitious investors. Blink property managers take a holistic approach to your whole investment journey and look after the property for what it is…your asset. Not just a place to collect money from and organise a few inspections. And, the added bonus is that Blink manages properties in many regions across Australia, which means consistency of service and pricing across 3 different states.