Not all property managers are created equal. If you’re a landlord, you’ve probably noticed that property management fees can vary significantly between agencies. Going with the cheapest option can be tempting—after all, why pay more if someone else can “manage” your property for less?

But here’s the reality: saving a few hundred dollars a year in management fees can cost you thousands in lost rent, poor tenant selection, and create some really expensive mistakes.

A property manager isn’t just there to collect rent—they’re responsible for protecting your investment, keeping your property in top shape, and ensuring your returns are maximised. And when corners are cut, landlords pay the price.

Let’s examine seven reasons why the cheapest property manager could cost you more. We’ll compare it based on a property renting for $700 p/week.

Vacancy Rates: The Silent Profit Killer

Each day your property sits untenanted is money lost. A skilled property manager knows how to keep vacancy periods to an absolute minimum. That means:

• Advertising the property early—not waiting until it’s already vacant to start the process.
• Holding inspections at convenient times for prospective tenants, not just when it suits the agent.
• Following up diligently to secure applications quickly.
• Setting the rent right from day one to avoid prolonged periods of waiting for a tenant.

Is a property sitting vacant for an extra four weeks due to a slow or reactive approach? That’s money you’ll never get back.

Let’s assume the ‘cheap’ property manager results in only two weeks’ vacancy – that’s a loss of $1,400 in our example.

Tenant Selection: The Wrong Choice Could Cost You Thousands

Not all tenants are created equal, either. A thorough screening process isn’t just about checking payslips—it’s about knowing the red flags and making an informed judgment about who is the best fit for your property.

A great property manager will:

• Conduct detailed reference checks, not just a quick call to an employer.
• Look at rental history and tenancy databases for any warning signs.
• Meet the tenants in person and assess their suitability beyond the paperwork.

An inexperienced or rushed property manager might approve the first application that comes through just to fill the vacancy. And if that tenant turns out to be unreliable, you could be dealing with arrears, property damage, or even legal battles.

With our example, it’s hard to estimate the potential cost. One of our clients recently evicted a tenant that trashed their home, their insurance didn’t cover the entire cost and they were out of pocket by over $10,000 in repairs. For this example, let’s be conservative and say it will cost you $1,000.

Inspections: Why Virtual Just Doesn’t Always Cut It

Lately, there’s been a trend in property management towards virtual routine inspections or even tenant-submitted reports. While this might sound efficient, it can come with serious risks.

Would you trust a tenant’s photos to detect mold, water damage, or pet-related issues accurately? How can small leaks, wall cracks, or deteriorating flooring be properly assessed through a video call?

An in-person inspection allows a trained property manager to:

• Identify hidden issues that tenants might not report.
• Ensure the property is being well cared for.
• Detect early signs of damage, mold, or lease breaches, such as unauthorised pets.
• Provide real-time feedback on any repairs needed to protect your investment.

While virtual inspections might seem more efficient and can be useful in the right circumstances, they often result in missed issues that can lead to expensive repairs later on. This is important for routine, entry and exit inspections, where most issues should be picked up.

Maintenance: Delayed Repairs = Bigger Costs

Every property needs maintenance—it’s inevitable. However, how issues are handled can make a big difference in both cost and tenant satisfaction.

A proactive property manager:

• Uses insured, reliable tradespeople rather than the cheapest option available.
• Ensures repairs are handled quickly to prevent problems from getting worse.
• Takes care of minor issues before they become major expenses.

On the other hand, a property manager who cuts corners might ignore maintenance requests or use unreliable trades, leading to higher repair costs and frustrated tenants who decide to move on.

New Builds & Defects: Are You Paying for Repairs You Shouldn’t Be?

If you own a newly built property, you need a property manager who understands the difference between a defect and a regular maintenance issue.

Understanding warranty coverage and defect claims is part of the job. The right property manager will handle these issues properly, saving you unnecessary costs.

Likewise, understanding insurance policies means your agent can recommend how to maximise claims to minimise your cost.

We’ve seen it happen too often—a tenant submits a repair request, and instead of checking whether it’s covered under the builder’s warranty, the property manager just sends a tradesperson out, and you get stuck with the bill. This could cost thousands, but let’s assume it’s just a replacement bathroom fan at the cost of $400, including installation

Rental Arrears & Legal Compliance: Do They Actually Know the Law?

Chasing up late rent is part of property management, but it needs to be done swiftly and correctly to prevent bigger financial losses.

A good property manager will:

• Issue notices immediately when the rent falls overdue.
• Follow legal protocols to avoid costly mistakes.
• Be trained to handle hearings and claims for arrears or damages if necessary.
• Be highly experienced in tribunal proceedings in their state

With each state’s rental laws becoming increasingly complex, having an experienced and well-trained property manager is crucial. A minor legal misstep can mean landlords losing thousands in unpaid rent or tribunal disputes.

Lease Renewals: Are You Getting Market Rent?

When it’s time to renew the lease, are you confident you’re still getting the right rent for the market?

A proactive property manager will:

• Assess rental market trends to ensure your property isn’t underpriced.
• Negotiate with tenants to maximise your returns while ensuring tenancy continuity.
• Make strategic recommendations on renewing, adjusting rent, or seeking new tenants.

Simply rolling over the lease without checking the market? That’s another way landlords unknowingly lose money every year.

The average rent increase in the last 12 months was 4.8%. When applied to your weekly rent of $700 p/week, that’s a weekly increase of roughly $30. If your ‘cheap’ property manager didn’t recommend and manage the increase, that’s a loss of $1,560 in the first year alone.

Why Are Some Property Management Fees So Low?

Before choosing a property manager based on fees alone, ask why their service is so cheap.

• Are they investing in their team, systems, and technology to ensure high-quality service?
• Do they have the experience and training to properly handle compliance and legal issues?
• Or are they just offering low fees to attract clients, build up their portfolio, and then sell off their rent roll?

A property manager charging significantly less than the market rate is cutting costs somewhere—whether it’s in staff training, time spent on your property, or the level of service they provide. And that lack of investment will eventually cost you more in lost rent, poor decision-making, and reactive management.

The Bottom Line is Cheap Fees Can Cost You Thousands

When choosing a property manager, it’s easy to focus on the percentage fee. But before you go with the cheapest option, ask yourself:

• Will they be proactive in keeping my property leased?
• Do they have the experience to place quality tenants rather than just any tenant?
• Will they physically inspect my property or rely on virtual check-ins?
• Are they on top of maintenance to prevent unnecessary costs?
• Do they understand rental laws and compliance to keep me protected?
• Will they review my rent annually to ensure I’m not undercharging?

The difference between a 5% and 8% management fee might seem big, but just one mistake—whether it’s a prolonged vacancy, a bad tenant, or a missed legal step—can wipe out those savings many times over.

Let’s take a look at our example:

Making the Right Choice for Long-Term Success

A lower management fee might seem appealing, but poor service, long vacancies, or bad tenant selection can cost far more in the long run. A great property manager doesn’t just collect rent—they protect your investment, minimise risks, and maximise returns. When choosing who to trust with your property, look beyond the fee and consider the expertise, service, and long-term value they bring—because, in property management, you truly get what you pay for.