Property management fees in Melbourne: what you should actually be paying

Most Melbourne landlords can tell you their management percentage. Far fewer can tell you their total annual cost of management, because the headline rate is only part of it.

This is a plain breakdown of what agencies charge, which extras are normal and which are not, and how to work out your real number.

The standard management fee

Across metropolitan Melbourne, ongoing management fees generally fall between 5.5% and 8.8% of rent collected, including GST. Where an agency sits in that range depends on the suburb, the type of property and how much competition there is locally.

A percentage of rent *collected* — rather than rent *due* — is the arrangement you want. It means the agency is not paid for weeks the property sits empty or a tenant falls into arrears, which aligns their incentives with yours.

The fees that sit on top

The management percentage is rarely the full picture. Common additional charges include:

• **Letting or leasing fee** — typically one to two weeks' rent plus GST, charged each time a new tenant is secured
• **Lease renewal fee** — often a few hundred dollars to re-sign an existing tenant
• **Advertising and marketing** — photography, floor plans and portal listings, commonly $300 to $900 per campaign
• **Routine inspection fees** — sometimes included, sometimes charged per inspection
• **Monthly or annual statement and administration fees**
• **End of financial year statement fee**
• **Tribunal attendance** at an hourly or per-appearance rate
• **Maintenance coordination**, sometimes charged as a percentage on top of the invoice

None of these are inherently unreasonable. The problem is that they make two quoted percentages impossible to compare directly.

How to work out what you are really paying

Take your last twelve months of statements and add up every dollar that went to the agency, not just the management fee. Divide that by the rent you actually received.

The result is your effective management rate. Landlords doing this for the first time are often surprised: a headline 6.6% can land closer to 9% or 10% once a letting fee, a renewal fee and a marketing campaign are counted in a year with a tenant change.

That effective rate is the only number worth comparing between agencies.

What a lower fee can cost you

Cheaper is not automatically better. Management fees buy attention, and attention shows up in three numbers that dwarf the fee itself.

**Vacancy.** Every week empty costs roughly 1.9% of your annual rent. On a property renting at $600 a week, three weeks of avoidable vacancy is about $1,800 — more than a full year of the difference between a 6% and a 7% management fee.

**Rent level.** A manager who is not reviewing your rent against the market at each renewal can leave you 5% to 10% behind within a couple of years. That gap compounds, because each future increase starts from a lower base.

**Arrears and damage.** Tenant selection is the single highest-leverage thing a property manager does, and it is invisible until it goes wrong.

The right question is not "what is the cheapest fee" but "what is the net return after fees, vacancy and rent level".

Questions worth asking your current manager

• What is my property's current market rent, and when was that last reviewed?
• How many days was it vacant in the last two years?
• What is your average days-on-market for a property like mine?
• What is the total I have paid you in the last twelve months, across all fees?
• Who will actually manage my property, and how many others do they manage?

That last one matters more than most landlords realise. A portfolio manager handling 200 properties cannot give yours the same attention as one handling 80.

Switching is easier than most owners expect

Most management agreements can be ended with 30 to 90 days' notice. The incoming agency handles the transfer of keys, records, bond and tenant contact. Your tenant stays where they are — nothing changes for them beyond who they contact.

If you are not sure whether your current arrangement is competitive, we will benchmark your rent, your fees and your vacancy history against comparable Melbourne properties at no cost and with no obligation to switch.