As you will have heard in the media, the government has banned the charging of letting fees to tenants from the 12th December 2018.
Significant amounts of time and effort go in to securing a good quality tenant and so the cost of this will need to be passed on to you, the owner of the property.
Many Property Management companies have developed a blanket approach to how they will recoup this fee. We feel that every property is different and as such we have decided to offer our owners a choice.
The options in general will be
1. an increase in the management fee (this will not increase any maintenance or billing fees, just the management fee) of approximately 2% with no additional letting fee charged. This would be the best option for owners with an expected high turnover of tenants.
2. no increase in management fees and a charge of one weeks rent including GST payable when a new tenant is signed up. This would be the best option for owners with an expected low turnover of tenants.
3. no increase in management fees and a charge of one weeks rent including GST payable in monthly installments over a maximum of 6 months, when a new tenant is signed up.
4. an increase in the management fee (this will not increase any maintenance or billing fees, just the management fee) of approximately 1% and a charge of 50% of one weeks rent including GST payable when a new tenant is signed up.
I would also consider putting the weekly rent up between 1% and 2.5% to assist you in recouping these costs. Further to this, I would suggest that when advertising a property, we add on 2.5% to the current rent to make it fair on the current tenants.
