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Being a landlord can be difficult. Aside from having to market and manage your property every single time you need to find new tenants, you must also ensure that you can maximise your profits without breaking the law or allowing your properties to fall into disrepair.

If you do not have much experience in managing a property, you may be considering hiring a ‘property manager’. This can be expensive, with most taking between 8 and 15% of a property’s rental income depending on the extent of their services. On the other hand, a property manager can handle everything from marketing a property to booking repair and maintenance jobs, ensuring that everything stays running smoothly without the risk of void periods.

Whether or not you ‘need’ a property manager really depends on how much experience and time you can offer as a landlord. You could be a green landlord with no idea of how to keep a property up to scratch, or you could simply have such as large portfolio that you do not have enough time to look after each and every building you own.

In any case, it is always crucial that you take your time and make an informed decision. When comparing property managers and estate agents, be sure to look at what past landlords and tenants have to say about them, rather than simply focusing on their prices. A good candidate will be well worth their costs for the security they can offer your property and, more importantly, your profits!

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What does a property manager do?

A property manager’s job can vary widely depending on exactly how extensive a service you require. Just keep in mind that the more involved a manager is with the running of your property portfolio, the more they will charge!

Property managers can:

  • Act as a liaison between the tenants and owner
  • Handle anything relating to litigation
  • Organise all maintenance and repair tasks
  • Advertise the property and find tenants
  • Hire and fire employees (if the property is commercial)
  • Handle utility bills and council tax changeovers
  • Secure landlord insurance
  • Create tenancy agreements and inventory reports

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Why would I need a property manager?

Most landlords who hire a property manager do so because:

  • They are unfamiliar with laws and procedures relating to property management, particularly when it comes to annual safety checks
  • They own too many properties to manage alone
  • They do not know how to effectively market a property
  • They do not know how to find and screen tenants

In almost every case the ultimate decision is based on time and experience. However, there are a few clear advantages and disadvantages to hiring a property manager:

Pros:

  • Experienced local property managers will be up to date with the legal requirements and responsibilities for both landlords and tenants, allowing you to avoid violations and fees
  • They will usually have good connections with local tradesmen and vendors. In other words, they can find top notch Pros, hire them easily and potentially get discounts on parts and materials whenever necessary
  • Property managers can deal with tenants on your behalf, sourcing, referencing and screening candidates as well as creating tenancy agreements and inventory reports. These are all time consuming jobs which, if done poorly, can leave you with void periods and no money coming in
  • Not only can they collect rent on your behalf, they can also interpret the market and alter the amount if need be. If necessary they can also chase tenants and help to arrange legal measures if you need to take your tenants to court
  • Some offer a ‘no let no fee’ service in case of void periods
  • There are usually several packages available. For example, you could hire a ‘let only’ property manager to advertise your property, market it to tenants and conduct viewings, then manage the business yourself going forward

Cons:

  • The biggest negative is cost. Most property managers charge between 8 and 15% of a property’s monthly rental income. Some even charge extra fees on top of this
  • Giving them control of your property requires trust, so it is important to screen your candidates carefully
  • Many property managers will be handling several portfolios at once, so they may only be able to devote limited time and energy to yours

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Hiring a property manager

When looking for a property manager, it is vital that you screen your candidates carefully. Start by looking at reviews from both landlords and tenants. Keep in mind that it is usually best to keep your search local, as not only will these candidates be familiar with local property laws but they may also have a more keen understanding of exactly who is looking for property in your area.

Ask to look at different packages and examine what is included in each. After all, you may not need a manager to handle your property over the entire course of the tenancy. You should also be sure to get a breakdown of all fees, not just the ones you are paying month to month.

Finally, be sure to watch out for a ‘guaranteed rent service’. This highly useful clause can protect your income in the event that tenants fail to pay their rent, which will be particularly useful if you are paying a buy-to-let mortgage. Other candidates may offer void property cover, regular property inspections and so on.

Ultimately it is up to you to weight the costs of your property manager candidates with what you need them to provide. If you have a large portfolio it is definitely worth considering a slightly more costly agency which is highly rated and clear with its fees. If they can protect your properties and keep your tenants happy, it could well be worth giving up a higher fraction of your rental income.