The best property manager could boost your property investment profit
The reason I began investing in UK property is the reason I think you should invest in property: lifestyle. A good property investment has the potential to produce the capital gain or rental income that can change your life. With every property that you add to your portfolio, you take a step closer to your dreams.
Investment guides that we produce will help you to buy in the best places to invest in property UK. Unless you invest in a Set and Forget philosophy, even the most profitable property portfolio could destroy your lifestyle ambitions. You’ll have the money to live the life you promised yourself, but not the time. You’ll become a full-time landlord, with not a spare moment to enjoy the fruits of your property investments.
In this property investment blog, I’ll tell you why I use a professional property manager to look after my buy-to-let property investments. I’ll also let you in on the seven criteria I look for when assessing how good a property manager is.
The benefits of employing a property manager
I’m an investor. The last thing I want is to be a landlord. I invest in boxes that make money. I don’t want a new full-time job of collecting tenant rent, chasing up late payers, arranging maintenance tasks, and fielding calls at all hours of the day. I get someone else to do all of this for me: my property manager.
While I must pay for the privilege of having all the day-to-day tasks of property management done for me, the benefits are more than worth it. For instance:
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- I never get woken up by a tenant telephoning to complain about a dripping tap at three in the morning.
- My property manager markets my property and does a thorough tenant check – I have shorter void periods and more reliable tenants.
- All maintenance and repairs are carried out by experienced and time-served tradespeople, and I don’t have to do any organising.
- The tenancy agreement is always spot-on.
- All property inspections and inventory checks are done on time.
- My property manager also keeps an eye on market rents for me and advises me when I should raise rents and by how much.
- If there have been any evictions to make, my property manager does so efficiently and effectively.
Doing all this when you own one investment property is time-consuming enough; but the more properties you add to your portfolio, the harder it all becomes. Having a property manager means I have the time to spend with my family, and to concentrate on making sure my next investment is as good as (or better than) my last.
Finding the best property manager
Getting the right property manager is essential to your success in property investment. The question is, how do you know you’ve got the right manager for your property? You’ll want to make sure they know their onions, as the saying goes. The cheapest option is rarely the best, and the most expensive are rarely worth the money. Here’s the list of the criteria you need to assess before signing a property management contract:
Market practices, laws, rules and regulations are constantly evolving. Some rules are the same across the whole country, and some are specific to local authorities (such as whether you have to pay council tax during void periods).
You’ll want your property manager to have experience and expertise in the area where your investment property is located, as well as more generally. You should ask about the properties on their books – questions such as:
- How many do they manage in the same area?
- What types of property are they?
- What is the average time they have a property on the market before being rented?
- What is their vacancy rate?
- What is the average length of tenancy?
Ask them about rental legislation, and make sure they know landlord and tenant rights. Make sure they explain the process of handling tenant disputes and ask to see a sample tenancy agreement.
Make sure that the property manager has the correct procedures in place to handle tenant deposits.
Finally, ask about their memberships and affiliations to professional bodies, and be certain that their employees are trained, qualified and accredited.
Many years ago, property investors used to stick to a single location. Property managers did likewise. As an investor today, you’ll want to buy in the best places to invest in UK property. It will help you to diversify your portfolio and take advantage of opportunities across the UK.
If you use local property managers, you’ll end up with having to manage multiple people, in multiple locations, with multiple property managers. Rather than this complex situation, look for a property manager that has a national spread but local presence. By doing this you should find yourself with a property manager that:
- Offers a single point of contact
- Manages several properties in a number of different locations
- Have plans for growth
Remember, you’re looking for an option that helps you maintain control of your property portfolio while enabling you to develop it.
Advertising and marketing
Find out what capability the property manager has to market your property, and what advertisement routes they use. You’ll want to see evidence that they advertise properties online, but also via local channels.
Look at their listings, and take note of descriptions and quality of photographs.
Consider how they handle viewings, and ensure that you receive feedback from each one.
Tenant discovery and vetting
A good property manager will be adept at finding tenants. They’ll be proactive when it comes to marketing your property to tenants that they already have on their books. It will reduce the time between lettings when one tenant moves on.
Ask about their tenant vetting processes, and ensure that they speak to previous landlords, employers, and run credit checks.
Competency at handling tenants
Your property manager must be good at tenant relationships, but also tough when needed. Questions you should ask about this include:
- What systems do you have in place for problem reporting?
- Do you have 24/7 emergency numbers?
- How do you monitor rent payments?
- What procedures do you have in place to ensure tenants don’t fall behind with their rents?
- How do you handle evictions?
You should also ensure that they will conduct regular property inspections and inventory checks and that you will receive a written appraisal when they do so.
Property maintenance and repairs
Ask about the local tradespeople that they work with, and how they manage any maintenance and repair needs. Maintenance should be carried out promptly, preferably within 24 hours of a complaint being made. Ask about charges, and how they are levied on you.
Using a single property manager for a growing portfolio should take the stress out of managing a property portfolio. However, you should ask how they manage your portfolio, and what systems they have in place to make suggestions about improving cash flow through the property and economic trend cycle.
With the advent of the Internet, cloud technology and mobile computing, you have every right to expect that a property manager will be able to supply real-time updates about your property investments.
Property management fees
You’ll be charged a percentage of the rental income on your buy-to-let property. It can vary widely, from around 5% to 20%. Often, the agencies for whom property management is a second business (for example, estate agencies that have bolted on lettings and property management) are among the most expensive.
Be aware that there will also be add-on fees. Inspections, tenancy renewals and marketing, may be charged separately, for instance. Always get a schedule of all charges, and take your time to work through them and understand them before signing on the dotted line.
When you’re in the process of selecting a property manager, concentrate on making sure that the one you select can help your portfolio perform to its full potential. Make sure that they have the capacity to service your properties wherever they are, and that they will be proactive in looking after your property portfolio. Ask the right questions, consider your options, and look forward to a lucrative relationship with a great property manager.
When you meet with one of our property consultants, you’ll have the opportunity to discuss all your objectives – having your properties managed properly is a key to owning a profitable and growing property portfolio. Contact one of our team today on +44 (0)207 923 6100, and position yourself for portfolio growth from tomorrow.
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