Property management fees: What every investor should know
When it comes to making a property investment, you might want to appoint a real estate agent to manage your property – this is particularly true if you live in a different state, or even in a different country.
But there are a number of things to consider before you appoint an agent to manage your rental property – not least of which is their agent’s licence.
It’s also wise to get a comprehensive list of the services your agent intends to provide for you, and get an agreement in place that will set up the procedures involved with maintenance or repairs to the property.
Property managers are obligated to act in your best interest, but as residential letting property management fees can vary from state to state – and can even depend on the length of the tenancy agreement – it is a good idea to speak to a few different agents to get a feel for the market in your area.
Letting fees can be charged as either a proportion of the weekly or yearly rent, but you’ll also want to keep an eye out for commission fees, which can be charged in addition to the letting fee. Agents may also charge higher fees if you want them to manage a holiday letting property.
In some cases, you and your agent may come to a written agreement that entitles them to additional payments for the supervision of any repairs or replacements that need be carried out on the property.
When it comes time to appoint an agent to manage your property investment, you’ll need to outline the specific details of your arrangement – including the agent’s responsibilities, as well as the property management fees you will be charged – before you finalise the arrangement. It pays to read this agreement thoroughly and raise any questions or issues from the outset – this ensures you and your property manager are both on the same page.