Choosing A Property Management Company

11 May

Over the past few years there have been a number of entertaining television shows highlighting the earnings opportunity of renting out houses and apartments. These have encouraged many to enter the property development field for the first time.

All is often not quite as simple as it is made in the world of reality television which is why a good number of those investors realise the wisdom of turning to professional property managers. We have spoken to a number of lettings and estate agents to discover what a landlord should be looking for (and wary of) when choosing a company to look after his/her property portfolio.

A good property management company that provides superior service can quickly become one of your greatest assets. From marketing your rentals to collecting the rent itself, interviewing perspective tenants, handling maintenance and repair issues, and responding to tenant complaints – they take on all the hassles of being a landlord, while you are left to enjoy the benefits. However, before hiring a property manager, it is important to do your research to ensure you find the best fit for you.

beautiful cottage with garden
So, if you are looking for a property management company for your rental portfolio, keep the following tips in mind.

Check their qualifications

Anyone can set themselves up as a property manager so it can be tricky to know who to trust. Fortunately there are some professional bodies in the UK. A good starting point is to find a company who are accredited by The Association of Residential Lettings Agents (ARLA).

Consider the costs

In most cases, a property management company charges a flat monthly fee for their services. Determined by what services they offer, these fees may be as low as 5 percent or as high as 20 percent. According to Manj Singh lettings and property management specialist at Redstones Telford, “Be sure to question whether or not your monthly fee will be reduced if your property sits empty. Many lettings agents offer a guaranteed rent scheme at an additional cost. Although you may have to pay a slightly higher fee it does give you the peace of mind of a consistent income regardless as to the state of occupancy of your property. If you are still paying a mortgage on your property then this may be the best option, as you will not be left with a liability and no means to pay it.

Also, address what kind of reserve the company will require. Most companies insist that you put a certain amount in an account for any incidentals or repairs that may come up. This is also the time to make the company aware of how much they can spend on repairs without contacting you first. Do not hire a company that does not agree to this stipulation.

The tax liabilities related to being a landlord can change quickly, and your agent will be able to keep you on the right side of HMRC regulations.

Determine exactly what services they offer

You probably want a letting agent that does everything from advertising for new tenants to handling evictions. In addition, address how they handle emergency and routine repairs, maintenance, rent collection, etc. Make sure their philosophy is compatible with yours.

Some porperty owners enjoy a degree of involvement in their houses and flats and in these cases it is vital that the lines of who is responsible of what are clearly determined, to avoid duplication as well as important things not being done.

For those landlords who want a hands-off experience then full level management will be the best option, although this is for a higher fee.

Find out how often they mail out statements

While some property management companies only do this on a quarterly basis, it is recommended that you go with a company that sends out monthly statements which include income and a breakdown of any expenses spent during the month.

Keeping control of your expenses is vital if you are to turn a profit on the property for rent. A shower replacement, boiler repair or changing the worn out furniture can negate the margins you make.

North Easet house available for rent

Address accounting issues

In addition to finding out when the company will mail out your cheque, be sure to question how they handle tenant’s deposits too. In England they should be associated with the Deposit Protection Scheme which means that the tenant’s money is kept seperate from the funds of the letting agents.

Consider methods of communication

As in any relationship communication is vitall. Be sure that you choose a company who uses email and also responds quickly to phone calls. You want a company with a track record for responding in a timely manner. You can do this by asking to speak to current clients or looking for reviews left by past clients online.

Discuss their termination agreement

In the event that this does not work out the way you expected, you need to know upfront what it will take to terminate your agreement. For example, are there penalties or a charge for breaking your contract?

Even if the first company you speak with seems absolutely perfect, it is important to conduct interviews with at least one or two more prospects. When you are looking for a property management company, never rush into an agreement. This improves your chances of finding the company that can best meet your needs.

The video below gives an indication of the variance of areas in the city and some useful pointers as to which ones to focus on.

If you are planning to invest in property to rent then local knowledge is vital so talk to you a few agencies before deciding on who to hire.

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