What To Look For In A Property Management Company
Key roles of a property management company and 7 checks you should do as a landlord before you hire a manager for your property.
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As a landlord, having an excellent property management company's services is essential to preserving your property's asset value. The better the property management company is, the less worry you will have to endure. But how do you choose the right one? For first-time landlords, choosing the right firm can be a more daunting task.
This blog article will help you understand the critical roles of a property management company and how you should go about choosing one to ensure that your property is in safe hands.
Property Management Company Roles & Responsibilities
It's important that you understand the roles and responsibilities of a property management company. We will dive into the details now:
When it comes to tenants, it is important that the Property management company is checking your potential tenants before they move in. Most importantly, Your tenants should have a valid permit to stay in the UK (Right to Rent Check). Secondly, they should have an income to cover the rent (and their living expenses). It is important that new potential tenants are able to provide references from previous letting agencies or landlords. This step goes a long way in avoiding tenants from hell and preserving your property asset value.
Most property management companies also help with rent collection. Ask if the company you are prospecting will guide tenants to set up a direct debt in collecting rent, or ask them to set up a standing order (direct debt is best because it comes off the tenants account automatically, but not all companies can arrange for this). If the tenant needs to be prompted each time to pay rent, chances are that rents might not always be collected on time.
Deal with Tenant Issues
A good manager deals with tenant issues promptly and on time. Make sure that the management company you choose has a track record of this. Issues can vary, some typical examples could be
- Smoking in a non-smoking household
- Noise complaints
- Untidy exterior, such as rubbish bags and trash
Some will go the extra mile and sort out minor disputes between flatmates, which is what you are looking for. A property management company that is dealing with issues promptly and effectively is especially essential for HMO property owners. If you are a hands-off kind of landlord, having a management company you can rely on to deal with your tenants is a primary requirement.
Legal and compliance requirements
A professional firm will ensure all legally required safety regulations are met and ensure that new regulations as they come by are complied with. This includes, but is by no means limited to:
- EICR (electrical) checks
- landlord gas safety inspections
- carbon monoxide
- Smoke/heat detectors assessment
When you are researching property management companies, make sure to check that they have regular tradesmen and contractors that they work with. This will give you confidence that your property is in good hands.
Lower void rates
Even the best tenants have accidents that can require someone to come and repair. It is important to ensure that the company you choose is on top of things when changing over tenants. As mentioned above, they should work with tradesmen regularly to ensure your property is in tip-top shape! If your property is maintained regularly to a good standard the better chance you have of appealing to new tenants quickly. Make sure your agent is able to repair the property quickly for new tenants to move in.
Manage Repairs & Maintenance
As mentioned above, repair efficiency is just as important during a tenancy as it is when you are between tenancies. The property management company should work closely with tenants to ensure things are fixed quickly and effectively. While this seems obvious, not all agencies have consistent relationships with tenants and some tenants can be difficult to communicate with. Make sure your property management company has a good process for identifying issues. Primarily, they should work with tradesmen and tenants to provide an effective fix.
Access to Trusted Vendors
Having a large pool of plumbers, electricians, gas engineers, locksmiths, carpenters, and all other kinds of tradespeople and suppliers of parts for various parts of the property (like plumbing, kitchen equipment, carpentry) is a great time-saver for a landlord - who can outsource all such activities to the property management company.
What to Look for When Finding a Property Management Company
1. Professional Licenses & Certifications
Professional property management companies should have the certifications and accreditations that help you understand that they have the right set of skills. The government guidelines require them to be a part of a redress scheme, here are two approved examples:
Ideally, they should also member of a professional body like The National Association of Residential Property Managers (NARPM)
2. Specialised Experience
Due to the complexity involved in property management, you should involve a firm with specific experience in your niche. For example, let's say your property is a single 5 bedroom HMO in Clapham, London. In this case, you should look for a property management company that can deal with tenant issues with 5 young professionals. Properties of this nature may have issues such as occasional loud music and complaint from neighbours. Make sure the property management company is able to deal with these types of issues effectively.
Another example could be if your property is situated block of flats. In this case, look for a property management company that can understand your relationship with the freeholder and the block management company. They should be on your side when dealing with them.
3. A Solid Reputation
A track record in property management, dealing with tenant issues, collecting and sending landlords to rent on time, and consistently managing a set of properties should stand out over a long time. Ask for references from other landlords, ask for the issues that the company faces in managing other properties in your area or similar in nature to your property - and genuinely have a conversation about how they have solved those issues - who are the key members in their team and how they ensure that things are handled fast and on time.
4. Low Void Periods
Fact-check the property management companies on their void management strategy and what they do to ensure to keep the number of days your property is not tenanted at a minimum. Voids are expensive and avoidable. A smart property manager will easily help you increase the net rent collected in the year by a few hundred pounds.
5. Services provided and fees
Look carefully at what exact services the property management company will provide you. Typical services are -
- resolving tenant issues and requests
- property wear and tear maintenance
- marketing the property
- collecting rent
- handling move-outs and evictions
To avoid future surprises, you should get a clear breakdown of all fees and fees for all add-on services, all out-call charges, and repair overhead charges. Most companies charge the overheads as a percentage of the labour costs. You should check that the management agreement you sign documents how repairs are handled and expensed and set out the expense limit you are comfortable with. Oasis Living provides a full service of property management features that you can benchmark another firm against to see what they provide vis-a-vis the fees they charge.How much your property management company takes in fees will affect your profit. Click the link for more information on deciding what to charge for your rental property.
6. Great Customer Service
When it comes to property, the unexpected always happens. Try to go for a firm that provides as round the clock support as possible, so you are not at the end of the telephone line about a neighbour complaining about noisy tenants, or you do not have to deal with property issues on your own over weekends.
7. Transparent Contracts
Given there is a list of services available, you should ensure that the property management agreement is transparent, lists all the services the firm will perform for you, clearly dated with specific start and end dates and all fees (fixed and variable) clearly documented.
More transparent letting services with Oasis Living