How much does property management cost?

1. How much does property management cost?

2. 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.

3. 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.

4. 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. ● ●

5. 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.

6. 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.

7. 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.

8. 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.

9. 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 ● ● ● ●

10. 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 premium property management London 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.

11. 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.