HOMES AND MORTGAGES
Is it worth it to go through real estate agents to manage the property I'm looking to rent out?
"Hi there, after scrimping and saving for the last 20 years, I've finally bought a property to rent out. My plan is to lease out the property, and use the passive income to cover my mortgage and the expenses for my kids. I work long hours, so I've opted to hire a real estate agent who charges 5.5% to manage it. Does that fee seem excessive? After spending half my life as a renter, I'm eager to get the landlord side right. We're investing a bit in updating the place to make it comfortable for the tenants, and based on the area's pricing, I'm aiming for a weekly rent of around $800 (two bedroom unit in Sydney's inner west). the agent's fee effectively reduces my earnings by about $50 per week. I'd love to hear any ideas from those with landlord experience. Cheers!"
Matteo Rossi.
10 April 2025
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Comments (2)
5.5% is actually on the very cheap end. Most of the time, after all fees are included it will be often over 10%.
I definitely think it’s worth using an agent unless you want to deal with the issues/risk/problems yourself
As a long-time property investor, I’m very glad to have someone dealing with it, but to each their own.
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5.5% is very low. Mine are in South east Qld and 7.5-8% would be more normal. Expect additional costs like admin fees (which used to cover posting out statements), letting fees (couple of weeks rent), maybe inspection fees, annual safety inspections that were once normal are outsourced and charged. I’d suggest you find out what is included and what you will have to pay on top.
At the high end of things, I had a NRAS property where the agent charged 16.5%, which included an audited report to the federal govt to get your annual tax credit. In this case there was no choice of agent.
And if you have had bad experiences on the renter’s side, the landlord has had bad experiences with agents too. You will appreciate a good agent when you find one.
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