Property Management Fees & Commission 2023

Property management fees

As a property owner, understanding the structure of real estate rental fees is crucial for successful property management. Property management is a service provided by real estate professionals to oversee the rental of properties on behalf of property owners. However, this service is not free and comes with its own set of costs, known as property management fees or real estate rental fees. This comprehensive guide will help you understand these fees, how they vary across Australia, and other essential details about property management.

Defining Real Estate Rental Fees

Real estate rental fees, also referred to as property management fees, are costs associated with marketing your property and managing tenants. These fees are typically presented as a percentage of the weekly rental amount for the property. On average, property management fees across all states in Australia are about 7.5%. However, these fees can vary significantly depending on various factors, such as the location of your property, the types of services you select, and the property manager you choose.

Additionally, there is usually a letting fee payable when the property acquires tenants. This fee is generally represented as a specific number of weeks rent. The average letting fee in Australia is about 1.4 weeks of the weekly rent amount.

It’s crucial to note that property management fees are not fixed and can be negotiated. Also, many agencies may charge additional fees on top of management fees. Therefore, it’s advisable to scrutinize finer details when selecting a property manager to avoid hidden costs.

Understanding the Average Property Management Commission Rate

The commission rates for property management vary from state to state and can range between 5% and 15%. The actual amount you end up paying will largely depend on your property, the local market, and the types of services you select.

It’s also worth noting that property management fees are subject to Goods and Services Tax (GST), so ensure the proposed fee includes GST before choosing a property manager. A commission rate closer to 5% could imply you’re paying for management fees only, whereas an ‘all-inclusive’ fee could cost up to 15% of your weekly rental income.

Different Types of Real Estate Rental Fees

Property management fees can be broken down into several categories depending on the services provided. Here are some of the most common types of real estate rental fees:

1. Property Management Fee

This fee covers the regular activities conducted by the property manager such as rent collection, organising repairs and maintenance, liaising with tenants and owners, and handling administrative tasks.

2. Letting Fee

This fee covers the services involved in sourcing a new tenant for a vacant property.

3. Marketing Fees

These fees cater to internet marketing on real estate listing websites and a ‘for lease’ sign board to attract new tenants.

4. Lease Renewal Fee

This fee applies when the existing tenant is signed onto a fixed-term agreement after the end of the lease period.

5. Routine Inspection Fees

These fees are charged for regular inspections of your rental property.

6. Annual Statement Fee

This fee covers the cost of obtaining your annual summary statement for the last financial year.

7. Civil and Administrative Tribunal Fees

These fees are incurred when you have to take a tenant to court and usually include court preparation and travel costs.

How Are Real Estate Rental Fees Charged?

Property management fees can be charged in two ways:

1. Percentage-Based Property Management Fee

Most management fees are charged as a percentage of the weekly rental amount. Generally, the lower the commission fee percentage charged by your property manager, the fewer services are likely to be included.

2. Flat-Rate Property Management Fee

Some property management agencies charge a flat fee rather than percentage-based management fees. However, these agencies often don’t provide the same level of personalized service and local expertise.

How Much Does a Property Manager Cost?

The cost of a property manager will depend on their property management fees. These fees can vary significantly across different states and cities. For instance, property management fees in Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Canberra, and Darwin can range from 5.4% to 8.7%.

You can work out your property management cost with our online rental fee calculator.

Why You Need a Property Manager

While you can save costs by managing your property yourself, hiring a property manager can free up your time and reduce the stress of owning an investment property. They have connections with local tradespeople and are experienced with all regular administration and documentation.

Read more on the benefits of a property manager here;

The Qualities of a Good Property Manager

A good property manager should offer the highest possible rental return, professional and personalized service, experience in managing properties like yours, superb communication and organizational skills, and education in property management.

Questions to Ask a Property Manager

Before hiring a property manager, it’s crucial to ask them questions about their experience, the number of properties they are currently managing, their fee structure, their tenant screening process, and how they handle repair requests and delayed or missed rent payments.

Switching Property Managers

If your current property manager isn’t fulfilling your expectations, feel free to explore other options. Websites like can help you compare different property managers, including their fees, marketing fees, and property management history.

How to Compare Property Management Fees

If you’re looking for the right agent to work with when renting your property, websites like LocalAgentFinder can help you compare agents side by side on things that matter most, including rental management fees. The tool provides unbiased insights and performance data across agents, allowing you to make the best decision.

Finding Cheaper Property Management Options

It’s worth asking your property manager if they’ll negotiate on fees. Some property management companies charge flat-fee rates, rather than a percentage. By automating and systemizing the process of managing your investment property, these companies can reduce their overheads and charge less for these services.

In conclusion, understanding real estate rental fees is essential for successful property management. Always ensure that you know exactly what you will get for your money before choosing a property manager. While the cheapest fees may not always equate to the best service, it’s important to consider other aspects of a property management service, such as client reviews and the number of potential renters, to make an informed decision.

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