How much does property management cost?
Are you a landlord or looking to invest in property? Wondering how much property management will cost? Read on to find out.
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Many landlords manage their buy to let properties independently without any issues, but others prefer handing the job to a professional letting agent that offers property management services.
Using a letting agent for property management is convenient in lots of ways if:
- Your time is at a premium.
- You do not want to deal with your tenants directly.
- You're a new landlord unsure of how buy-to-let works.
- You are managing a property from a distance.
- You're concerned about how licensing, property law, and housing regulations affect you.
What do letting agents do?
Letting agents are buy-to-let's marmite - some landlords love them, while others loathe them.But what do they do? Letting agent services break down into three categories:
- Tenant finding - from marketing a buy to let to arranging viewings, drafting tenancy agreements and checking a new tenant in
- Collecting rents - making sure tenants pay the rent and chasing arrears
- Property management - handling repairs and maintenance, including renewing safety certificates.
Each service will come with a fee plus some extras for checking references and carrying out credit searches.
A full management package bundles the three services together often at a discount.
How much does property management cost?
How much property management costs depends on a few variables.The size and location of the home to let make a difference. A plush London home in Mayfair will attract a larger price tag than a two-bed terrace house in the North East. Letting agents usually quote their charges as a percentage of the property's monthly rent.
If you are a new landlord and see a letting agent offering a 10 per cent plus VAT deal, the price is 10 per cent of the rent plus VAT each month. Expect to pay letting agent fees of between 10 per cent and 20 per cent a month plus VAT. If you only take the tenant finding service, the one-off fee is between one and two months rent plus VAT.
Most agents face fierce competition and are willing to negotiate a discount, especially if you have several properties to put under their management.
How to choose a property manager
The essential service a letting agent or property manager offers is finding decent tenants.Most landlords are happy with a responsible tenant who pays the rent on time.
Nowadays, landlords can choose from a host of online letting agents as well as their high street rivals.Here are some things to bear in mind when picking a property manager:
- Make sure the agent is registered with ARLA (Association of Residential Letting Agents), NALS (National Approved Lettings Scheme) or UKALA (UK Association of Accredited Letting Agents)
- Confirm the agent follows Client Money Protection (CMP) rules
- Do you know anyone who can recommend the agent?
- Does the agent know your property and neighbourhood?
- Phone or visit the agent to test customer service
Choose your agent from a shortlist of two or three firms regardless of cost, as they are likely to do a better job and cost you less in the long term.
Managing your buy to let
Deciding to manage a buy to let or shared home (house in multiple occupation or HMO) independently is a key financial decision for many landlords.Assuming a tenant pays rent of £750 a month, a full property management package from an agent costs between £90 and £180 a month, including VAT.
By taking control of managing the property, the saving adds up to between £1,000 and £2,160 a year. Managing a property comes with extra work - someone has to do the admin and arrange to carry out repairs and maintenance. In addition, the job comes with legal responsibilities.
These include ensuring the house meets decent living and safety standards while complying with licensing and other regulations. If this sounds daunting, you can always hire a professional letting agent or lawyer to do a specific job.
How much does property management cost FAQ
Who pays for tenant references?
The Tenant Fees Act came into force on June 1, 2020, banning letting agents and landlords from charging renters up-front fees at the start of a tenancy.
As a result, the cost of taking up references, making credit checks and other services associated with a new tenancy fall to the landlord.
If I self-manage, who deals with emergencies?
The most common insurance claim for buy to let properties is to repair water damage from leaks. If you self-manage homes, you are on-call 24/7 for sorting out emergencies. However, some insurance companies include emergency cover in their policies.
Do I have to register as a landlord?
England does not have a national landlord register or any requirement to join one. However, Scotland has a register, while Wales has one by default as all landlords must join the RentSmart scheme by law.
Can I manage an HMO myself?
You can manage your shared house (HMO), providing you pass your local authority's fit and proper person test and follow a management code.
Using Oasis Living to manage your property
If you are looking for an alternative to an unreliable high street agent, we are here to help. We offer a 5% fee to manage your property, with a more reliable service than that of a traditional agent. Why? Because we use tech and automation to make the processes faster and more transparent. We also have an intuitive property management dashboard that helps you manage payments, compliance and more, all at a glance.
We can also help you find tenants with a service that offers property staging, andm professional photography. If you're interested in talking to one of our experts, we'd love to show you how we can improve your property letting experience.
If you think you are better off managing your property by yourself, we offer some helpful tips on how to do this in our article on how to set up a property management company.
One of our letting experts will ensure you get the most value from your property