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Understanding Property Management Fees and Commission

Property Management Fees

property management fees

If you’ve got an investment property, you’re probably going to want a Property Manager or Leasing Specialist to help you rent your property for the best possible price to the best possible tenant. And of course, for the best, it’s going to cost you. Property Management fees are a variety of service charges and/or commission, which can lead to confusion when deciding on which agent is the best agent for your property.

In this Besser + Co blog, we break down those figures and values for you. But first you need to understand:

Why do you need to employ a Property Manager?

Expert Property Managers can save rental providers valuable time and money in many different ways. They work to ensure the property is tenanted at all times, offer advice on how best to invest in the property itself and cover all of the essential administration tasks that are required by law, required for tax purposes and required to maintain a good rental provider/renter relationship.

Good Property Managers are invaluable in the process, as they  have the expertise in understanding what makes a good renter, they know how to read a good application and they have the compassion, yet business sense to take the emotion out of the tenancy. Property Managers also have wide networks of local tradespeople so that they can tend to your emergency situations – like a blocked toilet, a burst hot water service or a power concern.

They can also provide useful service when dealing with difficult situations such as following up on late payments, which many property owners can find awkward. As most property investors are working, have families or just live busy lives, the time and effort needed to self manage their property is too time consuming, and can cause unnecessary stress on the property owner.

When looking for a great property manager, the key is to return as much rental income as possible for your investment, while being able to manage in tandem the property with professionalism for all parties coupled with continual property management training, real life experience and excellent communication skills.

Property management fees Melbourne

If we break the fees into sections, most property management fees are based around getting a new renter, and on-going management fees. Firstly, as a new investment property owner, you will need to pay a Listing fee – usually around 1-2 weeks’ rent for preparing the property for lease, showing the property to prospective renters, going through all the applications, doing reference checks and signing up the new renter. There will also be marketing fees as an additional cost – this covers the internet listing, photos, copy, board and maybe a position on the internal listing sheet.

Once you have a new renter, the on-going management fees which look after collecting the rent, routine inspections, maintenance call-outs, etc. This fee is a percentage of the rent.

The average on-going management fees Australia

The weekly property management fees range between 5% and 15% of the rental price. These fees will vary greatly depending on what type of service you are receiving, the property itself and the local market.

The average is Metro-Melbourne is around 5% – 10% while additional charges can occur on top of the weekly rate, like an End of Financial Year statement, bank fees or breaking lease fees. Generally, the lower the percentage charged the lesser the number of services you will be receiving, so it’s critical you analyse exactly what you desire and what you are getting at the initial stages of consultation.

What are the different property management fees?

Some Property Managers may include certain fees as part of their percentage package and when reviewing a number of agents it might be a higher percentage, while others do a lower percentage management fee but have a series of add-on services that in the end could cost you more.

You need to understand what is and what is not included in the standard property management fee, and take note of what will be extra, including:

  • Marketing fees. The amount of marketing fees can vary due to how many platforms you list online, if you order a signboard out the front of a property or how many professional services you enlist including photographers, copywriters and floorplan artists.
  • Letting fee. This is charged by a property manager due to the significant amount of work required in sourcing a new tenant for a property. The fee is applied to cover the conduction of open for inspections, in depth checks of potential tenants, the completion of a condition report on the property and the collection of the bond.
  • Lease renewal fee. At the end of the initial lease period which is most commonly 12 months, renters may have the opportunity to expand the contract in which the Property Manager will charge a fee to sign onto a fixed term agreement. The sum is usually a percentage of annual rental return and can be significant.
  • Routine inspection fees. There is a service fee for the condition checking of a property.
  • If you have a disagreement with your renter or a previous renter, you many need to attend a VCAT hearing and there are fees that can add up here. If the renter moves interstate or you as a rental provider is interstate or overseas, then the dispute goes through a Magistrates Court, making it a legal procedure, rather than a civil procedure. This can be quite costly.
  • Annual statement fee. This is charged to acquire the annual statement from the previous year.

The Victorian numbers

Property management fees are relatively low in the state of Victoria, while it’s a similar story in New South Wales too. The Victorian average weekly percentage is around 6%, however, as stated, you need to work out what is included in that 6%.

Finding the right property manager

When on the lookout for a property manager there are some key questions you should be asking to find the right individual or company. The same property manager might not be the right fit for everyone, but it’s generally the experienced professional who deliver the most efficient returns for investors that you be after.

Some of the key questions to ask your prospective property manager include but are not limited to:

  • What is your experience in Property Management?
  • What’s included in your fees?
  • Do you handle the sale of properties too?
  • Do you see a long-term future in property management for yourself?
  • How big is your current workload in terms of properties?
  • How often will you be in contact with me?
  • How do you deal with a tenant paying rent late?
  • Why should you manage my property over my current property manager?

An experienced Property Manager is always a great asset within your property portfolio and will benefit your rental experience, your tax breaks and your personal wellbeing.

They are professionals in their field and deal with challenges daily, challenges that you may have never encountered, so their experience and the support they have within their team is ideal. Make sure to ask the key questions when selecting your next Property Manager to get the right result for yourself, your potential renters and your investment needs.

To learn more or to discover our REIV finalist property management services, contact our fantastic team at Besser + Co today.




With decades of experience locally and internationally in both small and large agencies. Proudly serving in Australia since 2009. A trusted property management company by Australians

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