Being a landlord isn’t just about collecting rent. Between finding reliable tenants, handling maintenance emergencies at inconvenient times, and keeping up with ever-changing rental legislation, it can feel like a second job. If you own multiple properties or simply don’t have the hours to spare, that’s where property management companies step in. But what exactly does a property manager do, and is the cost worth it? Let’s break it down in this guide.
Related: Why full property management is the smartest way to futureproof your rental business
What do property managers do?
Property managers act as intermediaries between landlords and tenants, taking care of the day-to-day operations of rental properties. They handle everything from tenant placement to repairs, making your job as a landlord easier.
Here’s a breakdown of what property managers typically handle:
- Tenant finding and vetting: Property managers advertise your property, conduct viewings, and screen potential tenants through credit checks, employment verification, and references. This helps avoid problematic tenants who might pay late or damage the property.
- Rent collection: Property managers chase rent payments, deal with late payers, and handle the awkward conversations you’d rather avoid. They can also escalate to legal proceedings if needed.
- Maintenance and repairs: If something breaks, tenants contact the property manager, not the landlord. They arrange for repairs, coordinate with tradespeople, and ensure work is up to safety standards. In case of emergency issues like boiler breakdowns or leaks, they handle them immediately.
- Legal compliance: The rental market is governed by strict regulations that frequently change. Property managers stay on top of legal requirements, including gas safety certificates, EPC ratings, electrical inspections, deposit protection, and licensing schemes. Failing to meet these standards could result in hefty fines.
- Inspections and reporting: Regular inspections catch issues early, whether that’s maintenance problems or breaches in the tenancy agreement. Property managers provide you with detailed reports about the property’s condition and any concerns.
- Tenancy renewals and disputes: They manage lease renewals, rent reviews, and handle disputes or complaints. If things go wrong, property managers guide you through the legal eviction process.
- Financial management: Property managers offer monthly statements showing rent collected, expenses paid, and net income. These clear records make tax filing easier.
Related: How property management can protect your rental income and reduce tenant disputes
Is a property manager the same as a landlord?
A property manager is not the same as a landlord. The landlord owns the property and remains legally responsible for it. A property manager, on the other hand, manages the property on behalf of the landlord. Essentially, you’re the business owner, and the property manager handles the operational aspects, working in your best interest.
The landlord still needs to handle matters such as obtaining buildings insurance, paying the mortgage, and deciding whether to sell or keep the property. The property manager, however, takes care of the daily operations.
Some landlords manage properties themselves to save money or maintain control, while others prefer to outsource the management of their properties, especially if they live far away, own multiple properties, or are simply too busy. Whether or not you hire a property manager depends on your situation and priorities.
How much do property managers charge?
Property management fees can vary depending on the company and level of service provided, but they typically charge a percentage of the monthly rent.
- Management fees: These fees cover the ongoing management of the property – rent collection, maintenance, inspections, tenant communication, and legal compliance.
- Tenant find fees: If you only want help finding tenants, you may pay a flat fee or a percentage of one month’s rent. Once tenants are found, you would manage the property yourself.
- Additional costs: Be aware of extra charges for services such as inventory checks, check-out reports, renewal fees, or costs for arranging repairs. Some property management companies bundle these services into their fees, while others charge separately.
Related: How to stay compliant under the new Property Portal rules
Commercial property management
Commercial property management typically requires less hands-on management than residential properties. Commercial tenants often handle their own maintenance and repairs, and leases tend to be longer-term, reducing the frequency of tenant turnover.
When shopping for property management services, get quotes from several companies and compare what’s included. Remember, the cheapest option isn’t always the best if the service quality is poor. A good property manager can save you money by ensuring your property remains occupied, your tenants are satisfied, and maintenance costs stay low.
Property management agreement
Before signing up with a property management company, you’ll enter into a contract that outlines the services the agency will provide and the fees you’ll pay.
Key elements of a property management contract include:
- Services covered: The contract should clearly list the services you’ll receive, such as tenant finding, rent collection, maintenance coordination, inspections, and dispute resolution.
- Fee structure: Make sure you understand whether the fees are fixed or percentage-based, what additional charges apply, and when payments are due.
- Contract length: Most contracts run for an initial period of 12 months and continue on a rolling basis after that. The notice period for terminating the agreement is usually one to three months.
- Responsibilities: The contract will outline what the property manager is responsible for and what remains your responsibility. Major decisions, such as rent reductions or costly repairs require your approval.
- Termination clauses: It’s important to understand how to terminate the agreement if you’re unhappy with the service. Some contracts may include exit fees for early termination.
Always read the property management agreement carefully and ask questions if anything is unclear. A good property management company will be happy to explain their terms and what you can expect.
Is property management worth it?
For many landlords, hiring a property management company eliminates the stress and time commitment of managing rental properties. They bring professional expertise, legal protection, and peace of mind without the hassle of handling late-night emergencies.
If you’d like to discuss property management, get in touch with your local Whitegates branch for a no-obligation chat.
