Along with the cost of investing in property in London, property management costs can also come at a premium. However, many landlords find that investing in property management in London is worthwhile. It is an appealing service for landlords who are busy, have a large portfolio of properties that they would struggle to manage on their own, or are living in a different location to their properties. Property management companies in London tend to offer a range of services at different prices depending on the ones that you need. If you’re a landlord in London, it is worth shopping around to work out which type of property management service is the best option for you.
Fees for Property Management Companies in London
Most property management companies will offer a variety of different services to their clients. These will be priced differently depending on what is included. In the majority of cases, landlords are charged either a flat fee or a percentage of the rental price. For a fully managed service where you can just sit back and allow the property management company to take care of everything for you, you will usually expect to pay around 10-15% of the rent which is normally taken in monthly payments.
If you are looking for property management services in London, it’s important to read the service agreement carefully since many property management companies or letting agents will also charge for additional services such as handling late rent fees, drawing up inventories and more. In some cases, the property management company may ask for a percentage of the final sale price if the landlord decides to sell the property to a tenant.
Fixed Fee Property Management Services
This is the most common type of property management service that is used for properties that are vacant or otherwise do not have a fixed rental income, as it is easier for both the property management company and the property owner. One of the main benefits of choosing a fixed fee property management service is that you will be able to avoid any hidden or surprise charges and you know exactly how much you will be paying each month or year for the service. Some property management companies move to a fixed fee model when the property is empty.
Percentage of Rent Property Management Fees
A property management service that charges a certain percentage of the rental payments you collect from your tenants each month is the most popular type of property management for residential landlords of all types. It is well-suited for all types of residential properties including single family homes, apartments and HMOs. With this type of property management service, the landlord signs a property management agreement with the company giving them permission to let the property out on their behalf, collect rent payments and take over the management of the property. Typically, property management companies will charge around 10-15% of the rental price for this service.
What Do Property Management Fees Include?
Landlords are often busy people and some may have extensive property portfolios with properties in various locations, which makes it difficult for them to consider managing their own property. In this case, a property management company can step in to take over the bulk of the workload and manage many of the responsibilities of the landlord such as finding tenants, drawing up tenancy agreements, collecting rent payments, and carrying out maintenance and repairs on the property. For landlords, this gives them peace of mind that their property is in safe hands without the need to worry about dealing with issues that could arise at any time.
Buy to let landlords will often rely on a property management company to ensure that their properties are being looked after, managed well and running smoothly. A property management company can be trusted to deal with repairs and other concerns and will usually only get in touch with the landlord regarding larger problems that will need to be addressed.
Property management fees can vary depending on the services that are included in the agreement. Property management companies often offer a variety of different services ranging from simply getting the property ready and finding tenants to move in, to fully managed services where the landlord can simply forget about the property and leave the responsibilities to the property manager. Some of the main services that are provided by property management companies include:
If you are a new landlord looking to rent out a property in London for the first time, deciding how much to charge your tenants in rent payments can be tricky. A property management company will be able to conduct an assessment of the interior and exterior of the property along with looking into the local area to determine the best rental price to set. They will also be able to point out any room for improvement in the property which could potentially allow the landlord to set a higher rental price.
Marketing the Property to Tenants
Most landlords will want to get a tenant into their property as soon as possible in order to start collecting rent payments and getting a return on their investment. One of the main roles of a property management service including marketing the property to tenants. This is often done by posting photographs and a description of the property online on a range of property sites, social media platforms and more.
Interviewing and Vetting Tenants
As important as it is to make sure that your property is rented out to tenants quickly, the last thing that landlords want is to get bad tenants. A property management company will be able to meet with, interview and vet tenants to ensure that they meet the necessary criteria. For example, they will be able to ask for things such as proof of income to ensure that the tenant is able to afford the rental payments, and references from employers and past landlords.
Managing the Move in Process
Another service that property management companies can provide is managing the move-in process for the landlord. This will include collecting deposit payments and drawing up tenancy agreements for the tenant to sign. They may also be able to manage factors such as deciding on which date of the month the rental payments are due to be paid and how long the tenancy is going to last for. The property management company can also draw up an inventory of the home.
Property Maintenance and Repairs
A landlord is required to keep their rental properties well-maintained and in good repair. This can be one of the more tedious aspects of owning an investment property and many landlords are happy to leave this responsibility to a property management company. The property management company can take over responsibilities such as checking gas and electrical systems and various repairs that will need doing on the property from fixing general wear and tear to more serious issues such as repairing leaks or replacing major appliances.
Collecting Rent Payments
In most cases, the fee that landlords pay to the property management company will be collected directly from the rent. More often than not, tenants will pay their rent directly to the property management company, who will then collect the fee and send the rest of the rent money to the landlord. This can be easier for landlords since there is no need for them to set up a regular payment to the property management company. In addition, property management companies can deal with any issues with rent payments such as tenants not paying on time or missed rent payments.
While evicting a tenant is a situation that most landlords will want to avoid, sadly it sometimes will need to be done. Most of the time, tenants not paying rent for a sustained period of time is the main reason for an eviction to be carried out. For many landlords, the fact that a property management company will be able to oversee the eviction process is a major benefit of working with this type of company, since this process can be stressful and tedious. A property management company can take over the process including sending all necessary paperwork to the tenant and dealing with courts and law enforcement when necessary.
Finally, a property management company can also provide landlords with legal advice whenever they need it. If there is a legal dispute between tenants and neighbours, for example, the property management company will be able to step in and provide the landlord with advice on the best action to take. In addition, a property management company will also often be able to provide recommendations for solicitors to landlords when needed. They will also ensure that the property remains compliant with all current legal requirements including licenses and safety checks.
Although working with a property management company comes at a cost for landlords at around 10-15% of the rental price that is collected each month, many landlords find that investing in the services of a property management is worth the cost.