Being a landlord can mean that you sit back and enjoying passive income, but it can also see you need to manage the home while it’s tenanted. Months may go by, and you don’t hear a thing. Then, out of nowhere, repairs need fixing, and there are things to attend to around the property.
If you’ve got a full-time job or don’t have much spare time, managing a buy-to-let can prove tricky. That’s why many landlords employ the use of a property management company, who take on the role of maintaining your rental property.
But how do you choose a property management company if you decide to go down the route of hiring extra help? In this guide, we’re detailing everything you need to know about property management companies and how to select a good one.
What does a property management company do?
A property manager looks after your buy-to-let while it’s rented out. They arrange any repairs that need undertaking, carry out inspections and are the direct line of contact for the renters living in the home. They can also collect the rent on your behalf and manage budgets.
Property managers may also screen renters before they move in and play a role in the renter-finding side of the process. Essentially, a property manager makes your life easier by taking care of everything to do with the rental. You will only need to get involved for things like signing off repair costs.
How much does a property management company charge?
The majority of property management companies form part of a letting agency, which means there are two divisions: lettings and management – in an ideal world, letting agents take on instructions and manage them once a renter moves in.
Typically, they take a percentage of the annual rent, which can be anywhere between 10% and 15%. If, for example, you rent out your buy-to-let for £20,000 per year, a 10% cut from the property manager will amount to £2,000, which you generally pay monthly (£166 per month).
Is property management worth it?
Landlords who find themselves time-poor can benefit from using a property manager, as they won't need to concern themselves with the day-to-day running of the property. Property management may also come in handy if you don’t want to take on the role of managing your property, regardless of the time you have available.
However, if you want to maximise your rental income and don’t mind a hands-on approach, then using a property manager may not be necessary. Landlords are happy to arrange things like repairs, do inspections and take care of renter needs can enjoy that extra 10% to 15% of rental income.
What you should look for in a good property management company
If you decide to go down the route of employing a property management company, whether it’s part of a letting agent or acting independently, there are a few things you should do before hiring one.
Do your research
Have a good look online before employing a property management company. The internet acts as a great tool for research, and you can find out pretty much everything you need to know in regards to a property management company’s set up.
You will need a company who acts locally and has good knowledge of the area local contractors. Look at past reviews for the companies that interest you and draw up a list of five-or-so that you believe might be a good option.
Perhaps you know other landlords who have their properties managed? If that’s the case, tap into your network and see who uses which company and whether or not they’re happy with the service. There’s nothing quite like a word-of-mouth recommendation, so it’s worth asking friends, family and colleagues.
Get in touch
Reach out to the property management companies and ask a few questions. See how much they charge and if there’s any room for negotiation on the price (hint: there usually is) and see how they will manage your property.
Will you be assigned one specific property manager, what are their reaction times to renter requests, do they offer a dashboard where you can log in and get complete oversight of your buy-to-let or do you need to rely on monthly updates? Get as much information as possible about their set up.
Renters are arguably the most vital component, so you want them to enjoy their in-life tenancy. So make sure you ask the property management company how they deal with renters directly.
The renter needs to be just as happy with the property management service as you are. Poor service could see them grow tired with the tenancy and leave once the AST expires, leaving you with a dreaded void period.
Ensure that everyone is on the same page. That way, you will enjoy passive income, the property management company is efficient, and renters enjoy living in your property.
Property management is a handy add-on for landlords who don’t want the responsibility of managing their buy-to-let. If the price is right and the service is of a high level, you’ll provide excellent living conditions for your renter while enjoying regular rental income.