This article is a must-read for property investors. Are you paying a letting fee for your investment property and management fees for the same period? Stop Paying Double! This is an unfair real estate industry practice that can cost landlords thousands of dollars.
Rental Agent Fees Brisbane
A letting fee is charged when your property is leased. Depending on your agreement this would typically be 1-2 weeks rent. This fee covers everything from lease preparation, open inspections, processing applications to rent, and much more.
There is a lot that goes into letting a rental property and great property managers like True Power Realty well and truly earn their fee. But are you also paying the management fee for those 1-2 weeks rent?
In contrast, management fees are ongoing fees charged by property management companies for the ongoing management and maintenance of your investment property.
Management fees cover services such as rent collection, property inspections, maintenance coordination, handling tenant inquiries, and resolving any issues that arise during the tenancy. These fees are usually calculated as a percentage of the rental income and are charged on a monthly basis.
A Real Estate Agent Who Is On Your Side
When True Power was established, we realised that collecting a letting fee and charging the management fee was unfair to our clients. We felt uncomfortable with this industry practice and immediate change had to happen.
We refunded management fees charged to our clients for the weeks where a letting fee had been charged. And now no ongoing management fees are charged where there is a letting fee.
Why would we do this? Because it’s the right thing to do. Shock horror! A real estate agent who’s on your side. Yep, that’s us.
Compare Real Estate Agent Fees
Not all real estate agent property management fees are the same. Before signing with an agency, it’s a good idea to review their fees. This research will help you understand what fees are charged and how they are calculated.
Don’t Choose a Property Manager on Price Alone
Most property managers provide similar services. They will collect the rent, look after basic maintenance, and conduct routine inspections. But a small number offer so much more.
For example, would you prefer a written inspection report or a video walk through with commentary? And would you like a statement once a month so you can see exactly what’s happening with your investment property finances? Or would you prefer 24/7 access to your agent’s website portal system?
True Power Realty offers all these services while other property managers prefer keeping their landlords in the dark.
Get All Property Management Commitments in Writing
Property managers in large agencies often have hundreds of properties to look after. This means they will have less time to care for your property. Before you sign on the dotted line to ensure all their commitments are in writing so that you can hold to account if there is an issue.
Does the Property Manager’s Style Match Yours?
It’s important to make sure you feel that you can establish a productive, professional relationship. So check the property manager’s style and personality match yours.
Employing a property manager doesn’t switch everything into autopilot. You will have ongoing communications with your property manager regarding maintenance, inspection reports, and tenancy renewals. The best property managers will also want to discuss how to increase the value and returns on your investment.
Ask the Property Manager for References and Reviews
Check if the property manager looks after properties similar to yours. Also, check if they have the expertise to manage properties provided under the National Rental Affordability Scheme (NRAS) or other government initiatives.
A good way to test a property manager’s claims is to ask for client testimonials or to speak directly with their existing clients.
9 Interview Questions to Ask Your Property Manager
If you need to find a new property manager, first shortlist potential property managers then organise meetings to speak to each person.
Treat these meetings like a job interview. This will help you understand what each property manager is offering and if their service will suit your needs.
Here are True Power’s insider tips for hiring a property expert who will look after one of your most valuable assets:
1. Are You a Queensland Licenced Property Manager?
A top priority is to ensure the property manager is licenced and a member of the Real Estate Institute of Queensland (REIQ). Also, confirm who will show the prospective tenants through the property until it’s rented. Will it be the licensee and business owner or a junior employee?
2. How Often Will My Property Be Inspected?
Also, check how often will your property be inspected, and if this includes physical inspections or only virtual inspections where tenancy and maintenance issues can be missed.
3. Who Will Manage My Property After it is Leased?
Check who will manage your property after the lease is signed. You might be talking to a business development manager but the day to day management is then passed to an inexperienced employee.
4. What Are the Property Management Fees?
Look out for hidden double fees and underwhelming property management.
5. Do You Have Enough Liability Insurance to Protect Me From Lawsuits?
All professional services businesses should be properly insured to ensure they protect their clients and to ensure their business remains viable. Professional indemnity insurance cover can protect a real estate agency, and by default their landlords, in case of bad advice or service.
6. How Often Will You Contact Me When My Property Becomes Vacant?
Check how the property manager will communicate with you when your property becomes vacant. Avoid managing agents who don’t like taking phone calls or have a reputation for not responding to emails.
7. How Do You Minimise Vacancies in My Property?
Look for a property manager who thoroughly screens tenant applications. You also want a manager who communicates regularly with the tenants to address any issues and to ensure the property is being cared for.
Also look for a proactive manager who actively retains your best tenants who care for your property as if it’s their own.
8. How Do You Recover Rental Arrears?
Rental arrears occur when a tenant fails to pay the rent. A leading indicator of a tenant that has financial problems is lumpy or payments. A good agent will notice this issue straight away and will speak with the tenant and advise the landlord.
It is important to check how the property manager handles late rental payments and if they can manage repayments via a debt recovery agency. A good agent will also explain the risks and protections landlords face when claiming costs via the Queensland Civil and Administrative Tribunal (QCAT).
9. What Processes Do You Have for Repairs and Maintenance?
This is a weak area for many property managers, particularly if they are inexperienced, haven’t worked with trades, and are not property investors.
It’s also important to understand how the property manager handles emergency repairs. Can tenants the agent after hours to report the issue and is there a tradie team in place to spring to action?