Setting Up A Property Management Company
Ever wondered how to create your own property management company? Don't know where to begin? Look no further! Read on to get started.
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Renting out homes is a lifestyle choice for many landlords who choose to give up work and concentrate on a career in property management.Starting a property management company is a fast-paced and financially rewarding job. However, there are many pitfalls along the way for the unwary to avoid.
Are thinking about a future in renting homes but don't know where to start? Read on to learn more about the skills and qualifications you need to carve out a career in property management.
What Is Property Management?
Managing property is not the same as finding tenants. Letting agents and property managers are two sides of the same coin. The letting agent sources and looks after tenants, while property managers deal with the upkeep and repair of rented homes and commercial premises.
Property managers have more in common with project managers than letting agents. A typical day might involve visiting a rented property, assessing any need for maintenance and arranging for a tradesperson to attend and carry out the work.
You might also check a property to ensure the tenants are complying with the terms of their tenancy agreements. Some property managers act as letting agents, but managing both activities with separate companies is more common.
Which Skills Do I Need As A Property Manager?
Property managers need three basic skills - communication, common sense and organisation.Often, a property manager is a piggy-in-the-middle between tenants wanting home maintenance and landlords reluctant to dent their profits by carrying out repairs. You need to negotiate and communicate well in writing and face-to-face, often in stressful situations.
Common sense is crucial as tenants and landlords often fail to resolve issues as their agendas are vastly different.
Organisation skills are helpful to property managers waiting for quotes, arranging deliveries, and ensuring tradespeople attend on time and complete the work to an acceptable standard.
Property Manager Qualifications:
The good news is no formal qualifications are needed to set up a property management company.However, if you intend to follow the career path through working as a letting agent or estate agent, you will need to study and pass exams.
Career paths include studying real estate at university or gaining awards from trade body the Association of Residential Letting Agents. (ARLA). Many property managers start on the ground floor as a letting agent to gain experience in the trade while earning money while studying.
Property Management - Keeping Legal:
Although no formal qualifications are required, you are obliged to stick to some legal processes. First, the law demands that anyone in England involved in property management join a government-approved redress scheme, either run by The Property Ombudsman or The Property Redress Scheme.
Property managers must have a certain level of professional indemnity insurance to join a redress scheme.You do not have to sign up with a trade body, but choosing to do so offers some advantages. These may include refresher training, keeping up with changes in the sector and networking.
The two trade bodies are:
Another source of helpful news and information is the magazine Property Week.
Setting Up A Property Management Business
You may know your stuff as a property manager, but that's only half of what you need to run a business.As a self-employed property manager, you need to set up a company, source professional indemnity insurance and manage your finances. Not to mention the 101 other tasks you need to master to run a successful company.
The first steps are setting up your company and registering your business with HM Revenue & Customs (HMRC).
Choosing Your Property Niche
Property is a crowded market, and you'll find plenty of competitors only too willing to barge you out of the way with cheaper fees when you open your business.You need to decide where you pitch your business. For example, are you a general property manager or a niche specialist looking after HMOs - a house in multiple occupation - or holiday lets? If not, there are plenty of other sectors, like buy to let, commercial premises or blocks of flats.
Some property managers opt for a more exotic business looking after second homes abroad.
Whatever niche you choose, the essential points to consider are:
- Distance from your work base, whether it's an office or home as travel costs time and money
- Do you have an opportunity to team with letting or estate agents? Do they already have a portfolio of properties to manage?
- Does your target area have enough properties to manage to give you a lucrative business?
Cut Costs With A Home Office
The COVID-19 lockdown has proved that many businesses no longer need expensive offices. These days all you need is an internet connection, a mobile phone and a laptop computer to create a virtual workspace rather than pay rent for an office.
Property managers tend to meet clients at their premises. So, if you have the room and a quiet zone, try working remotely until your property management business expands. If you do set up a remote property management business, check your home insurance covers business use of your technology and workspace.
How much do property managers earn?
The burning question is if your property management company can earn enough to pay the bills?Most property managers charge clients a monthly retainer regardless of their work. They also top-up the amount for the extra time spent sorting out any issues. Some property managers offer basic and premium services like 24/7 call-outs in addition to the retainer.
Your business plan should cover how much you need to spend on start-up costs and ongoing administration. In addition, the plan should show
- How much chargeable work you need to do to break even
- What profits to expect.
Get in Touch
At Oasis Living, we can offer a competitively priced property management service that improves on the outdated process of a traditional agency. We use tech and automation to speed up the letting and management process, making it more transparent in the process.
Whether you are a buy-to-let landlord or looking for someone to help with your Build-To-Rent project, we have a team of experts waiting to help you achieve success!If you are interested in upping your property management game or need someone to help you with your growing portfolio, contact one of our property letting experts today.
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