Letting Fee

What is a Letting Fee?

A letting fee, also called a letting commission, is a payment made to the letting agent by the landlord for the services rendered. The fees and the portfolio of services provided differ from agent to agent. Some of the regular services include tenant finding, property management services, and reference checks.

FAQs about Letting Fees

What is the difference between letting fees and property management fees?

A letting fee is incurred only when the letting agent has found and placed a tenant in your property - essentially, a property has to be rented out if there’s to be a letting fee. This is a one-off payment that’s made at the beginning of a new tenancy and is taken out of the tenant’s first payment.

On other hand, a landlord is charged a property management fee by the property manager for the day-to-day services of managing the property, such as organising repairs and maintenance, conducting routine inspections and such.

The management fee is usually a percentage of your rental income. It can vary between 5% and 8% - it can be more or less depending on the property manager and the state.

Are letting fees always the same?

This will vary depending upon the level of services provided, the property management agency that you have hired, as well as any state laws that may apply at the time. Letting fees in NSW will generally be 1-2 weeks rent, similar to letting fees in QLD and SA.

If you have switched property managers mid-lease, the new agent usually will not charge a letting fee from you, because they are not yet required to find prospective tenants for the property.

In the same way, some professional property managers are happy for you to only hire their services to find a tenant, in which case a letting fee will be in order. However, they may not be managing the property overall for you, and therefore you don't need to pay them management fees.

What is the difference between a letting fee and a lease renewal fee?

A letting fee is incurred when an agent finds a new tenant for a vacant property - the agent then performs all the necessary checks, draws up lease agreements, and collects bonds and lodging with the RTBA (in VIC).

A lease renewal fee is charged when a next-term lease agreement is negotiated with an already existing tenant. In other words, an agent charges a lease renewal fee for negotiating another lease term with the tenant - the agent will discuss the terms, draw up the lease and make sure that it’s signed by both parties.

Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.

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Letting Fee

What is a Letting Fee?

FAQs about Letting Fees

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