Managing a property is not an easy task which requires time and expertise same as selling a property by keeping the interest of the owner and the buyer in view is very necessary. Property management companies and real estate agents charge for their services that’s why you need to analyze the need before hiring one. Selecting the right person for the right property can save your money and can be very beneficial in long run. However, it is costly but if you did not aware of the fee structure of their services it can become an expensive decision.
Fee structure of the Property management companies
Generally, they can charge from the following options
- Percentage rate: Property manager charge a percentage of house rent on monthly basis. The rate of percentage varies on the basis of a number of properties such as they charge 8-12% on rental income if having only one property to manage whereas 5-10% if having multiple properties.
- Fixed Fee: In this structure, a flat fee is charged by the managers whether you use their services or not. It is not paid on the basis of the work done whereas a clients need to pay in any case. This structure is preferred when dealing with buildings and managers think that they have to use most of their resources to manage properly.
- Mixed fee: It is the mixture of flat and percentage fee structure such as they charge a percentage on monthly rentals as well as provides other services which have a fixed rate. So if a client needs these services other than property management than he has to pay more money e.g. advertising services.
Fees of Real estate agents
You are not alone if you are selling your property for the first time and are unfamiliar with Real estate agent fees in Adelaide structure. All the estates in Australia are deregulated what this means is that agents can set their fees as they like considering demand and supply. With thorough research one can save a meaningful sum of money as each agent rates varies from another but to a greater extent agent have two fee structures.
- Fixed Rate Agent Fee: This is most common practice as a fixed percentage of total value of the asset is agreed upon in initial stages. Agent’s common rate is between 1 to 3 percent of the total value of the sold asset. In this structure, there is an incentive for the agent to sell the asset on a higher value as higher the number means bigger the commission is.
- Tiered Commission Rate: This is another motivating structure for the agent as it pushes the agent to sell the asset on a higher value after a specific number set is a mutual agreement. If an agent agrees on a 2% incentive above $500,000 then anything that he brings above the set value he gets a higher rate of commission over and above that number.