The First-Time Investor’s Guide to Property Management Fees

‍

When you’re investing in property, one of the most important decisions you’ll make is choosing who will manage your investment. Property management fees are often misunderstood, but they play a crucial role in protecting your asset, ensuring compliance, and saving you time and stress as a landlord.

This guide breaks down what property management fees cover, what to look for in a property manager, and how to make sure you’re getting the best value, not just the lowest price.

‍

What Do Property Management Fees Actually Cover?

It’s tempting to choose the cheapest property manager you can find, but in real estate, cheaper isn’t always better. A low-cost service might save you a few dollars upfront but can end up costing you far more in the long run if it leads to poor tenant selection, delayed maintenance, or missed legal obligations.

A good property manager does much more than just collect rent. They act as your partner in protecting and growing your investment.

Here’s what a typical property management fee generally covers:

• Advertising and open inspections: Promoting your property across major platforms and managing tenant viewings.
• Tenant screening and background checks: Verifying rental history, employment, and references to find reliable tenants.
• Preparing tenancy agreements and condition reports: Ensuring all documentation complies with relevant tenancy laws.
• Rent collection and financial reporting: Managing payments, arrears, and monthly statements so your cash flow stays on track.
• Maintenance coordination: Engaging qualified tradespeople for repairs and routine upkeep.
• Routine inspections: Conducting property checks and providing reports to keep you informed about the property’s condition.

The key is to understand exactly what’s included in your management agreement and ensure it aligns with your goals. Paying slightly more for a proactive, experienced property manager can often result in fewer problems, better tenants, and stronger long-term returns.

‍

The Real Value of a Good Property Manager

‍

‍

You might think property management is just about collecting rent, but it’s so much more than that. A skilled manager helps you:

• Protect your investment: They ensure legal compliance, prompt maintenance, and accurate documentation.
• Maximise your returns: Through strategic pricing, marketing, and tenant retention.
• Save time and stress: Handling the day-to-day issues so you can focus on growing your portfolio.

Remember: the goal isn’t to find the cheapest fee; it’s to find the best value for your money. A slightly higher fee can easily pay off if your manager keeps your property tenanted and well maintained.

‍

How Property Management Fees Are Charged

Property management fees vary depending on where your investment is located and the agency’s structure.

You’ll typically come across:

• A percentage-based fee: Commonly between 5%–10% of your weekly rent [plus Goods and services tax (GST)].
• A flat monthly fee: Less common, but sometimes used in regional areas or boutique agencies.

For example, in Sydney’s Inner West, fees average between 5 and 8% plus GST, while in some parts of Victoria, they can range from 5% to 10%.

Make sure your management agreement clearly outlines how the fee is calculated and what’s included.

‍

Watch Out for Hidden Fees

‍

‍

Before signing any agreement, take a close look at potential extra charges, such as:

• Marketing or advertising costs
• Lease renewal or re-letting fees
• Statement or administration charges
• Maintenance coordination fees

Check whether your agent receives commissions or incentives for recommending certain products like landlord insurance or depreciation schedules. Always do your research before agreeing to any add-ons.

‍

How to Choose the Right Property Manager

Choosing the right property manager can make or break your investment experience.

Here’s what to prioritise:

• Local expertise: A manager who knows your suburb will understand local rental demand, price trends, and tenant expectations.
• Strong communication: You want someone responsive and proactive about maintenance and tenant issues.
• Reputation: Read reviews and ask about other landlords’ experiences. Consistent negative feedback is a red flag.
• Systems and processes: Ask how they handle arrears, maintenance requests, and tenant screening. Their answers will tell you how organised and experienced they are.

At Search Property, our buyer’s agents often work hand-in-hand with trusted property managers who understand the local market and prioritise your investment goals.

‍

Keeping Your Property in Good Hands

Once you have chosen a property manager, make sure they stay accountable, and:

• Review routine inspection reports carefully
• Check that photos and notes are current and detailed
• Ensure inspections are conducted at the correct intervals
• Visit the property every 12–18 months with your manager if possible
• Stay proactive with maintenance and repairs

Remember, effective property management protects your rental income and your property’s long-term value.

‍

Kickstart Your Investment Property Journey

As a property investor, understanding property management fees helps you make smarter financial decisions and avoid unexpected costs.

The right property manager doesn’t just look after your property; they protect your time, your returns, and your peace of mind.

If you’re ready to invest or want expert guidance on choosing the right property manager, book a FREE discovery call with Search Property’s experienced buyers agents. We’ll help you find high-performing properties and connect you with professionals who ensure your investment runs smoothly from day one.