Understanding the value of management fees
Trusting a property manager to manage your investment is a big decision, for most people their investment property/s is one of their biggest assets. It surprises me that one of the key points to some owners, during the choosing a rental agent process is the management fees and charges.
I believe the most important part should be the property managers expertise and industry knowledge. But sadly sometimes the Landlords tend to focus on the lowest Management Fees without considering their long term and overall costs.
The savings from a lower Property Management Fee of 6% compared to 8% could be only $10 per week or $500 per year. However an under rented property, higher than normal vacancy periods, maintenance not being attended to etc. can cost a lot more than $500 a year.
The right property manager will care about your property and will add value to it. Improving your returns is not just about increasing the rent, it is about reducing vacancy times, minimising unnecessary expenses and ensuring they have the knowledge and experience to get you the best price possible.
Most times a lower management fee also has additional fees that end up costing you more over a year. The most important thing to consider is the value of the right property manager and the costs to you of having a poor agent.
Does your property manager have a strict rent arrears policy? Conduct regular inspections? Know the real rental value of your property to minimise vacancy times?
Our property managers must care for your property, as if it is their own and ensure that you are receiving the best returns from your investment property.
At JHT Property Group, this is part of our property managers job description!