Property Management Fees In Auckland

Mar 10
7 min read

How Much Does a Property Manager Cost in NZ?

Partnering with a Property Manager can be one of the best moves a landlord makes for their rental. It saves time, reduces stress, and helps boost rental income. But there’s often a lot of confusion about the costs since many companies don’t clearly lay out their fees and charges, often pressuring you to give over information before they share their fee structure.

So, what is the real cost of a property manager in Auckland? What should you consider before signing a management agreement?

A common mistake landlords make when selecting a property manager is focusing solely on the management fee percentage while ignoring other possible costs. It's important to be mindful of hidden charges and check if fees are applied to outgoings.

Knowing exactly what you're paying for is crucial, especially if you've been managing your rental property previously. You understand that some weeks need little effort, while others require more attention. If you're paying $60 per week for property management, think about how this money is being used and why an agency might be charging extra fees?

Without a doubt, your rental property is probably your largest investment. While it's important to scrutinise management costs, you shouldn't sacrifice the quality of a Property Manager. Ensuring the property is well-managed is crucial for achieving the best possible return on investment.

At Kimpton Property Management we pride ourselves on having a “no hidden fees” policy and a “no fees added to outgoings” policy. We believe a Management Fee is just that, a fee for us to manage your property as you would, which includes going to inspect the property or organising maintenance! We have this all publicly available so before you join us, or even before you give us your details, you’ll know exactly what you’ll be paying and more importantly what you won't be paying extra for!

Here's a summary of the common property management fees you might encounter in New Zealand, along with a description of the fees we charge.

Most Common Property Management Fees in NZ

1. Management Fee

This is the main fee you’ll pay for day-to-day property management services. It’s usually a percentage of the rent collected, ranging from a low as 5.99% to 12% and typically covers:

Rent collection, reporting and arrears management
Communication with tenants
Organising maintenance and repairs (occasionally, see below)
Handling tenancy issues and ensuring property compliance to changing legislation

At Kimpton Property Management, we charge a management fee of 6.50%, which is capped at $37/week plus GST ($42.55 including GST). There's no justification to pay more than this because, generally, if an agent finds reliable tenants, the property doesn't need constant oversight.

Many companies provide discounts to owners managing multiple properties, though the fees can still reach up to 10% of the rent collected.

For owners with 2 properties managed by Kimpton Property Management, our management fee is reduced to 6.0%, capped at $34 + GST.

We are open to negotiating rates with landlords who have multiple properties with us, considering factors such as the distance between properties and the total number of properties under management.

Why? Because fewer owners with more properties means less work and lower operating costs, and we're happy to pass these savings on to you.

2. Maintenance and Outgoings Fees

Most Property Management agencies charge a management fee on top of the cost of any repairs and maintenance, this could be anywhere from 5% to 12%.

At KPM, we include maintenance and repair coordination in your management fee, so there are NO extra charges for these services or for us to pay any outgoings. Maintenance isn't required weekly or even monthly, so charging a fee for maintenance coordination makes you question the purpose of a management fee.

With Kimpton Property Management, you have a clear understanding of the costs for our services and any essential work on your property, and we have no incentive to undertake unnecessary work on your property.

As an example, an agency might propose a management fee of 8%, but they apply this fee to all your expenses and maintenance costs as well. You can't predict how many maintenance bills you'll get, each with the 8% fee added. If that's not enough, many agencies also apply this fee to every water and rates bill they handle on your behalf!

In 12 months you might pay:

$3,800 in council rates + 8% fee = $304.00
$700 to fix the heat pump + 8% fee = $56.00
$500 for a leaking Roof + 8% fee = $40.50
$300 fixed water charges + 8% fee = $24
$400 for an end-of-tenancy clean + 8% fee = $32
$1,000 tenant water charges + 8% fee = $80.00

In addition to the weekly management fee, you would incur extra charges amounting to $536.50 annually for maintenance and outgoings fees.

If you have the rental managed for 10 years, you're looking at more than $5000 in added fees.

Kimpton Property Management doesn't charge you any of these added fees!

3. Letting and Advertising Fees

When a new tenant is found, letting fees and advertising fees usually apply, typically costing you 1 weeks rent + extras. This covers:

Photographing and Advertising the property
Organising and conducting viewings
Communicating with, screening and vetting applicants
Preparing the tenancy agreement and bond documentation and lodgement

At Kimpton Property Management, we have a very competitive letting fee of $389 + GST, and offer a discounted Premium Gold Trade Me Listing upgrade for $165 + GST (normally valued at around $350). Alternatively, a standard Trade Me listing is included in the base letting fee.

If you've been managing the property yourself and it's already listed on Trade Me, we lower our Letting Fee to $249 during onboarding, as a new listing isn't necessary (unless you want one!).

4. Routine inspection Fees

Some companies charge an additional charge for routine property inspections, whereas others incorporate this into their management fee. These fees could range from $40 - $100 per inspection. Regular inspections are essential for safeguarding your investment, ensuring maintenance issues are picked up early and that tenants are keeping the property clean and tidy. Most insurance policies mandate them every three months to maintain policy validity in the case of a claim.

3 Monthly Inspections are included in our management fee at Kimpton Property Management and you will receive a report to prove it! Many companies that include routine inspections in their management fee do not complete inspections in a timely manner or at all while others claim to need an incentive to get them done. With our post-inspection reports you'll alway's know they've been completed, no incentive needed!

5. Professional Photography Fees

We include photographs taken by our staff free of charge and we do our best to showcase your property in all of its glory! However, we aren't professional photographers so an optional upgrade is offered which can attract more viewers to your property.

Most of the modern-day house hunting process is done online, rather than in person so having a top quality advertisement is almost as important as having a top quality property. Well-presented listings often command a higher rent's because of this added interest. Our professional photos start at $289+GST.

6. Tenancy Tribunal Representation Fees

The unfortunate reality is sometimes even the best tenancies result in a tenancy issue escalates to the Tenancy Tribunal. Most property management agencies charge a fee to represent the landlord which can range from $50 - $100 per hour. We charge $55 per hour for preparation and attendance at the Tribunal, in the unlikely event we must attend.

Why is there is so much out there?

There is a lot of money in property, and the industries involved in its management and sales are well aware of this. Many well-known brands exploit this fact to inflate prices, which primarily benefits them financially and doesn't always result in the expected level of care for the property.

A well-managed property attracts better tenants, achieves higher rent, has less vacancy, and experiences fewer issues, ultimately resulting in better returns. Factors that can influence fees include:

Location of the property
Number of properties managed
Type of property (residential vs. commercial)
Level of service or specialisation
Experience and track record of the property management company

Choosing Your Property Manager

Before deciding on a property manager make sure you look around and compare offers.

Is there a charge for Routine inspections? If yes, what is the cost?
What is the contract term I need to commit to?
How often do you do inspections and how will I know?
Do you offer property viewings on weekends or evenings? Is there a criteria for this?
How much is your letting fee and other costs related to finding tenants?
What are your business hours? Are you available 24/7 for contact outside these hours?
How many properties is each manager responsible for?
Do you apply additional fees to maintenance expenses and other costs?
What additional fees do you charge?
How do you communicate with me, and how frequently?
How are water bills paid, and do you include a fee for them?
What is the process for tenants to submit maintenance requests?
How often do you disburse the rent you collect to landlords?
Do you charge for preparing my end-of-year financial statement?
Is property management your primary focus, or do you also engage in real estate sales?

If they can’t answer these questions or their answers don't sound good, then keep looking!

Many well-known agencies will caution against choosing a property manager with lower fees. However, it's important to remember that paying more doesn't necessarily mean getting more. Typically, property managers handle a portfolio of 100-150 properties. If each property collect a base management fee of on average $55 for the property manager and then charges fees on top of this for actually managing the property (arranging maintenance and doing inspections), it's worth questioning the agency's true motivation.

Kimpton Property Management is so sure you'll like your service with us that we don't lock you into a contract. You can try us, enjoy the savings and if you ever want to stop using us, just give us 21-days notice and we will transfer the property back to you or to another Property Manager. No hassle and less risk than being stuck in a contract with a property manager who might not be the right fit for you.

Talk to Us First

We're always happy to have a no obligation chat. Ask us the questions above and any others you might have and you can be satisfied with our answers!