Whether you already own property in London or are considering investing in buy-to-let property in the capital, there are many reasons to consider working with a property management company. Property management is an ideal service for landlords who would struggle to find the time to manage their property on their own, landlords who have a large portfolio of properties or landlords that do not live close by to their rental properties. With a property management company, all you need to do is pay a percentage of the rental income that you collect each month from your tenants to the company who will manage and look after your property for you.
Property management companies offer a wide range of services including marketing properties for rent, finding ideal tenants, collecting rent payments, and dealing with property maintenance and repairs. Read on to find out more about the main pros and cons of working with a London property management company.
Pros of Using Property Management Companies in London UK
Whether you are investing in a residential or commercial property, there are various reasons to consider working with a property management company. For around 10-15% of the rent that you collect from your tenants each month, landlords can benefit from working with a property management company in a range of different ways including:
· Marketing the Property
In a competitive market, marketing a property for rent is not always an easy ride. A good property management company will be able to help you market your property for rent in the best possible way, including showcasing it on various property sites and apps and social media sites to encourage interest from potential tenants.
· Setting Rental Prices
The property management company will be able to help you ensure that you are charging the most competitive rental prices for your property. They can do this by performing an inspection of the interior and exterior of the home along with looking at the general area to see what similar properties are being rented out for.
· Finding Good Tenants
A good tenant that you can trust to look after the property and pay their rent on time is a must for any landlord. One of the main benefits of working with a property management company is that they will be able to perform a range of tenant checks before finalising the move-in process, giving you peace of mind when it comes to who is living in your investment property.
· Dealing with Rent Problems
From time to time, landlords may face problems with their tenants when it comes to collecting rent payments. Tenants who repeatedly pay their rent late, for example, can be a source of stress. Even worse, tenants missing rent payments can cause a range of problems for the landlord. A property management company can deal with these issues in the most appropriate way, whether that involves changing the date that rent is due to make it more convenient for the tenant to pay on time or taking steps to collect late rent payments.
· Legal Compliance
The number of legal requirements for residential and commercial landlords can be quite daunting, and working with a property management company is one of the best ways to ensure that your property meets all these requirements, particularly for new landlords who may not be familiar with all of them. A property management company will be able to ensure that the property meets standards when it comes to electrical and gas system checks, for example.
Having to evict a tenant can be a long, stressful and expensive process that most landlords will want to avoid. When the landlord is working with a property management company, they will be able to take over this process on the landlord’s behalf, including sending all the relevant documentation to tenants and working alongside law enforcement and courts wherever needed.
Pros of Working with Commercial Property Management Companies in London
If you are a landlord who has invested in or is planning to invest in commercial property, there are also several pros of working with a property management company to consider. Similar to residential property management companies, a commercial property management company can take over many of the responsibilities of a commercial landlord including collecting rent payments, ensuring that the property meets all legal requirements and maintaining the property.
What are the Cons of Working with Property Management Companies in the City of London?
While most London landlords would agree that the pros of working with a property management company far outweigh the cons, there are some disadvantages that may be worth considering if you are thinking of going down this route for your residential or commercial property in the capital. The main cons of working with a property management company for landlords include:
Unlike when you decide to self-manage a property, working with a property management company does come at a cost. For some landlords, paying a fee to a property management company may be worth it, especially if they have a busy job which would make it difficult for them to self-manage or a large property portfolio that they would be unable to manage on their own. Typically, this cost is quite reasonable, with landlords paying around 10-15% of the rental price for the service. However, if you want to save as much money as possible and maximise your return on investment, this could be a disadvantage for you.
· Loss of Control
Another disadvantage of working with a property management company to consider is the loss of control. Essentially, you are passing over full control of your property to a company that you will need to trust to decide which tenants are best suited for the property, how and when maintenance and repairs are conducted, which contractors to use and more. While this may not be an issue for some landlords who simply want to sit back and enjoy the return on their investment, others may be reluctant to give up control of the property, especially if it holds sentimental value – for example, if it was passed down to you by a relative or was your first home.
What to Consider When Looking for Property Management Companies in Central London
When you work with a property management company as a landlord, you will want to ensure that you choose a company that has more pros than cons for you with the service that they provide. Since London is a hotspot for investment property with an increasing number of people looking to live and work in the capital and surrounding areas, there are various property management services to choose from. It is always worth taking the time to research different property management companies to ensure that you are working with one that is the right fit for you.
Getting recommendations is a good first place to start when looking for the right property management company. You can speak to both landlords and tenants in London to find out more about the property management companies that they have had dealings with, and whether or not they would recommend them.
Once you have a list of potential property management companies that may be suitable for you to work with, it’s a good idea to consider how much they charge. While 10-15% of the rent is an average cost for most property management companies, this can differ. It’s also worth finding out more about how the fees are collected and the process for paying the fees if the rent is not paid, for example. You should also find out more about how the fee structure works if your property is empty.
Working with a property management company that has a lot of experience will provide you with peace of mind as a landlord. It’s a good idea to ask about how many properties the company has managed and how many they are currently managing. If you are considering investing in a certain type of property such as an apartment, listed building or a commercial property, it’s worth finding out how much experience the company has when it comes to managing that specific property type.
Finally, make sure that you are clear on what will be expected of you as a landlord when working with a property management company. Many property management companies will include most responsibilities in the service agreement, although you may be expected to step in when it comes to certain situations such as larger or more detailed repairs to the property. Make sure that you are fully aware of your role before you sign any agreements.
Whether you’ve already invested in London property or are considering doing so in the future, working with a property management company can ensure that everything runs smoothly. While there is a cost involved and some landlords may be reluctant to give up control of the property to another, the pros will outweigh the cons since a property management company can take charge of various responsibilities to lighten your workload.