TWELVE Different Management Fees and Leasing Fees Every Agent Should Know (10 minutes)

1. Traditional Management Fee (Percentage-Based)

This is the most common management fee we see across Australia, New Zealand, and the United States. It's a percentage of the rent collected, usually 5%-10%. It’s simple, straightforward, and widely accepted.

2. Management Fee Based on All Monies Collected

Instead of just charging based on all rent collected only, you charge a fee on all monies collected, such as water charges.
For example, "Mr. Smith, we charge 8% for all monies collected, not just the rent." This can boost your revenue, especially in regions where you manage additional water cost collection.

3. Fixed-Rate Per Month

Some agencies opt for a fixed fee, such as $200 or $300 per month, or a weekly fee like $25 or $50.
This fee structure simplifies things for the owner, but be sure your management agreement allows for rate adjustments without requiring additional signatures.

4. All-Inclusive Management Fee

This type of fee rolls everything into one. Leasing fees, marketing fees, and other fees are bundled into a higher management fee.
But beware, this model only works if the number you’re charging is high enough to cover all those services.
I’ve worked with agencies that charge 16.5% or even 18.5% for an all-inclusive fee, but it needs to be backed by a solid script to sell it effectively.

5. Hybrid All-Inclusive Fee

In a hybrid model, you charge a lower management fee but still have separate charges for certain services like leasing and marketing. This can make the fee structure seem fairer to owners, especially if their property remains occupied for several years without needing new tenants.

6. Vacancy Fee

Yes, some agents charge a vacancy fee! It’s rare, but I’ve seen it happen.

For instance, a $50 weekly charge for managing the property while it’s vacant. After all, you're still responsible for checking on the property, ensuring the gardens are maintained, and keeping it secure.

1. Standard Leasing Fee
This covers the entire leasing process, from tenant selection to processing applications, and everything in between. It typically ranges from one to two weeks' rent, plus GST (in Australia and New Zealand). In the U.S., this might be charged as a percentage of one month’s rent, for example, 50% to 100% of a month’s rent is common.

2. Annual Leasing Fee
Rare, but it exists—primarily in the Northern Territory and Tasmania. This fee charges owners a leasing fee annually, regardless of tenant turnover.

It could be one week’s rent, billed yearly.

It's uncommon, but some agents make it work.

3. Lease Preparation Fee
This fee is common in New South Wales, where agents charge owners for preparing the lease document.
Initially set at $30, many agents have successfully increased this fee to $99. If you’re still charging the bare minimum, it’s time to review that.

4. Tenancy Database Check Fee
This fee is straightforward. It’s a charge for accessing databases like NTD or TICA to check tenant histories. It’s an essential step, and owners should pay for the added security.

5. Lease Renewal Fee
One of the most undercharged fees! Too many agents undervalue this, charging $40 to $60 for a renewal. But think about the cost to the owner if a tenant leaves during a quiet time—weeks of vacancy, lost rent, and re-leasing fees. A fixed-term lease protects the owner from these losses, so you should feel comfortable charging half or even a full week’s rent for this service.

6. New Tenancy Onboarding Fee
This fee covers the administrative work involved when you inherit a tenant. Even though the tenant is already in place, there’s still work to be done. Some agents charge up to one week’s rent for this service, and it’s completely justified.