“I’m considering using a real estate agent in SA to help manage my investment properties because I don’t feel knowledgeable enough to self-manage. What are the main things real estate agent fees go towards?” – Owner, SA
How are agent fees used?
We asked Adriana at DIY Property Management for her advice:
“The 3 main things property management fees go towards are: routine inspections, preparing to lease and lease renewal documents and managing maintenance,” she said.
“Having said that, what the management fee covers in the overall fee structure of each agency varies wildly across agencies and the pattern is also uneven across the country. There are endless models that agencies can use to price their services, as their services and fees are not regulated.”
Adriana said there are full-service agencies that will charge you only one fee that includes all their services: “The fee can be a percentage of rent collected, a percentage of ‘all monies collected’ or a fixed rate per month,” she said.
“Yet, on the other side of the spectrum, are flexible agencies, whose customers can select what services they would like the property manager to oversee. You could select a lease only, for example, where the agency will advertise, screen and select the tenant and prepare the leasing. The owner takes over the management from that point on. Another example is to select a more comprehensive management package but leave out representation to tribunal hearings.”
“When searching for your next property management agency, ask if they can send you in writing what is included in their fee, and how much you would have to pay if you need any of the ‘extra’ services. This way, in a simple spreadsheet, you can compare apples to apples.
“You will always find an agency that has chosen to charge a very low fee, but if an agent is cutting fees they are making it up somewhere else and you could pay the price. Before signing a Tenancy Agreement, you must feel that you know exactly what you are paying for.”