As a landlord, it can be difficult getting an understanding of the cost of property management fees in Newcastle. Most real estate agencies and service providers are comfortable providing numbers such as how many new management agreements they've signed in the past month, or the percentage of their properties which are occupied. But there is little transparency around cost.
We'll cover this in detail below, including an example comparison of typical property management costs from a Newcastle real estate agency compared with our own fee structure.
So, what are property management fees in Newcastle?
We must start by saying that cheapest is not best. Australian research has shown that real estate agents are notoriously poor at property management, with most property managers having less than two years experience, being unhappy in their job and seeing the role as a stepping stone to something else.
While we are proud to offer a highly competitive rate significantly below many Newcastle property managers, this is not an area we focus heavily on promoting. We pride ourselves on being the most accessible and easy to work with property management business in Newcastle, regardless of the cost.
Right, down to the details.
The cost you see most often communicated (if any at all!) is the property management fee or simply the management fee. This is a percentage of the weekly rent received for a rental property which is then taken by the property manager as payment for their services.
For example, if a property management business offers a 7.5% incl GST management fee, and your property rents for $450 per week, the business takes $33.75 per week as payment, and you may receive $416.25 per week in income from your rental property. However, read on. There are often additional costs ongoing which are not as clearly communicated...
To be transparent, Carnelian Property Management offers a management fee of 6.6% incl GST for investors with a single property, or 5.5% incl GST for investors with multiple properties under our management.
Over a month, the difference in management fees between various property management businesses may seem relatively minor. Also, it should be noted that the fee is tax deductible. However, these differences can mean a lot to investors carefully managing tight cash flow, and can add up to a few hundred dollars over the course of a year.
What property management costs are there other than the management fee?
Very importantly, make sure you are fully aware of any additional costs you will be charged in having your Newcastle rental property managed. While the management fee may be clearly promoted (though it often isn't), you need to look deeper. Following are just some of the areas where additional fees can creep in, beyond what is covered by the management fee:
An example comparison of Newcastle property management fees and charges
Bringing it all together, following is a breakdown of ballpark costs from a typical property management business in Newcastle, compared with Carnelian Property Management. Cost comparison is based on a landlord renting a property for $450 per week and renewing the lease to the same tenant after the initial lease period (e.g. after one year).
In summary, you could save close to $800+ per year having your property managed by Carnelian Property Management if you are an owner of multiple investment properties under our management. For investors with a single investment under our management, the savings could be close to $500+ per year. Importantly, a significant portion of the savings are from the "hidden" costs you may be charged elsewhere beyond the management fee itself.
Want to change property managers?
If you're not happy with the level of transparency, communication, and attentiveness of your property manager, regardless of cost, please contact us now. We'd love to meet and talk through your situation and how we can help make your investment experience as enjoyable as possible for you.
Want to take action now? Switching property management is easy, and by filling out a simple letter template we can take care of the process for you, saving a potentially uncomfortable conversation with your existing property management business.
Carnelian Property Management Newcastle NSW
We are a family-owned and run Newcastle real estate agent offering expert property management across Newcastle and Lake Macquarie.