Most Landlords manage their property all by themselves without problems, whilst others would prefer to hand it over to a professional agent that looks after and manages properties to do the services or job for them.
In a many ways handing your properties to be managed by professionals is more convenient that having to do it yourself if:
- You do not wish to deal directly with your tenant, especially if you are a new landlord and not too sure of how let-to-buy works.
- If you live in a different area to where your property is located.
- Disturbed by how property law, licensing and housing rules work.
As a new landlord, you need to be aware of the services lettings agents provide with regards to property management.:
MANAGEMENT OF PROPERTIES:
As well as handling repairs and maintaining properties, letting agents also renew safety certificates.
RENT COLLECTIONS:
Letting agents make sure the tenants pay their rent on time and following up with tenants who have unpaid rents.
TENANT ARRANGEMENTS:
Letting agents source tenants to occupy vacant properties, they also market the buy-to-let properties, arrange viewings and draft out of tenancy agreements.
Oftentimes property management companies will offer discounts to the landlord should they sign up for all 3 services together, this service will then be called a ‘full management package bundle’. But each service normally comes with an added payment for carrying out credit searches and tenant references.
HOW MUCH DOES PROPERTY MANAGEMENT COST?
The cost of property management will vary depending on a few things. For instance an elegant, luxury three bed property in certain parts of London will come with a rather large cost in comparison with a three bedroom terrace house in the other parts of the country. A percentage of the property’s monthly fees is usually what the letting agents will identify as the agents fees.
In general landlords should be expecting to pay between 10% and 20% monthly plus VAT, so for new landlords a deal of 10% plus VAT will mean that the letting agent’s fee is 10% of the rental property plus VAT per month. Single payment fee for only finding tenants is between one and two months rent plus VAT.
For multi-landlords are at an advantage because agents often prepared to negotiate their usual costs/prices and offer discounts as they will want the landlord to put them in charge of all their properties as agent often face strong competition
On the 1st June 2019, The Tenant Fees Act came into force. The Act prohibited letting agents from charging renters an up-front fee at the beginning of their tenant. This then led to landlords having to pay for the checks such as credit checks, tenant references and other services.
The key financial decisions for a lot of landlords is deciding how to manage a property, buy-to-let property independently, for instance, the complete package for property management for an agent will cost around £90 and £180 per month plus VAT, if the tenant pays the rent of £750 per month.
As a landlord by taking control of the property management you are saving yourself between 1000 – 2160 per year, however this will require more effort and work from you for instance admin work, carrying out maintenance and repairs and keeping up to date with rules and regulations which also requires you to ensure your home is safe and in reasonable condition.
It is then left for you, as the landlord, to decide if you would rather be hands on or total hands off from the property management, as some landlords prefer their property portfolio/investment to be passive. This decision will help you consider if you want to get involved or if you want to hire a letting agent to manage your property for you.
Call on IQueue Property Solutions Ltd for all your works and advice on your property management cost or other property maintenance.