What is property management?

Picture this. You've just invested in one, two, maybe multiple rental properties. You’re ready to start your journey as a landlord.

But how do you go about managing a property? Or managing multiple properties? It can seem like a daunting prospect. The amount of time and knowledge it takes to collect rental payments, stay on top of legislation, liaise with tenants...it can seem overwhelming.

That's where property management comes in. If you don't have the time to manage all the properties you own, it might be worth outsourcing the work with an experienced professional. It can save you time and stress as they take on the workload for you.

But how does property management work? What are the different types of property management and how can you find the right one?

We'll be covering everything you need to know in this article. Let's dive in!

What is property management?

Property management involves staying on top of the maintenance of a building, overseeing property assets, and adhering to any health and safety regulations, as well as other lettings legislation. They also act as a communication bridge between a property owner and property occupant (for example a landlord and a tenant in a rental property).

They'll help ensure both parties are happy with the property, stay on top of its day to day operations, and make sure all obligations under the rental agreement are fulfilled.

What is a property manager?

A property manager's role is to maintain the value of the property whilst generating income. Property management services are traditionally associated with long term residential, commercial and industrial properties. But since short-term lettings like Airbnb have risen in popularity, more and more owners are seeking property management.

Property managers will usually work on behalf of property owners, but they can also work with businesses with large property portfolios (like hospitality or retailers).

They're sometimes employed directly by a property owning business, but most of the time, property managers will work for a professional property management company.

How to find the right property manager

If you're trying to find a property manager, make sure to look out for a local and respected letting agency who has good experience in your property type. Make sure they're a good communicator, calm and considerate, whilst also highly organised and reputable.

Property management services

Property management services can vary depending on the size and type of property. In short, they're in charge of managing properties. But what does this mean? Most of the time, services will include:

• Reception or concierge services like security, guest entry and receiving deliveries.
• Carrying out regular property inspections to ensure everything is adhering to health and safety regulations.
• Managing tenant relations.
• Performing maintenance and repairs.
• Managing the finances of the property (this may include deposit protection, collecting rent payments and service charge collection).
• Maintaining and cleaning any communal areas and facilities like hallways, gyms, gardens, bike storage and parking.
• Managing rental and lease agreements, record keeping, advertising properties, screening tenants and tenant referencing (though often a letting agent will do that for the homeowner instead).

Additional property management services

As well as the standard property management services, some companies will offer extra, including:

Building data and insights

They can use enhanced data and monitoring of the property to get a better insight into how it operates. This can help inform a property owner's decision on how to best upgrade the property, what's the most cost effective, and what's the best type of long-term investment.

Advanced technology

For smart buildings, some property managers use advanced technology for managing property, like security, maintenance monitoring, and lighting and temperature control. Not only can this save owners and occupiers a whole lot of money, it can also provide preventative maintenance, as well as increasing the energy efficiency of the building. And everyone wants a more sustainable property!

Types of property management in the UK

There are three main property types in the UK.

Residential property

Residential property management involves overseeing (you guessed it!) residential properties like flats and apartments. Residential property managers handle the day to day goings on of any residential property, which includes:

• Handling tenant requests and complaints.
• Finding potential tenants including tenant screening.
• Collecting rent.
• Ongoing maintenance.
• Generally keeping up appearances.
• Tenant support and tenant relations.
• Understanding residential rights.

Commercial property

Commercial property managers oversee commercial real estate like stores, restaurants and offices.

Commercial property management services may differ slightly, because it might require commercial-grade maintenance or specialist cleaning services.

They'll also need more frequent attention than residential property management because they'll have varied occupations and longer leases.

Holiday homes

Holiday property management is used for those who have invested property that they plan to rent on holiday rental platforms.

It will include services like screening suitable tenants, marketing holiday homes, and planning promotions and discounts. They may also offer online viewings or offer accompanied viewings.

Holiday property managers will also need to stay in contact with guests throughout the course of their stay, as well as maintaining the property between guests.

Why should you use a property manager?

Managing properties takes time and resources, especially if you're managing large or multiple developments. Here are the benefits of outsourcing effective property management.

A professional job

A professional property manager will have the experience to deal with all obligations required of them, so homeowners don't have to - and may have more experience than you in specific areas like health and safety, property law, accounting and customer service.

Saving time

Not only that - through maintenance and upkeep, using a property management company will be able to maintain and even add value to your home, saving you valuable time.

Keep tenants happy

A property management company will act as the bridge between you and your tenants, managing all communication. They'll ensure tenants are looked after and take care of any extra services they need while they're occupying the property.

Property managers have specialist skills and knowledge in communication, so will be able to deal with guest and tenant enquiries efficiently.

Property management companies also have access to a lot of different guest communication tools like automated messaging services. Not only does this add a level of professionalism, it also saves time for the property owners.

Property maintenance solutions

One of the biggest benefits of using a property management company is that they'll often take care of ongoing maintenance and day to day repairs, so you don't have to. They'll also offer preventive measures to ensure the building is kept well.

You'll have a good rapport with your property management company which means you'll trust that they can get the job done effectively, enabling you to give your guests the best experience.

Property managers versus landlords

So what's the difference between a landlord and a property manager? A landlord is the property owner, while a property manager is hired by the landlord to oversee the property and deal with tenant affairs.

But if you self manage your properties as a landlord, that makes you a property manager as well!

How to become a property manager

If you have an interest in real estate property, you might be wondering how you can get into property management.

You'll need a real estate broker's licence to work as a successful property manager and give you credibility in your field. You can acquire a broker's licence through the local authority, real estate boards, or via ARLA (Association of Residential Letting Agents).

You'll also need really effective communication skills, as that is a key part of property management. You'll need to maintain good relationships with tenants, communicate with them well, as well as having a comprehensive understanding of lettings compliance landlords need to follow.

And of course, you'll need to be really really organised if you want a career in real estate. Undertaking regular inspections, staying on top of legislation and regulation changes, managing tenancy deposits, renewals, and disputes, the works. It's a lot to think about, and you always need to be in the know.

If property owners want to self manage their rental properties, it's important to have these skills, keep on top of maintenance issues, and stay up to date on legislation and obligations - after all, you don't want to find yourself in legal trouble.

Regulating property management companies

The UK had two main organisations to ensure the professional standards of property management companies are maintained: Royal Institution of Chartered Surveyors (RICS) and ARLA (Association of Residential Letting Agents).

RICS and ARLA both have a code of conduct for property managers and landlords in the UK, specifying best practices and how to improve the standard of the business. They also ensure property management companies comply with legislation.

Property management fees

If you're looking for a letting agent or property management company to manage your property, the fees you'll pay will depend on a number of different factors.

For example, if your property is managed by a letting agent, their fees may vary than fees by a specialist property management company.

You'll also be charged differently depending on the management agreement with your property manager. There are different fees for different levels of service.

There are usually three tiers of property management:

Tenant-find only

With a tenant-find management style, the letting agent will handle tenant screening, referencing, rent collection, and collect tenant deposits with a deposit protection scheme. They'll also draw up an inventory and a tenancy rental agreement for a one-off fixed fee.

Rent collection

With a rent collection management type, your property manager or letting agent collects the rent from your tenant and processes the payment to you. They'll also chase the tenant's rent if it's late. This service also comes with a fixed fee.

Full property management

A full property management service means your letting agent will oversee all aspects of the property, from rent collection and maintenance requests to keeping up with legislation. For those who want to own their property with a completely hands-off management style, this type of property management would be perfect.

For a full management service, the property manager will take a percentage of your monthly rent as payment (it'll usually be between 10% and 20%).

Property management agreements

So, how do property management agreements work?

They're quite similar to a tenancy agreement between a landlord and a tenant. Property management agreements are a legally binding contract that outlines what's expected from each party.

A property management agreement also outlines the fees that need to be paid by the property owners, as well as the timescales of the agreement.

You'll need to sign an agreement between you and your property management company if you want them to manage your property - otherwise you could face a lot of legal issues. It also protects your interests if you feel like they haven't fulfilled their duties.

Summary: Taking care of your property for you

Property management is a great way to outsource a lot of the work that comes with owning a rental property. There are different levels of property management for those who have differing needs, which is great for landlords who might want to get a bit more involved in their property management!

Ultimately, property management is no mean feat, and takes a lot of work. That's why property management companies are out there - to help those maximise their investment!