Two main versions of a Property Managers commission and one that you may not have heard of.

If you have looked into engaging a property manager then chances are you have been given a rundown of what they charge to perform their service on behalf of the landlord.

In New Zealand there is two overwhelming majorities in the manner that Property managers will charge for their services.

The first, and likely most common, is that the property manager will charge a set fee on the rent they receive from the tenant. They will use this as their base income then also add on charges for numerous types of work they may perform like routine inspections, lettings and maintenance work. An example of this is 8% commission on rent received with add ons like $50 for a routine inspection, $500 for a letting, 10% on any invoice in which they arrange the maintenance and $20 if they have sent out an end of year account statement. There are about 10 other items that can be added to this list. The benefit of this structure is that the landlord pays a base fee for the base service then works on a pay as you go scenario. This is great if you have an insurance policy that only requires 6 monthly inspections (less inspections fees) or have a new build that will be under warranty and have no maintenance invoices, however can be complicated and niggly to figure out if you ever came out on top or not. Then an unexpected letting can blow the landlords budget out of the water.

The second option is similar in the sense that a fee is charged on rent accrued. But that is it. It is all inclusive and the landlord will not see add ons for any inspections, tribunal hearings, marketing content etc. I.e the property manager charges 9% commission and that is it. This model is much more simple. The landlord knows exactly how much they will be paying every week and can plan ahead to budget accordingly. No surprises in fees for an electrician going out or a credit check when you have a change of tenant.

The third, and rarely heard of, option is the concept of a flat fee. Say $60 per week regardless of how much rent you bring in or what jobs are done. This has a feel to the all inclusive option however some landlords get a great deal and some not so much depending on how much rent is brought in when comparing to the other two options.

All three options fit their own certain niche and the most important thing to note is that the property manager has the tools available and backing to do their job well, as serving the tenant and landlord should be the utmost priority.

At Kōwhai Coast Property management we utilise the second/all inclusive option. We believe in keeping it simple and if we charge a commission to a landlord to do our job then we should not be adding on extra costs for carrying out that commitment. We are also proud of the fact that our set rate is highly competitive with operators utilising the ‘add-on’ model due to our effective economic, cloud based and mobile structure. After years of analysing the market we believe we have found the balance in a fair offering for all involved to ensure that the best possible service is still achievable whilst still being highly economically competitive. Reach out to us today to find out more!