Property Management in London: A Guide
Property management is an important part of a property investment strategy. Check out our handy guide for more information!
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As the nation's capital, London has a wealth of buy-to-let opportunities. There is certainly no shortage of prospective tenants with a vast demand for city living. The constant growth of the city and its infrastructure will guarantee prospective tenants for the long-term future. To capitalise on this demand and to successfully get the returns you deserve, you will need an effective property management strategy in place. As part of our pledge to keep London landlords compliant and maximising their returns, we have put together the following Property Management in London guide.
The foundation to being an effective landlord/property investor is by having attention to detail, found in the due diligence when sourcing areas to invest in.With so many ideal buy-to-let locations for a property owner in London, knowing how and where to invest in real estate is a challenge in itself.
Particularly when you should know your target investment areas inside out.
The next challenge of being a landlord/property investor in London is the letting process. The roaring demand for rental properties in London is great news for landlords who worry about void periods. It can, however, make it difficult for selecting the right prospective tenant with so many to choose from.
Then there is the challenge of property management in London. Effectively managing a property requires a great deal of time, which is our most precious commodity as human beings. If you are a full-time landlord, this will be common knowledge. If you are looking for a passive income from real estate whilst taking complete control of your time, you may need to look at alternate strategies. This can involve the assistance of a thorough property management agent.
A committed managing agent will be able to look after your property (or entire portfolio) day to day as if it were their own. As well as managing each individual aspect of the process. This gives you greater control of your time, whilst allowing your assets to earn you a passive income with little input on your part.
What is property management in London?
Property management is a crucial component in any property investment strategy. It is the main body of the process that secures your revenue and return on investment. Keeping your property maintained and your tenant in-situ with effective property management avoids costly repairs and provides your rental income.
As a London property manager, there are many regulations to stay compliant by. Doing so prevents you from being fined, summoned to court, or even facing potential time behind bars.Without an effective, thorough property manager, no long-term property investment would be successful; be this yourself or a local expert.
Why is good property management in London important?
Good property management makes all the difference. There is so much more to property management than simply maintaining your asset and collecting rent from your tenants. The more excellent the service you offer to your tenants, the more likely they will stay in your property for the long term. Keeping tenants in situ for longer minimises the time required to re-let your property and reduces void period costs. This is important to your rental income, and ultimately your return on investment.
What does good property management look like?
Good property management is typically reflected in your returns. Having happy, long-term tenants means a guaranteed income, whether you or a hands-on landlord or a passive income earner. Regardless of if the management is yourself or you outsource it to a letting agent, the key to good property management is consistency.
Having processes in place at every stage of the property management journey is crucial. Doing tasks ad-hoc breaks the cycle of consistency and can lead to issues. For example, having fixed inspection periods helps you in several ways.
Firstly, it communicates to your tenant that you are attentive to them and the property. You should negotiate flexibility with your tenant in terms of gaining access. This will give them an equal sense of control and that you aren't being intrusive. Inspections should, however, always be within a set time frame.
Secondly, this allows you to maintain a thorough condition report of your property. Some tenants are more communicative than others, which can be problematic for maintenance reporting.
By carrying out regular inspections at pre-determined intervals, you will be able to identify maintenance problems and their progress. This can be done regardless of the level of communication from the tenant. This means that should you place reserved tenants into your property, you still have control over any emerging maintenance issues and can rectify them when necessary.
The obvious signs of good property management companies are how long your tenants stay in their tenancy agreement and the condition they keep it in. Tenants who feel valued and well looked after will typically, in turn, do the same to your property. Whilst the massive demand for rental properties across the city shouldn't concern you regarding void periods, the re-let process still incurs time and costs from a referencing point of view.
What skills are required for effective property management?
The skillset required to be an outstanding property investor differs from an effective property manager.
Communication is a two-way street essential to understanding situations with your tenants and your property. A major irritant for tenants is when landlords cannot communicate with them, which makes them feel devalued. Healthy and stable tenancies are built on communication, so liaising with all parties is crucial.
Keeping organised cannot be understated in property management. Many aspects need to be kept under control, and it is beneficial to have processes and workflows in place to sustain order. Administrative tasks, maintenance logs, and communication with tenants should be organised and kept as records for future reference.
Flexibility and Patience
Property management is just as much about taking care of your tenants as it is your property. Should problems arise with your tenants, then a degree of patience, empathy, and flexibility goes a long way. Whilst you should establish boundaries with your tenants, it won't necessarily hurt to bend them should an occasion arise. There may be circumstances in their life out of their control that could affect their mental wellbeing or ability to make a payment on time. Communicating and reassurance can help to keep the situation under control and make them feel safe. You should always look to develop solutions¬†with your tenants and not against them.
Basic Maintenance Knowledge
You don't have to be a skilled plumber, gas engineer or safety inspector. However, having basic maintenance knowledge will allow you to diagnose issues before they become increasingly problematic. It will also mean you can offer your tenants advice or be able to inspect a problem yourself, rather than paying to call out a contractor straight away.
What are the key components to property management in London?
Effective property management will see you or your outsourced property manager process all the steps of the tenancy. For each managed rental property in London, this should include the following:
It's essential to get tenants set up on a system as soon as possible, you can use a specialist property management system or a spreadsheet. You should log all the contact details (including guarantors where applicable) and ensure all names are correct as per the tenancy agreements. During the referencing stage, any previous rent arrears the tenant has been in will crop up. If you are still accepting their tenancy application, these should still be noted and logged.
Introduction and communication
Regardless of how open or reserved your tenants are, an introduction can never go amiss, by yourself or an outsourced property manager. Communication is essential throughout a tenancy. An introduction should outline key information relating to the property. Such as who to contact in an emergency, and processes relating to the rent payment.
Set up the suppliers
Utility bills are a common area of confusion for tenants and particularly first-time landlords. You may be responsible for payment if the utility provider accounts are in your name, especially if the previous tenant failed to register their details. It is important to establish where this responsibility lies in the tenancy agreement.It is crucial to protect yourself from losses incurred by unpaid bills. You should always confirm which utility bills are the responsibility of the tenant.
For example, you may wish to verify that the water, electricity, gas, council tax, TV licence, broadband and landline costs are the tenant's responsibility. If you are an HMO (House of Multiple Occupation) landlord, it can be cost-effective to source these bills as bundles from utility providers. Inclusive bills are commonly a more attractive option for HMO tenants.
You should also notify the local council when a new tenant moves in and provide their name and contact details.Energy bill suppliers need meter readings from the tenancy start and end dates, so readings must always be accurately recorded. Suppose a tenant leaves your property and has debts on their utility company accounts. In that case, accurate meter readings will ensure you are only liable from the date the property became vacant.
Finally, you should encourage your new tenants to set up their utility accounts as soon as possible, as this will reduce the likelihood of inaccurate or unpaid utility bills. Once the various utility accounts are open in your tenant's name, you will no longer be responsible for payment.
Should I manage my own London property?
Managing your own property or an entire portfolio is similar to spinning plates. Many things happen at once, and one mistake can bring down the whole process. Failure to respond to a critical maintenance issue promptly can not only put your tenants at risk but the integrity of your property as well.
Property management can be a daunting task for a first-time landlord/property investor. If you are willing to put in the time and commitment required to successfully manage a property, then you should make sure you have a range of processes and guides in place to assist you. Never second guess any aspect of managing your assets and your tenants, and communicate when and where possible.
Alternatively, it is always wise to speak with well-versed experts in the field. Whether looking for advice or full management, an experienced London letting agent who can guide you through each step methodically.
If you would like any advice on property management in London or want to have a property or entire portfolio managed, speak with a member of the Oasis team. Our expertise in London property management for landlords and tenants is sure to help you and your property achieve the results you deserve.
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