Metro - 28 April 2015
By Jo Eccles
Q: I want to rent out my property, should I pay for professional property management?
A: When renting out your property you can either manage the property yourself, or pay a professional to manage it for you.
Some landlords choose to manage their properties themselves as it means they don’t pay management fees, which are typically 6% of the annual rent plus VAT. These are on top of letting agent fees which are charged by the agent for actually finding a tenant.
If you choose to pay for a professional management service and it’s good (some property management services are much better than others), you can expect quite a lot for your fees. Firstly, you need to decide who to appoint. This can either be an estate agent, usually the agent who finds your tenant for you, or you can opt for an independent property management company whose service will typically start before you even put your property on the market. This means that they will advise you on the most appropriate letting agents for your property, they’ll organise valuations for you, and help you decide which agent or number of agents to appoint. They may even be able to help you negotiate down the letting agents’ fees, plus they’ll help you negotiate any rental offers received.
Once a tenant moves in, property management involves dealing with a range of issues from questions from the tenant about how appliances work, to arranging repairs of items in the property which stop working. A good property manager will have an excellent black book of tradesmen who will prioritise their landlords’ jobs and sometimes carry them out for a reduced fee.
Property management can also deal with more tricky situations such as tenants refusing to pay rent or being a nuisance within the building; their knowledge of tenancy law and years of experience is invaluable. Approximately half of our clients who use our property management service are those who have had really negative experiences when managing the property themselves. For example, one of our landlords had a tenant who failed to report a mouse problem and, instead, racked up £6,000 worth of pest control fees and refused to pay rent accordingly. Another had a managing agent who failed to fix a leak when it was reported, only for it to get worse and the ceiling cave in.