Using a property manager

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Choosing an estate agent

Speak to at least two or three agents in the area.

They should have experience in property management, be able to give you a comprehensive list of the services they offer and provide you with a schedule of their fees or costs. Research the internet and local newspapers for agents to contact.

The Real Estate Institute of Victoria (REIV) can provide details of its members who have property management skills. Please note that it is not compulsory for a licensed estate agent to be a member of the REIV.

For more information, visit the REIV website.

Contracts - exclusive leasing and/or managing authority

The ‘exclusive leasing and/or managing authority’ (otherwise known as ‘the authority’) is a binding contract signed between you and the agent. In signing it, you are giving the agent exclusive rights to find a tenant and authorising them to manage your rental property.

However, in most circumstances, once your property has been let, you are not exclusively tied to that agent.

Services provided

You can expect the agent to find a suitable tenant and collect the rent; any further terms should be specified in the authority (contract).

It is common for an agent to attach an ‘instruction form’, which will also be considered part of the agreement.

The authority should state that the agent will notify you of any damage to the property, or of unpaid rent. It should specify how often they will inspect the property. Write any further terms into the contract.

For more information about rent, view our Rent and other payments section.

Fees and charges

All fees and expenses are negotiable (except any fixed by statute) and must be recorded on the authority (contract), including any GST liabilities.

Letting (or leasing) fee

Generally, this is the initial set-up cost for vetting and placing a tenant. It is negotiable and usually charged at the beginning of each tenancy agreement. Some agents also charge a re-leasing fee (also subject to negotiation) if current tenants sign a new tenancy agreement.

Management fee

This ongoing fee is deducted from the rent each time it is paid. If this fee is calculated as a percentage, ensure it is also displayed as a dollar amount on the authority (contract).

Marketing expenses

These costs may be incurred when the agent advertises your rental property. Costs will vary depending on the advertising methods you choose.

Other expenses

Examples of other expenses include statement fees, administrative and/or postage costs, Tribunal appearances and warrant of possession.

Rates, utilities, insurance, and owners corporation fees

With your written authority, the agent can arrange for municipal rates notices to be re-directed to their office and paid from the rent. They may also organise utilities charges such as water, gas and electricity to be deducted.

Other costs the agent may deduct from the rent on your behalf include insurance, owners corporation fees or special levy costs associated with ownership of a flat, unit or apartment.

You should also take out landlord insurance, which will help to insure you against a defaulting tenant or damage caused by the tenant. Shop around for the most suitable policy.

Receiving rent

Rent should be forwarded to you within a reasonable time. How long this is depends on the timeliness of the tenant’s payments and the regularity with which the agent disburses payments from their trust account.

The agent should explain their accounting timelines as part of their service to you.

For more information on rent, view our Rent and other payments section.

Repairs and maintenance

As a landlord, you may authorise your agent to arrange for urgent repairs up to a specified amount. Your authority should be written into the contract.

You must give the tenant a written statement that explains whether or not the agent can arrange urgent repairs. If the agent is authorised to arrange urgent repairs, you should also state the maximum amount the agent is authorised to spend.

You (or your agent) must also give the tenant the agent’s phone or fax number, so the tenant can contact the agent if they need an urgent repair.

If you do not authorise the agent to arrange repairs, then you must give the tenant your contact details.

For more information on repairs, view our Repairs, maintenance and changes to the property section.

Tenants vacating your property

Once notified, your agent should consult you about the process of re-letting your property. This may include advertising and showing prospective tenants through (your agent can only do this within 14 days of the termination date specified in the vacation notice from the tenant). The agent will also arrange an inspection and completion of a final condition report.

For more information on tenants vacating property, view our Ending a lease or residency section.

For more information on condition reports, view our Condition report page.

Abandoned goods

If a tenant has left goods or documents behind at the end of a tenancy, you must:

  • take reasonable care of the documents and goods 
  • take reasonable steps to notify the former tenant or resident as to where they can collect their goods and documents 
  • only dispose or destroy the goods or documents in accordance with the Residential Tenancies Act 1997.

For more information, view our Goods left behind by tenants page.

Rental bonds

At the end of the tenancy, you (or your agent) and the tenant need to agree on how the bond money is to be disbursed. This should be set out in the bond claim, submitted to the Residential Tenancies Bond Authority (RTBA).

If the tenant refuses to pay or cannot be found, you or your agent have 10 business days from when they vacated (ended the tenancy and left the property) the premises to make a free application to the Victorian Civil & Administrative Tribunal (VCAT) for an order directing the RTBA to repay all or part of the bond. You or your agent may also claim compensation over and above the amount of the bond (a fee will apply for that application).

For more information on tenants vacating property, view our Ending a lease or residency section.

For more information on bonds, view our Releasing or claiming the bond - landlords and owners page.

For more information on VCAT, visit the VCAT website.

Selling a managed property

If you want to sell your rental property with the existing lease, your agent should notify your tenant. If your agent wants to show prospective buyers or conduct open for inspections, you must follow the law regarding entry to the property set out in the Residential Tenancies Act 1997.

If the tenant’s lease extends beyond the proposed settlement date following the sale of the property, the contract of sale should specify that the property is being sold ‘subject to lease’.

Ending a property management contract

In most cases, you can terminate your estate agent’s management of your rental property, effective immediately, by written notice to the agent. Check your authority (contract) first.

You should arrange to collect keys and relevant documents from the agent or for your new agent to do so on your behalf.

Whether you choose a new agent or manage the property yourself, your tenant will need to be formally advised of the new arrangements.

Your agent may also terminate management of your property by giving written notice to you.