What is a letting fee

Letting fees are charged when a new tenant is found for property and generally covers a range of actions not limited to marketing of the property, processing applications, completing credit checks, organising tenancy agreement and condition report. Letting fees are generally charged to the tenant and the average fee charged is 1 week’s rent plus GST.

There has been a lot of talk and media publicity the proposed bill change. The proposed bill change is that that no person, including property managers, can require a tenant to pay a letting fee, or any other fee, in relation to a tenancy.

Showing your landlords that you are an expert in the field of property management- not just showing them how much rent they can get for their investment, but also your knowledge of insurance products that are available to assist them when things go wrong. Your job is to highlight this because as a professional agent who is managing their property, they are able to access the REAL Landlord Insurance policies. Without an Approved Property Management Company, a landlord cannot access REAL’s policies.

There is a lot of talk about pending letting fee legislation changes and some general concern about the effect this will have on cash flow and resources alike. The reality is business will go on, being proactive and getting ahead of the pending change is in our opinion a much better course of action than doing nothing.

The majority of clients are very accepting of fee introductions or increases when they are explained correctly. Explaining clearly both verbally and in writing is paramount. Initial and ongoing training sessions with staff are probably one of the most helpful aspects to fee changes, ensuring confidence in your team.

Another helpful hint is to introduce a discount to the new fee for current clients and full fees with the introduced fee to new clients, showing your current clients a courtesy for their past business with you.

Here are some suggested fees to introduce to your fee structure:
– Leasing fee
– Internet marketing fee
– Professional photography fee
– Video walkthrough fee
– Lease renewal fee
– Routine inspection fee
– Ingoing inspection fee
– Final bond/inspection fee
– Monthly admin fee
– Annual statement fee
– Tribunal attendance fee
– Account/tenancy setup fee