Aaron Bell
Athena Cocoves
When you own an investment property, renting it to tenants can provide extra income. A property manager can simplify the job by overseeing various tasks, such as:
- advertising the property
- holding inspections for prospective tenants
- finding and screening new tenants
- creating and signing paperwork such as lease agreements
- handling ongoing paperwork
- collecting the bond and rent
- regular property inspections
- communicating with tenants
- organising repairs and maintenance
- dealing with lease breaks, evictions, and tenant turnover.
The key benefit of a good property manager is that they handle this work for you, which can be otherwise time-consuming and complicated. However, you should always clarify their specific duties before hiring, as these may differ between agencies.
» MORE: How much can you borrow for an investment property?
How much does a property manager cost?
The cost of property managers varies between states and agencies, but is usually between 5-12% of the rental payment.
Using this ballpark figure, a manager for a property rented for $500 per week could cost $25-$60 weekly, or $1,300-$3,120 annually.
Some property managers may charge a flat fee rather than a percentage of the rent, though this is less common.
Average cost by state
Based on the per cent of weekly rent.
| State or Territory | Metro | Regional |
| NSW | 5% – 8% | 5% – 12% |
| VIC | 6% | 5% – 10% |
| QLD | 9% | 7% – 12% |
| SA | 9% – 11% | 9% – 15% |
| WA | 8.5% – 11% | 11% + |
| ACT | 6% – 8% | 8% + |
| TAS | 5% – 10% | 5% – 10% |
| NT | 5% – 10% | 5% – 10% |
Prices vary nationally depending on supply and demand. Metro centres such as Melbourne and Sydney can be lower due to the competition between agencies for work. Remote properties may be more expensive to manage due to their location, limited demand, or agency monopolies in specific markets.
Where to find a property manager
- Search engines: Online tools can help you find property managers based on cost, services and location. For example, REA Group offers an online tool to help you find the type of manager based on your requirements.
- Real estate agents in your area: Larger real estate agents, such as Ray White, Harcourts, LJ Hooker, McGrath and Belle Property, generally service common metro areas. A growing number of boutique and independent agencies, such as Housemark or The Agency, also cater to specific property types or regional locations.
- Speak with other investors: Talk to other investors to see who they’ve used. They can also advise on who to avoid.
Should you hire a property manager?
Potential benefits
- Time saving: Property managers handle day-to-day tasks such as rent collection, tenant communication, and maintenance.
- Tenant management: Good property managers have experience advertising and screening for reliable tenants.
- Legal expertise: Experienced property managers understand tenancy laws, eviction protocol, rent collection, and contracts, which may save you from legal issues.
- Access to tradespeople: For maintenance, repairs or emergency situations, property managers often have established relationships with reliable and affordable tradespeople.
- Handling emergencies: Tenants will communicate with the property manager rather than you for urgent issues, such as a burst pipe, a key not working, or financial troubles.
Possible risks
- Cost: A property manager can cost 10% or more of your rental income.
- Less control: Delegating responsibilities to a property manager may result in less direct contact and control over screening and management decisions.
- Hidden fees: Some may charge extra for certain tasks.
- Attention: Some property managers handle a large number of properties, potentially reducing the focus on yours.
- Misaligned goals: Property managers may assume you want to spend money on small upgrades or rent quickly, leading to a less thorough screening process.
Considerations when choosing
For some investors, the temptation is to pay the lowest fees possible; however this could cost you more in the long run if the manager underperforms. They could select tenants who don’t pay rent or damage the property, or neglect to advertise properly, leaving the property vacant for long periods.
It’s essential to communicate your goals and values to your property manager. For example, they may focus on finding new tenants as quickly as possible, acting under the assumption that you don’t want the property vacant, while you may prefer a more thorough screening process to ensure responsible and reliable tenants.
They should also know your preferences regarding pets, or the number of tenants allowed on the lease.
A good property manager can find reliable tenants who pay on time, and minimise vacancy. They can also advise you on when to increase the rent and connect you with reliable tradespeople.
However, some investors may have the time and expertise to self-manage, while others will see the benefit of not having to deal with these issues themselves.
The argument for or against a property manager, and how much you pay, depends on your own commitments.
About the Author
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