Where Do My Property Management Fees Go? | Pursuit Real Estate

Where Do My Property Management Fees Go?

Where Do My Property Management Fees Go?


The amount you pay in property management fees will determine how well your investment property is cared for.

Some landlords will hire whichever property manager is cheapest. But a cheap property manager is actually very risky. They’ll end up being more trouble than they’re worth.

Let’s look at what a property manager does with your fees. We’ll show you the difference in management quality between agencies that charge a reasonable amount, and someone who is cheap.


Better Employees

The ideal property manager has been working in their role for as long as possible. The more experience an agent has, the more knowledge, insight, and good judgment they’ll use to benefit you.

In order for a property manager to stay in their job long term, they need a good salary.

Agencies that have low salaries will see a high turnover in staff, and are more likely to hire a manager with less experience. That means their employees will likely still be learning about the suburb and finding their footing. They may not have a thorough understanding of tenancy law, or proper practice in tough situations. This can hurt you and your property when things go wrong.

The first place your property management fees go is your property manager. A good agency can be competitive with their property managers, hiring the best of the best with years of experience, and pay them well enough to keep them long term. This way they will have years of knowledge ready to go to work for you.


More Hours Spent per Property

Here’s a trick question. If one property manager oversees ten houses, and another oversees a hundred houses, who is doing a better job?

The one with ten houses. Why? Because they don’t have to divide their time! Each investment property is getting more attention and care. Each tenant is getting more attention and care.

When you use an agency that charges minimal for property management, they will have to take on more properties to make the same profit. The property manager can be loaded with more properties to care for. This means fewer hours are spent per property. Their attention to detail is lower, and they will have to cut corners to get things finished on time.

Alternatively, an agent that is paid properly will have the time for attention to detail. They’ll complete regular inspections, and deal with problems in a prompt manner. They'll have the time to conduct through communications and perform their duties thoroughly between the tenant, the property and with the landlord.

This difference is most clearly shown when it comes to communication. A property manager who is time-poor will be so overloaded they take several days to reply to an email or are too busy dealing with urgent priorities that they are consistently putting off your smaller priority requests. Instead, a property manager ideally has fewer properties - that means less landlords and less tenants - that allows them to pick up the phone, spend their time unrushed on your issues no matter how big or small. That's something worth paying premium for.


They Use the Best Software

Every real estate agency needs to use good quality software. This helps with tracking tenant payments, accounting for payments to tradespeople, utilities, and disbursing rental income to you (the landlord!). Smart software systems also keep tracking and scheduling when leases will expire, rent schedules and reviews and when inspections are due to be performed. This helps the agent keep your property and your tenancy and your rent account at their very best.

However, good quality software costs money. And cheap agencies will often attempt to make-do with affordable software that performs less functions and cuts corners. They often use an excel spreadsheet, or calendars/diaries to keep track of things. Unfortunately, this forces them to check up all their schedules manually. This allows for human error.

If you are paying low fees, it's likely every other landlord is too. The agency will be stretched thin and won't be able to make do with the best.

An agency with proper software will never miss a deadline. They’ll be on time, consistent, and always ahead of schedule, instead of floundering to catch up.


They Keep Your Tenants Happy

Tenants who are happy in their home will care for it well and stay there longer. Using a good property manager will go a long way to keeping your tenants happy. Your agent will be accessible to your tenants and easy to reach.

A property manager is there to keep a great relationship with tenants and ensure their needs are dealt with so they can continue to pay you are rental income. Unfortunately, the property managers at low-rate agencies will frequently not have time to keep good relationships with tenants. They’ll be hard to contact and forever on the move. Emails will be ignored and maintenance jobs will get put off for weeks, risking further damage.

This is why you want a property manager who can afford the time to spend on each property. Your tenant will rarely have to contact them more than once. This will build trust in you – the landlord – and help the tenant feel comfortable. They won't want to leave and will be eager to keep paying rent.

Remember: happy tenant, happy life.


They Keep the Property Occupied

Every property management agency has a tenant pool, a list of tenants looking for a home. A good agency is already spending time behind the scenes screening the potential list of tenants.

This means as soon as you want a new tenant in your home, the property manager will have options lined up and ready to go.

You may not see the work for this job taking place. But it does happen in the background. And it saves you a lot of time when you need it.

A cheap agency will only begin looking for tenants when the property goes on the market. Worse, they are likely to approve the first applicant that looks remotely good.

You want a property manager who will be thorough when finding new tenants. They will do the background checks, they will compare the different applicants, and find someone safe and trustworthy to live in your investment.



Pursuit Real Estate prides themselves on their attention to detail. We never cut corners. We never stretch ourselves too thin. And we always have time to take care of your investment property. Go with the service that you can trust to get the job done right.