Understanding what Property Management Fees you should pay in Perth can be confusing and complex. With so many different fees it is easy to be unsure about what you get for your money. We are here to peel back the layers and explain the fees and offer an easy solution to take the stress and complexity away.

The “Management Fee” is the main fee in a lease for a residential property in WA. This fee covers rent collection, issuing notices, preparation of statements, payment of accounts, arrangement of maintenance, invoicing and collection of outgoings such as water consumption. This can be as little as 6.6% up to 9.35% (both including GST). The difference in the range is usually to do with the experience and skills of the Property Manager. The systems the agency uses (the latest software costs more) are another factor.

Other common property management fees explained

It is unlikely to find an experienced and efficient “senior” Property Manager that will manage your property for under the 9% range. By the way, many Property Managers call themselves “senior” when they don’t have a lot of experience. At Davey Real Estate we don’t give our PM’s the “senior” title unless they have 6+ years of experience within the industry. It is an important question to ask of the company and the Property Manager how long they have been managing properties.

The other important fee to consider is the “Leasing Fee”. It is the fee charged for leasing a property and covers introducing prospective tenants to a property, qualifying applicants, preparation of tenancy agreement documentation, processing tenants through defaulting tenant databases and lodgment of tenant bonds with the governing. It is usually not included in the management fee and is on average two weeks rent plus GST. If a property receives $500 per week in rent, then the leasing fee will be $1,100 inc GST, which is paid once a tenant has been secured and has started paying their rent.

A “Lease Renewal Fee” will occur with long-term tenants and is cheaper than a leasing fee. This fee applies when a tenant renews their lease. The process of renewing a lease includes negotiation, research of current market values and putting this writing to all parties. A good Property Manager will complete a Comparative Market Analysis and educate the tenant on the updated market. They will then enter into negotiation on behalf of the Landlord to ensure that you are getting the most value for your investment.

Other fees that are common in Perth are Admin Fees (usually less than $10 per month), Marketing Charges (usually at cost) an Annual Financial Statement (can be up to $88), and quarterly inspection fees ($66 – $88 per quarter)

Another option – All-inclusive fee (14% – 18%)

A simple ALL-INCLUSIVE (FLAT RATE) fee is a percentage of the rent with no other “ancillary” or extra fees.  It is important to find if it is a true flat rate or if other fees will creep in later. Check that all the above fees are included in the flat rate.

Tennessee Tiexeira (Director of Property Management at Davey Real Estate) suggests that “some agents (such as Davey Real Estate) can provide a simple fee. All the fees are bundled into one fee and often it is a cheaper way to go – it is certainly easier to budget and understand. Signing a long term management authority will often lock you into today’s rates and you will avoid future fee increases. You should also look for long term tenants with long lease terms as this will also save you a considerable amount of money – usually up to two weeks rent every year.”

Inside Tip: Ask if advertising and court costs are included.

Hybrid Fee Structure

This usually involves a management fee and one or two other fees separated out. This structure works well for clients if they don’t need some services or expect to need them rarely. For example, if you know you will have a long-term tenant, then the smaller flat rate with Leasing Fees taken out will save you money.

The hybrid fee can be anything from 8% – 14% depending on which services are “left out”. An example may be 12% plus letting fees + court appearances.

Which is best?

Generally, all the fees will wash out to a similar yearly amount. However, a flat rate or hybrid can save you money if you have high turnover and short rental periods. This works if you have leasing fees included in your “all-inclusive” or hybrid fee.

How can I save on property management fees in Perth?

Alison Mcleod (Investor Specialist) has been in the industry for over 10 years in Perth. She says there are a couple of ways of saving on the fee.

“The most obvious is if you have multiple investment properties, nearly all agents will discount to get your second or third property. However when it comes to fee’s I suggest you don’t base your decision on fees. If an agent reduces their fee easily this demonstrates to me their standard service is easily discounted also, shows their negotiation skills are not great, and keep in mind this is the person that will be dealing with your tenant. The difference of 9.35% v 6.35% per week on a rent return of $500 per week is the equivalent of $2 per day. It’s about finding an agent you trust and who’s services levels are that exemplary you feel you are getting what you are paying for.”

Avoid the “Management Fee” Rip Off

There are some agents out there charging their management fee on ALL INVOICES, not just on the incoming rent. That means you can add 10%+ to your insurance, your water bills, your cleaning and anything else they arrange for you on your behalf. Be particularly weary of this with flat fees of 10% or amazingly low management fees. We think it is a little cheeky. That system may suit you but be careful to compare apples with apples when doing your homework.

For a full explanation of all fees and the average costs, please email us today at alisonm@daveyrealestate.com.au.

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Do you still need some advice on Property Management in Perth?

Check out or call our friends at the Real Estate Institute of Western Australia (REIWA)