Residential Management Types (Net, Hybrid & All-Inclusive)

For most of Australia, there’s only one kind of residential management agreement, and it typically operates similarly to what we classify in Western Australia as a “Net” management. But in WA, residential managements are categorised into three distinct types based on the number and type of fees that can be charged under each agreement.

These classifications aren’t just technicalities – they have real implications when it comes to valuation, revenue generation, and the long-term performance of your rent roll. If you’re a real estate business owner in WA, understanding how your managements are structured is essential.

Here’s a breakdown of the three residential management types used in WA:

Net Residential Management

A property is classified as a Net Residential Management if it includes a letting fee plus three or more of the following core ancillary fees:

• Routine Inspection Fees
• Property Condition Report Fees
• Final Bond Inspection Fees
• Lease Renewal Fees

This is typically the most revenue-positive structure and reflects a comprehensive fee model. If your portfolio includes a large proportion of Net managements, it generally contributes to stronger returns and higher valuation multiples.

Hybrid Residential Management

The Hybrid classification applies where fewer than three of the core ancillary fees are chargeable, with or without a letting fee.

Whilst Hybrid structures typically charge higher management fees than Net Residential Managements, they only offer partial ancillary fee recovery without the full margin of Net Residential Managements. They’re common, but they may require closer monitoring to ensure profitability.

All-Inclusive Residential Management

As the name suggests, All-Inclusive managements do not charge any of the four core ancillary fees, nor do they include a letting fee. Whilst they typically charge the highest management fee percentage, these agreements provide limited flexibility for revenue generation and are typically the least favourable in terms of profitability and valuation.

Why It Matters

The composition of your rent roll – and how your residential managements are classified – can significantly influence your business’s performance and future saleability. Whether you’re preparing for an acquisition, planning for growth, or simply wanting to optimise revenue, it’s important to know where your portfolio sits.

At Pendium Advisory, we analyse these classifications as part of every valuation, acquisition strategy, and business performance review. If you’d like to understand the breakdown of your rent roll and its impact on business value, our team is here to help.

Want to know where your portfolio stands?

Reach out to us for a confidential discussion.

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