If you’ve started down the road of investing in property in Victoria, it’s important to consider a property manager. This is key to stopping property management from becoming overwhelming and ensuring everything is done as legally as possible. But do you understand exactly what a property manager does and how the fees work? This is where to learn all the vital information you need before engaging in property management services in Australia.
What A Property Manager Does
When it comes to maximising your property's income and maintaining its capital value, a professional property manager can be of great assistance. When you engage a property manager, they give you the following benefits:
· Knowledge of the area and industry
· Quality of service and value for money
· Peace of mind
A good managing agent should take care of your investment property day-to-day without putting you through stress. They will handle all tenant communication, collect rent and bond payments, arrange maintenance and repairs, lease renewals, inspections, and more to ensure you have quality tenants, and leave you time to get back to your daily life.
How Do Property Management Fees Work?
In Victoria, there are two main fee models property managers use. This is the percentage-based and flat-fee model.
Percentage of Rent Fee Model
This is when property managers charge a set percentage of the gross weekly rental amount for their service. This includes a range of services, so make sure to ask for an itemised list of the fees, so you can be aware of what you’ll be getting ahead of time,
Flat Fee Property Management Model
In this case, you will be charged one fee instead of individual fees for services. This method is fairly new and it's different as the price is not determined by the rental amount, or the property size, but by the location. This means everyone pays the same percentage in the area, but some agencies add additional charges to the base amount, so make sure to check.
In addition, the fees change incredibly based on the said locations, So, if you’re in the inner-city area, you will be paying higher fees than you would for more suburban spaces. When building your investment portfolio, keep in mind the fees will increase.
Remember to Sign an Agreement
Usually, when you’ve decided on the property manager, you’ll be asked to sign a contract. This is a Management Agency Agreement, and it sets out the terms of service as well as the list of responsibilities the agent has, as well as your obligations.
Before the time comes to sign, make sure you know what it is you want, and make sure nothing is left out.
Some of the following things must be in the agreement.
· A full breakdown of the fees and any charges that apply.
· How rental repairs and maintenance will be conducted.
· The period of notice for terminating the agreement, often this is 30-60 days of written notice.
Remember that once the contract is signed, the property manager cannot change or adjust their fees, if they want to negotiate new fees, a new agreement must be signed.
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