Hefty Management Fees Add to Escalating Costs of Real Estate in Hong Kong

Posted: Sep 15 2017Last Updated: Sep 15 2017


15 September 2017 - Just as you finalize your flat or negotiate your new lease, you'll be compelled to talk about management fees. According to SCMP, management fees are reasonable in Hong Kong considering the benefits they provide tenants and landlords. People can expect to pay 10 percent of the total rental figure.

As with property prices themselves, management fees vary on the location itself. They are set by property management companies hired by building owners or owners' associations. 

Joshua Miller explains that there is generally no room to negotiate management fees. He explains, "If you’re buying or renting a flat, bargaining power of around 5 to 10 percent below the asking price might be achieved, whereas management fees are fixed and beyond the landlord’s control."

He adds, “the market practice is generally to bracket property management costs into the rent paid by the tenant – so property management is included in the monthly rent about 90 percent of the time,” Miller says. “A few landlords do choose to separate the management fees, though it is not negotiable as it’s still a fixed cost to the landlord.”

He advises tenants or buyers to take everything into consideration, including management fees, and look at the overall cost of the property relative to the value – its size, facilities, and location – but also areas of potential savings. For example, an in-house gym may avoid the need for outside gym membership. A central location might cut down on monthly transport costs.


Click here to read the full SCMP article. 

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