Newcastle Property Management Fees and Charges - A Comparison

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:

• Signage - is there a cost to have a sign installed on location at the rental property (either a signage fee or a travel fee to transport and install the sign)? Carnelian Property Management does not charge for this and will install signage on location at your rental property.
• Photography - is photography charged as an extra cost? 
• Advertising - what does the property management business charge for advertising, including listing on domain.com.au and realestate.com.au? We offer a one-off flat rate of $185 to cover photography, copywriting and listings on both of these primary services.
• Lease preparation fee - is there a cost to prepare the lease for your property? Some agencies charge as much as $55 for this. We charge $33. 
• Lease renewal fee - when an existing tenant renews their lease with you, will you be charged? Often a real estate agency will charge one week rent to renew an existing lease. Carnelian Property Management charges for a lease preparation fee only ($33). 
• End of year financial statements - is there a cost for preparation of end of year financial statements? Some businesses charge $50 for this. Carnelian Property Management does not charge extra to provide a detailed end of year statement covering the financials of your property as managed throughout the year. 
• Monthly admin fee - is there a monthly administration, statement or office expenses fee? Typically, real estate agents charge up to $12 per month as an admin or statement fee. Carnelian Property Management charges just $5.50 for the preparation of monthly statements (including the detailed end of financial year statement) and regular disbursement of monies.
• Maintenance fees - is there an additional cost to manage any maintenance required for your property (excluding the actual cost of repairs)? Carnelian Property Management includes arrangement of maintenance services at no additional cost.  ​​

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).

Description of Cost	Carnelian Property Management	Alternative Property Management
​Management fee	$1,544 per year ($128 / mth) for single property owners ​$1,287 per year ($107 /mth)​ for multiple property owners	$1,802 per year ($150 /mth)
Signage	$0	Additional
​Photography	$0	Additional
​Advertising	$185	$200+
​Leasing preparation fee	​$33	$50+
Initial leasing fee	$450	$450
Leasing renewal fee	$33	​$450
End of year statements	$0	$50
Monthly admin fee	$66 per year ($5.50 per month)	$92.40 per year ($7.70 /mth)
​TOTAL PER ANNUM	​$2,311.00 for single investment property management (6.6% incl GST), or $2,054.00 if multiple property management discount applies (5.5% incl GST)	​$3,094.00+

In summary, you could save over $1,000 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 $800 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. ​​​​

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