Key Summary
- Property managers bridge gaps between landlords and tenants, handling tasks like rent collection, maintenance, and legal compliance.
- Professional property management offers efficiency, local market expertise, and adherence to UK’s rigorous letting standards.
- Costs for property management services in the UK vary, with fees based on service scope and property value.
What does a property management company do?
Essentially, a property management company is used to bridge the gap between you as a landlord and the tenants living in your properties.
A property manager’s duties include ensuring your rental properties are well maintained and adhere to health and safety regulations and other lettings legislation. When looking to appoint a letting agent to manage your property, you should look for:
- A local and respected letting agency
- An agency whose property managers are organised and have a good reputation
- A good communicator
- A calm and considerate personality
Top Tip: Hiring a property management company can significantly reduce a landlord’s administrative load. They ensure rental processes align with ever-changing UK regulations, enhancing both profitability and compliance
What are property management responsibilities?
1. Finding the Right Tenants
When you need someone to live in your rental place, property managers have got your back. They’ll use a tenant referencing system to look into who the tenant is, their job, if they’ve been good renters before, and if they’d be a good fit for your place.
2. Handling Paperwork and Keeping Track
Once a tenant is ready to move in, there’s a bunch of paperwork to do. Property managers help with that, making contracts and keeping a list of what’s in the house, so everyone knows what should be there when the tenant moves out.
3. Keeping Deposits Safe
When a tenant pays a deposit, property managers make sure it’s kept safe in a special place. This way, both landlords and tenants can be sure it’s there when it’s time to give it back.
4. Getting the Word Out about Your Property
Need people to know your place is up for rent? Property managers can help. They’ll put it online, maybe in newspapers, and even arrange for people to visit and have a look around.
5. Collecting Rent and Sorting Out Late Payments
Every month, like clockwork, rent needs to come in. If someone’s late or forgets, property managers are there to give them a nudge.
6. Looking After the Property
Houses need looking after. If something breaks or goes wrong, property managers will get someone in to fix it. Even in the middle of the night!
7. Checking the Rent Price
Sometimes, how much rent you ask for needs to change, but there are strict rules in place to insure it is a fair rent increase. Property managers keep an eye on this, suggesting when it might be time to ask for more or maybe a bit less.
8. Visiting the Property Now and Then
Every so often, property managers pop by the rental to see how things are going. They’ll let landlords know if there’s anything they should know about.
9. Renewing the Rent Contract
When the time comes for a tenant to decide if they’re staying or going, property managers handle all the paperwork and chats to make things smooth.
10. Helping Tenants Move Out
When it’s time for a change, property managers help make sure tenants leave the place in good shape and get back their deposit if everything’s okay.
11. Keeping Everything Above Board
Rules and laws change all the time. Property managers make sure everything’s done right, so landlords don’t have to worry about missing something.
What does a property management package include?
Most letting agents offer a variety of property management services to suit individual landlords’ needs. Property management often starts with a basic tenant find package, where the letting agent will:
- Complete a rental valuation
- Assist with obtaining a valid Energy Performance Certificate
- Market the rental property on the major property portals
- Undertake accompanied viewings with potential tenants
- Complete tenant referencing and financial checks
- Provide a tenancy agreement and other documentation
- Arrange a gas safety certificate
- Ensure the property is fully compliant
- Collect and protect the tenant’s deposit
A full management service, meanwhile, should include all of the above, plus:
- Rent collection and arrears chasing, if necessary
- Arranging ongoing property maintenance and repairs
- Completing regular property inspections
- An annual rent review
- Tenancy renewals
- Arranging deposit return at the end of tenancies
Why should I use a property management company?
Employing a property management company can offer landlords peace of mind. They bring expertise, professionalism, and industry knowledge to the table. Utilising their services means landlords can ensure their properties are rented out more efficiently, maintained better, and are kept up-to-date with evolving legal requirements, thereby ensuring both the tenants’ safety and the landlord’s security.
Who needs a property management company?
Property management can be tricky. There’s a lot to juggle – from handling tenants and looking after the place to keeping up with all the rules. It’s not easy for everyone.
Many landlords, whether they’ve been doing this for years or just started, choose to get some help. They hire property management companies to handle the tough stuff. So, who might find these services handy?
Let’s break it down.
First-time Landlords
Jumping into the landlord role can be daunting, with a slew of new tasks from understanding tenant rights to managing disputes. And nobody wants those early mistakes that can end up being pricey. Property managers can guide these newcomers through the process, preventing common pitfalls.
Landlords with Multiple Properties
Juggling numerous properties? It’s a challenge ensuring each one is cared for properly. Property management companies can simplify things with their systems, making rent collection and upkeep a breeze.
Overseas Landlords
Being miles away from your rental property has its challenges. From emergency repairs to keeping up with local market trends, there’s a lot that can slip through the cracks. A local property manager can be your eyes and ears on the ground.
Investment-focused Landlords
For those who view property letting as a business opportunity, daily management can be a distraction. Property managers can help optimise returns by keeping properties in top shape and ensuring they’re always filled with tenants.
Busy Landlords
Got a day job or other commitments? Property issues don’t wait. An unexpected repair or tenant concern can pop up any time. A property management company ensures there’s always someone on-call.
Elderly Landlords
For senior landlords, overseeing property can be both physically and mentally taxing. Bringing in professionals offers peace of mind, allowing them to enjoy their golden years without property-related stress.
Benefits of a property management company
Property management companies bring a multitude of advantages to landlords, especially those who are looking to maximise the profitability and efficiency of their rental properties. Not only do they streamline the process, but they also ensure that both landlords and tenants receive a service that adheres to the highest professional and legal standards. Here are some of the many benefits that come with utilising a property management company:
1. Regulation and Professional Standards
All letting agents in the UK have to be members of an independent complaints body, this can be either The Property Ombudsman or The Property Redress Scheme. These memberships ensure that agents operate within a rigorous code of practice, holding them to a consistently high standard. This also means that if any disputes arise, there are established channels through which they can be addressed.
In addition, letting agents are required to be part of client money protection schemes, like Client Money Protect and Safeagent. These schemes are in place to offer landlords a safety net, ensuring they are compensated if a situation emerges where the agent faces financial challenges or becomes insolvent.
2. Deposit Protection
Protecting tenants’ deposits is more than just best practice—it’s a legal obligation for landlords. Failure to adhere can result in significant fines and complications when trying to end a tenancy. Property management companies take this burden off the landlord’s shoulders by ensuring that every deposit is protected in accordance with the law, providing peace of mind and legal protection.
3. Systemisation and Efficiency
One of the underrated benefits of hiring a property management company is the efficiency they bring. From creating legally binding tenancy agreements that protect both parties to implementing systems that ensure the smooth onboarding of new tenants, property managers have tried and tested methods to streamline operations. This reduces the chances of oversight and errors, which can be costly both in terms of money and time.
4. Compliance Peace of Mind
The world of rental properties is littered with regulations, from gas safety checks to ensuring the correct insulation standards are met. Keeping up with these regulations can be a full-time job in itself. Property managers are well-versed in all existing and emerging rules, ensuring properties are always up to code, thus shielding landlords from potential legal entanglements.
5. Enhanced Tenant Interaction with Accompanied Viewings
First impressions count. Property managers can conduct professional viewings, answering potential tenants’ queries on the spot and presenting the property in the best light. Additionally, in the digital age, many property management companies offer virtual viewings, allowing potential tenants from afar to get a good sense of the property without physically being there.
6. Local Expertise and Market Knowledge
Every rental market is unique, with its own quirks, demand levels, and tenant expectations. Property management companies possess an in-depth understanding of local markets. They can advise on the right rental price, suggest modifications to make a property more attractive, and even forecast trends that landlords should be aware of. This local expertise can be invaluable in maximising occupancy rates and rental income.
7. Maintenance and Repairs
Property management companies often have established relationships with contractors, plumbers, electricians, and other service providers. This means that any maintenance or repair issues can be addressed promptly and often at a more competitive rate than if a landlord were to source services independently.
8. Financial Management and Reporting
From collecting rent to providing detailed financial reports, property management companies offer comprehensive financial services. This ensures landlords have a clear understanding of the profitability of their property and can make informed decisions about future investments or changes.
Cost of Property Management UK
Deciding on a property management service in the UK involves understanding the various fees associated with each service tier. These fees, which often serve as a reflection of the scope and quality of the services provided, can vary widely based on geographical location, the reputation of the letting agency, the property’s size and value, and more.
Moreover, as the rental market evolves, the competitive landscape among letting agents leads to a dynamic pricing model, therefore, for landlords, understanding this fee structure becomes imperative not only from a budgeting perspective but also to ensure they are receiving value for their money.
Here’s a comprehensive table to provide clarity on the potential costs associated with different property management services:
| Service | Description | Average Cost |
|---|---|---|
| Tenant-find Only | Assisting in advertising the property and securing a tenant. | One-off fee (Variable, often equivalent to a percentage of the first month’s rent) |
| Rent Collection | Handling the financials, collecting monthly rent. | Fixed fee (Variable, typically 2%-5% of monthly rent) |
| Full Management | Comprehensive service including tenant-finding, rent collection, repairs, legal compliance, etc. | 10%-20% of monthly rent |
| Set-up Fees | Initial charge for setting up tenancy (e.g., tenancy agreement, reference checks). | Variable (Often a one-time charge) |
| Renewal Fees | Charge for renewing the lease with an existing tenant. | Variable (Typically a percentage of the renewed contract’s rent) |
| Maintenance Fees | Costs for arranging repairs or maintenance. Might be a service fee or markup on contractor’s bill. | Variable |
| Early Termination Fees | Fee for ending the contract with the letting agent prematurely. | Variable |
Property management agreements in the UK
Just as a tenancy agreement maps out the relationship between a landlord and a tenant, a property management agreement outlines the bond between the landlord and the property manager.
This vital contract spells out the expectations from both the landlord and the property manager, detailing everything from agreed fees to the duration of the partnership. Beyond just the basics, it also pinpoints the legal responsibilities of each party. If you’re considering hiring a professional to oversee your rental assets, this agreement isn’t just recommended—it’s essential. While a simple handshake or verbal commitment may seem easier, remember that such informal arrangements aren’t typically backed by law, making the written agreement your primary shield.
Frequently Asked Questions
Is a property manager the same as a landlord?
No, while a landlord owns the property, a property manager acts on the landlord’s behalf to manage the property’s day-to-day operations.
Are property management companies regulated?
Yes, in the UK, they must be members of a property redress scheme and abide by specific codes of practice.
How do property managers handle maintenance requests?
They typically have a list of approved contractors they can call upon for quick and efficient service.
What happens if a tenant defaults on rent?
A property manager will typically have systems in place to chase arrears and, if necessary, start the eviction process.
Conclusion
Understanding what property management is, is essential for landlords aiming for an efficient and profitable property venture.
The expertise and services provided by property management companies, from tenant sourcing to compliance assurance, offer landlords peace of mind and ensure a smooth rental process. As the rental landscape continues to evolve, professional property management becomes an increasingly valuable asset for UK landlords.
Are you looking for an efficient property management company to take care of your rental property? Contact MMC today to see how we can help!
