How to Choose a Property Management Company

Table of Content

1. Understanding Property Management

1.1 What is property management?

1.2 Why is it essential?

1.3 How can the right company make a difference?

2. Choosing the Right Property Management Company

2.1 Assessing your needs vs services offered

2.2 Checking credentials and reviews

2.3 Understanding the fees and contract terms

2.4 Questions to ask before signing the agreement

Figuring out how to choose a property management company can be a daunting task, especially for a landlord who lacks the time or expertise to self-manage and is seeking to stay compliant in an ever-evolving regulatory landscape. You might be looking for your investment to become truly passive, but how can you ensure you pick the right team to manage your property? By understanding what property management entails and its importance, you can make an informed decision that benefits both you and your investment.

1. Understanding Property Management

1.1 What is property management?

Property management involves handling all the daily responsibilities of running a rental property. From routine maintenance to collecting rent, a property management company can take on tasks that might otherwise overwhelm individual landlords. Imagine managing tenant disputes, emergency maintenance, and legal compliance on your own — it’s a lot to keep up with.

Pro-tip: Outsourcing these tasks to professionals can save both time and stress. Companies like Procuro specialise in these services, ensuring you don’t have to worry about the nitty-gritty details of property management.

Key responsibilities often include:

Rent collection: Ensuring you get your rental income on time.

Maintenance: Regular inspections and preventative repairs to keep the property in good condition.

Tenant management: Handling tenant enquiries, complaints, and disputes.

Legal compliance: Keeping up with local regulations, serving the correct paperwork, tracking certificates for such as EICR and Gas Safety.

Handing over these tasks can significantly improve your quality of life, freeing you up to focus on building your portfolio and your personal life.

1.2 Why is it essential?

Property management is essential because it ensures that all the day-to-day operations of running a rental property are handled efficiently and professionally. For those who lack the expertise or the time, a property management company can protect your investment and ensure it grows over time. You want to avoid the pitfalls of self-management, such as legal troubles or unhappy tenants, which can be both costly and time-consuming.

Recent studies show that landlords who use property management services often see higher tenant satisfaction and better compliance with local laws. This leads to fewer vacancies and higher rental income over time. According to ARLA Propertymark, a significant percentage of landlords have highly benefited from professional property management, showing a clear advantage over self-management.

Benefits include:

Professional handling: Issues are resolved faster and more efficiently.

Stress reduction: You don’t have to deal with tenant complaints or maintenance emergencies.

Legal protection: Avoid fines, costly litigation and failed possession claims through expert compliance with legal standards.

Fun fact: Many managed properties have longer tenancies due to better tenant relationships and properly maintained living conditions.

1.3 How can the right company make a difference?

Choosing the right property management company can make a world of difference to your investment. A skilled company can not only maintain your property but also enhance its value over time. This means you get better returns on your investment, fewer headaches, and more satisfied tenants.

For instance, companies like Procuro offer meticulous attention to detail and a comprehensive service package. They manage everything from regular maintenance to tenant relations, so you don’t have to lift a finger. This ensures your property is always in top shape, your tenants are content, and your investment continues to yield returns.

Key benefits of a good property management company include:

Increased property value: Regular inspections and preventative maintenance between tenancies achieve a higher overall yield and boost your property’s market value.

Tenant retention: Happy tenants are more likely to stay longer, reducing turnover.

Maximised rental income: Professional management ensures timely rent collection and minimal vacancies.

Pro-tip: Ensure any company you consider has glowing reviews and robust credentials. Always ask for references and check online ratings.

Choosing the right company can transform property management from a frustrating burden into a smooth, profitable venture. It’s worthwhile to invest the time to find the right partner for your property needs.

2. Choosing the Right Property Management Company

2.1 Assessing your needs vs services offered

When choosing a property management company, the first step is to evaluate your specific needs against the services offered by potential candidates. Are you a landlord who lacks the time or expertise to self-manage? Do you find it challenging to keep up with regulatory changes? If yes, you need a company proficient in tenant management, maintenance, and regulatory compliance. List your key requirements:

Tenant screening and placement

Rent collection

Property maintenance

Regulatory and legal compliance

Financial reporting

Once you have your list, compare it with the services provided by the management firms. Ensure the company you consider can fulfil all or most of your needs. Focus on the quality of their core offerings. For instance, if you require effective tenant screening, look for a firm outsources referencing to companies that have advanced background check systems. Do they do in-house inventories? This can often be chargeable to the landlord but become a hindrance in deposit disputes because they can lack sufficient detail or be judged as biased by arbitrators.

Pro-tip: Always match the company's service list with your core necessities!

2.2 Checking credentials and reviews

Before settling on a property management company, diligently check their credentials and reviews. Look into their official certifications and affiliations with industry bodies like The Property Ombudsman and Client Money Protection. These affiliations often indicate a higher standard of service and professionalism.

Reviews offer real-world insights into the company’s performance. Use platforms like Trustpilot or Google Reviews to get an honest picture. Scrutinise both positive and negative feedback. Pay attention to recurring complaints or praises – they often signal consistent service quality or issues:

Promptness in handling repairs

Transparency in client accounting

Professionalism and communication

Reading reviews helps you make an informed decision, reducing the risk of future disappointments.

Pro-tip: Prioritise companies with consistently positive reviews and industry-recognised credentials!

2.3 Understanding the fees and contract terms

Understanding the fees and contract terms is crucial when choosing a property management company. Fees can vary widely, so it’s important to know exactly what you are paying for. Generally, companies may charge:

Management fees (typically between 5-10% of the monthly rent)

Tenant Find fees (typically 7-12% of the monthly rent)

Maintenance and repair fees (Does your company charge a fee to arrange maintenance, typically 10%-20% of the net invoice cost)

Always ask for a clear breakdown of these charges. Additionally, scrutinise the contract terms. How long is the agreement? Is there a termination clause, and under what conditions can it be activated? Hidden fees can also be a concern, so get everything in writing to avoid surprises later.

Pro-tip: Avoid companies with ambiguous fee structures or contracts loaded with hidden fees!

2.4 Questions to ask before signing the agreement

Before you sign any agreement, ensure you ask the right questions to understand the full scope of the company’s services, fees, and policies. Here’s a checklist to assist you:

How do you screen tenants? – Quality tenants are crucial for income and peace of mind.

What is your maintenance policy? – Understand their approach to upkeep and repairs.

How and when are funds disbursed?

What are your procedures for handling late payments?

Can I see a sample monthly statement?

Are there any guarantees if a tenant they placed breaks the terms of the contract?

By asking these targeted questions, you ensure there are no unpleasant surprises down the line. It’s essential to enter the agreement with a full understanding of the terms and services.

Pro-tip: Document their responses for future reference!

Choosing the right property management company doesn't have to be overly complicated. Assessing your needs, verifying credentials, understanding fees, and asking pertinent questions can lead you to the best choice for your property. For landlords who lack the time or expertise, these steps can truly make property investment passive and stress-free.

Looking for a dynamic, responsive property management solution? Consider Procuro for exceptional service that meets all your property needs. Find out more.

Frequently Asked Questions

How do I choose a property management system?

Evaluate systems based on your specific needs, such as tenant management or maintenance scheduling. Check user reviews and request demos.

What percent do most property management companies take?

Typically, property management companies charge between 8-12% of the monthly rent.

Can anyone set up a property management company?

Anyone can set up a property management company, but in the UK, proper licensing and industry certifications are recommended for credibility.

How do I find the management company of my property?

Check the who issued your most recent service charge demand or look on the information board in the entrance of your development. If unavailable, the solicitor who helped you purchase your property should be able to assist.