Whether you’re managing a property yourself or using a letting agent to look after things for you, effective property management is a foundation of any successful rental business.
In this guide, we’ll explain what property management is, explain what a property manager does and provide some great tips on being an effective property manager.
‘‘Our advice to you is to be vigilant,” says Martin & Co’s Managing Director Ellie Hall.
“Keep organised when it comes to keeping on top of maintenance demands and the ever-changing regulations, as these can get out of hand and lead to bigger complaints.
“Hiring a letting agent is a great way of avoiding fines further down the line as they will deal with legislation and ensure your letting is meeting the requirements.
“It is not easy, but with good communication, you are sure to have happy, satisfied tenants.’’
What is property management?
A property manager looks after every aspect of running and maintaining an investment property.
Property managers are usually letting agents, who take care of landlords’ properties on their behalf, while some landlords choose to take on this role themselves.
What does a property manager do?
Property managers are responsible for a many important aspects of renting out a property, including:
1. Finding and keeping good tenants
One of the most important parts of a property manager’s role is finding the right tenants.
Finding and keeping good tenants can mean fewer issues, a steady rental income and fewer costly void periods.
Property management means taking care of:
Advertising and marketing
Finding good tenants starts with advertising a rental property to the right target market.
Property managers or letting agents will market the property online and offline in the places where they expect the target tenants to be looking for their next home.
Property managers will look after tenant viewings, showing potential renters around a property and answering any questions they may have.
Tenant referencing and financial checks
Referencing tenants and performing financial checks is crucial when establishing whether a person is the right fit for a rental property.
A property manager should:
- Obtain references from previous landlords and an employer
- Request proof of income
- Perform an affordability check (rent versus income ratio)
- Perform a soft credit check
- Request a rental guarantor if required
Right to Rent checks
Under immigration law, all tenants in the UK must have a right to rent a property.
This means a property manager will use digital systems to check a potential tenant’s residential status if they are a biometric card holder.
Irish and UK passport holders can also be checked online, although a property manager is also able to carry out a physical check on tenants who don’t hold a passport.
Tenancy agreement and inventory
The tenancy agreement is the legal contract between a landlord and a tenant and lays out the obligations for both.
Part of the property management process involves issuing a legally sound tenancy agreement and ensuring it is signed by both the landlord and the tenant.
Property managers will also arrange for inventories to be carried out at the start and end of each tenancy, so the property’s start and end condition can be compared and any requests for deposit deductions made.
Communication with tenants
Keeping open communication with tenants is a vital part of property management.
Tenants should know who to contact in an emergency and who they should report maintenance issues to.
A property manager will also keep tenants updated with progress of maintenance and repair work.
2. Maintenance and repairs
All rental properties require regular maintenance and repair work to ensure they’re safe for tenants to live in.
The responsibility for property maintenance falls on the landlord or a property manager – and property managers are best placed to handle the organisation of both regular and emergency maintenance.
Dealing with tradespeople
A property manager will call in trades to undertake maintenance and liaise with them to ensure all work is completed to the required standard.
Liaising with tenants
Tenants have the right to ‘quiet enjoyment’ of a rental property, so a property manager will liaise with them and give them plenty of notice when trades need to enter their property to carry out work.
Regular property inspections are an important part of a property manager’s role, and they will ensure tenants are given the required notice.
Property inspections can highlight maintenance problems or any damage to the property and the property manager can then take steps to fix these issues.
3. Collecting rent and chasing arrears
Property managers and letting agents will usually be responsible for ensuring a tenant’s rent is paid in full and on time.
They’ll also chase late payments and provide guidance to tenants who fall into rent arrears.
4. Tenancy deposits
A property manager has several responsibilities when it comes to tenancy deposits:
Since 2019, deposits have been capped and a property manager will ensure the correct amount is requested from any new tenant.
Deposits for rent below £50,000 a year are capped at no more than five weeks’ rent, while deposits for rent that is greater than £50,000 a year should be no more than six weeks’ rent.
Holding deposits, meanwhile, are capped at no more than one week’s rent.
All tenancy deposits must be lodged with a government-backed tenancy deposit protection scheme and a property manager will ensure this is done within 30 days of receipt.
4. Compliance and health & safety
Compliance on rental properties is vast and complex, while fines for non-compliance can be crippling.
Property managers can help landlords stay compliant at all times, keeping up to date with changes to the law and ensuring new rules are implemented.
The compliance issues a property manager will help ensure are in place include:
Gas and electrical safety
Gas safety checks must be carried out every year and a valid gas safety certificate issued to all tenants.
Property managers will help ensure all smoke and Co2 alarms are in place and working at the start of each new tenancy, alongside fire-compliant furnishings if a rental property is let furnished.
Minimum Energy Efficiency Standards (MEES)
Rental properties must have a valid Energy Performance Certificate (EPC) with a rating of at least ‘E’ in order to be marketed for rent and a property manager can help ensure this is the case.
A property manager will ensure all tenants receive certain ‘prescribed’ information at the start of their tenancy, including:
- The amount they’ve paid as a deposit
- The name, address, and contact details of the deposit protection scheme
- The address of the property they’re renting
- The name, address, and contact details of their landlord
- A copy of the government’s ‘How to Rent’ guide
5. Tenancy renewals and evictions
A property manager will handle the renewal process if a tenant wishes to continue renting a property beyond the end of their fixed term.
They also ensure any eviction process is dealt with in a fully compliant way.
Section 21 notices
A property manager can issue a section 21 notice at the end of a fixed term tenancy should the landlord wish to regain possession of their property.
They’ll also ensure the correct notice period is given and the right procedures followed.
Section 8 notices
If a landlord has grounds to regain possession of their property before the end of a fixed term, a property manager can issue a section 8 notice, giving the correct notice period and following all procedures.
Tenancy renewals and periodic tenancies
A property manager can renewal a tenancy if the landlord and tenant agree to another fixed term, or a periodic tenancy that rolls over on a month-by-month basis.
How to be a good property manager
Effective property management can help keep tenants happy, reducing the potential for void periods and ensuring steady rental income.
Good property managers will:
1. Communicate well
Issues will always crop up when renting out a property and good communication is key to keeping everyone happy.
Whether it’s a maintenance issue, or a dispute over a deposit, communicating effectively is crucial to solving problems and making sure resolutions are found quickly.
2. Always be fair
Fairness is always the best approach when managing a property and everyone involved, whether a landlord or a tenant, should be treated equally.
3. Stay organised
Managing a rental property or a portfolio of properties requires a keen eye for detail and superb organisation skills.
Often property managers will find themselves dealing with several issues at once, so being able to organise themselves and those around them is key to getting things done.
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