Survey: Investors kept in the dark about property management fees
- January 7, 2019
When you have an investment property, the management fees you pay every month can add up very quickly. Most property managers don’t openly discuss their fees with their customers and, in many instances, these fees are decided case-by-case. There’s a good chance you may end up paying more than other investors with similar properties to yours.
To shed light on the issue, we recently independently surveyed hundreds of property investors across Sydney about their property management fees. The survey revealed some interesting findings:
- Inner-city properties which rent at $600-800 per week pay an average of 6% in property management fees (or $2,300 per year) while properties renting at $1,200 per week or over pay 6.6% (or $4,900 per year). This is a difference of $2,600.
- Women pay about $50 per year more than men.
- Investors aged between 55 and 65 paid the highest rates across Sydney – an average of 6.7%.
:Different is committed to bringing transparency to investors and the industry as a whole. The fact that property managers hide their fees to avoid competing simply leads to bad outcomes for investors.
The reality is that weekly rent has no bearing on the cost of managing a property. A $800/w property doesn’t cost twice as much to manage as a $400/w a week property. The cost of management is the same, so why are you paying twice the fee?
When you buy $100 worth of petrol, you know from 30m away what the price is going to be. But when you are spending thousands on property management, you need to schedule a meeting, negotiate, and then add up all the hidden costs, just to figure out what you’re going to pay? That just doesn’t make sense. Why don’t agencies just post their fees on their website?
The :Different model is all about transparency and complete visibility. As well as offering a $100 fixed-price monthly property management fee with free Landlord Insurance and a Rent Guarantee for the first year, there are no “hidden extras”. So you know exactly what you’re getting from the start.
To showcase the results of our survey, we have created an easy-to-use, interactive microsite at different.com.au/transparency. You can anonymously enter your postcode and property management fees to instantly see how your fees compare to others in the same area. Plus, we’re constantly updating the data based on what owners enter – so you know your information is always up to date.