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Responding to “But what’s the Management Fee for?” (6 minutes)

When property owners ask, "But what's the management fee for?" it’s a golden opportunity to explain the value of your services.

This video article reveals why you should confidently charge for tasks like inspections, repairs, and rent collection—services that many property managers include for free.

By shifting your mindset and realising there’s no rulebook dictating what a management fee must cover, you can start charging what you're worth.

Agencies that adopt these strategies often face little to no resistance from owners. It's time to rethink your fees and ensure you're compensated well for the difficult work that you do.

Hi, Darren Hunter here. One of the most common objections I hear when I suggest new fees or better fees is, “But Darren, what’s the management fee for?”

It’s a common mindset barrier for many property managers, so let’s break this down.​

Here’s Why I Charged the Final Inspection Fee!

Back in 2000, I started working at an agency as a senior property manager, earning commission on the total fees brought in. I took one look at the fee structure and knew we could do better. I made changes and introduced new fees, including one I’d never seen before—a final inspection fee.

I was in South Australia, and none of my competitors charged for this, but I knew final inspections were time-consuming and stressful, so I figured it was worth charging for.

Here’s the kicker: in the three years that followed, not one owner questioned it. And my rivals never charged it either. Yet, it wasn’t an issue—no one complained. Not ever!

So, when I suggest agencies start charging for routine inspections, repairs and maintenance, or a tenant exit fee (for the work involved from when a tenant gives notice until the bond/security deposit is refunded), the response is often, “But Darren, what’s the management fee for?”

No Rulebook Anywhere Says What a Management Fee Covers

Here’s the thing—there is no official rulebook that says what services must be included in the management fee. If no legislation dictates this, it’s purely your mindset that limits you.

Let’s be reasonable for a moment. If you believe those additional fees should be covered under the management fee, then why are you charging separately for leasing, marketing, or lease renewal fees? Why isn’t everything rolled into one management fee?

It’s because, somewhere along the way, you’ve decided that those particular services warrant an additional charge. It’s simply how you view it.​

Rent Collection is a Form of Debt Collection

Now, think about this: if you had to go chase a debt then debt collection agencies typically charge 20-30% for their services.

Rent collection is essentially a much softer form of debt collection. Tenants pay their rent voluntarily, but if they don’t, you have to chase them with phone calls, SMS, emails, and, if necessary, a legal process that could end in eviction.

Isn’t that worth something if you were to put a fee on this? Shouldn’t your 5%-8% management fee be justified on rent collection alone?

In fact, many agencies now call it a ‘rent collection fee’ instead of a management fee, and owners don’t even question it. It frees you up to charge for other services, and owners are willing to pay.​

Charging a ‘Repairs and Maintenance’ Fee: Why You Shouldn’t Be Afraid!

One of the most common hurdles for Australian agencies is charging a repairs and maintenance fee. Interestingly, in New Zealand, around 50% of agents already charge this fee, and it’s rarely questioned. In Australia, I’ve seen the same trend—owners don’t resist the charge.

In South Australia, for instance, three agents I know charge a repairs and maintenance fee.

They operate in different markets and are surrounded by competitors who don’t charge this fee.

I asked one of these agencies if they get any pushback from owners, and their response was,

“We’ve been charging this fee for 12 years, and no one has ever questioned it. We don’t care what our rivals do.”

This is the reality with these ‘add-on’ fees: if you ask for the fee, you’ll get the fee!

Owners are mostly focused on the management fee and rarely question these additional fees if they are positioned correctly.

Shifting Your Mindset: It’s Time to Charge What You’re Worth!

Many agencies I’ve worked with initially believed fees like a routine inspection fee had to be included in the management fee. But when their BDMs started asking for this fee separately, they were surprised to find that owners didn’t question it.

The key takeaway here is that you need to start charging what you’re worth. Just because your competitors aren’t charging for certain services doesn’t mean you shouldn’t.​

Start Charging Extra Fees!

The next time you hear, “What’s the management fee for?” remember that there’s no rulebook telling you what has to be covered. It’s your business, and you have the right to charge for additional services like repairs, maintenance, or routine inspections. The market is changing, and more agencies are realising that they can and should be paid fairly for the work they do.

It’s time to give it a go. You might be surprised at how little resistance you face from owners.

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