The science of setting agency fees

Do you ever feel like you’re working twice as hard for the same pay?

It might not be your workload…it could be your fee structure.

Too many agencies set their rates once and never look back.

Years later, they’re still charging the same percentage while costs have climbed, rents have changed, and competitors have quietly adjusted their numbers.

Setting agency fees isn’t just picking a number “close enough” and hoping for the best.

It’s about knowing exactly what your time, expertise and service are worth – and charging accordingly.

What’s “normal” right now?

The short answer…it depends on where you are.

WhichRealEstateAgent.com.au says the average management fee in Australia sits between 5% and 12% of weekly rent. Melbourne agencies are close to 6%, Brisbane’s around 9% and Hobart sits near the top at almost 9%.

Finder.com.au also points out the extremes – you’ve got some agencies charging 4% and others going as high as 15% for specialised cases. Then there’s the extras: letting fees (usually one to two weeks’ rent), lease renewals, admin charges, tribunal representation.

So, if you’ve been running with the same old number because “everyone else does”, it might be worth checking if “everyone else” has quietly moved on without you.

How to work out what’s right for you

Think of your fee structure as custom-built. Off-the-shelf might work for a while, but the best results come when it’s made to fit your agency.

Here’s what to factor in:

1. Property type

A heritage terrace with cranky plumbing? That’s going to chew up more time than a brand-new two-bedder. High-turnover student housing? Same deal.

2. Location

Out in the regions, higher percentages are pretty common because there’s less competition and more travel time. In metro areas, competition’s fierce – but don’t undercut yourself into a corner.

3. Service level

Are you offering professional photos, mid-term inspections or investment advice? That’s extra value, and it should be reflected in your fees.

4. Your actual costs

Work out what it costs you to manage a property – wages, software, marketing, compliance – and check if your fees actually cover it. You might be surprised.

The problem with “set and forget” fees

If you haven’t looked at your fee structure in years, you’re almost certainly leaving money on the table.

A yearly review can make a big difference.

Even a small bump adds up when you multiply it across your rent roll.

And with Reapit PM, once you’ve decided on your new rates, you can set them up once and the system will charge them automatically at the right time in your workflow.

Flat fee or percentage?

This one’s up for debate.

• ‍Percentage-based fees grow with rent and tend to cover you when the workload fluctuates.‍
• Flat fees give landlords predictability, which can be attractive in higher-rent markets – but they can also lock you in if rents jump.

Plenty of agencies also use a hybrid model, like a percentage plus a capped admin fee, to keep things balanced. Whatever you choose, spell it out clearly in your management agreements.

Making sure you actually get paid

You can have the perfect fee structure, but if you’re relying on memory or manual billing, you’ll miss things.

Reapit PM’s Agency Fee Ledger means once a workflow is finalised, your fee is generated automatically.

Lease renewal signed? The fee is calculated based on your settings, moved from the owner ledger to your agency ledger, and ready to be paid out – without you lifting a finger.

Quick self-check

• Have you reviewed your fees in the last year?
• Are your rates in line with your area and property types?
• Do they actually cover your cost to manage?
• Is every fee in your agreements set up in your property management software?
• Can you see exactly what you’ve billed and collected lately?

If you’re nodding “no” to any of these, it might be time for a fee health check.

Your agency fee is a reflection of your value, your costs and your market. Use the industry benchmarks are a guide, tailor them to your situation and then let the software make sure you don’t miss a cent.

If you want to see how Reapit PM can help you set, apply and collect your fees without adding more admin to your plate, book a quick chat with our team (or simply enter your details below).