The Overseas Investor’s Complete Guide to Property Management

There are a variety of important services that a property manager undertakes in a property rental business  Let’s look at each of these activities in turn:

Property Maintenance and Repairs

Rental properties need regular maintenance and repair work to ensure good quality of living for the tenants and to maintain your property in great condition at all times. It’s the job of a property management to organize any maintenance work needed by contacting the appropriate trades people, and ensuring work goes smoothly and according to standard, to perform frequent property inspections, and to keep tenants correctly informed along these procedures. Research quoted by the British Landlords Association suggests you should save 1% of your property’s value for maintenance costs, which is an average cost of £2,344 across the country – much higher in expensive areas like London, a value that you can save by leaving maintenance in the hands of property management professionals, who usually have good deals arrange with their tradespeople.  The exception is new build properties that typically come with 10-year NHBC warranty, not only are repair/maintenance greatly reduced, any work required is taken cared of swiftly. 

Rent collection

It’s part of the property manager’s role to ensure the rent is fully collected on time, or chase for late payments if needed.

Tenancy Deposits collection

Tenancy deposits are also part of the property manager’s responsibility when it comes to ensuring to charge the right amount from the tenants: 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. The deposits must also be lodged with a tenancy deposit protection scheme in the 30-days after receipt.

Finding and retaining Good Tenants

Finding adequate tenants it’s very significant in property management as it translates into fewer issues in your property, a stable rental income, and fewer void periods. A property manager’s tasks to ensure good tenancy include: 

• Advertising and Marketing – The property manager’s role starts by advertising your rental property to the correct target market. 
• Tenant Viewing – A property manager will also be in charge of showing your property to potential tenants and help them with any related doubts or concerns. 
• Tenant Referencing and Financial Check – To analyze whether someone is the right fit for the rental property, a property manager should perform research regarding information such as references from previous landlords, proof of income, affordability checks, a soft credit check or request a rental guarantor in case of need.
• Perform Right to Rent Checks – This means a property manager will use digital systems to check a potential tenant’s residential status if they are a biometric card holder.
• Tenancy Agreement – 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.
• Communicating With the Tenants – A property manager is the person who tenants will contact in case of emergencies or any issues, and who will also report back to them regarding repairs, maintenance, or anything needed. 

Condition and Property inspection

A property management professional will carefully analyze your Real Estate asset on when it comes to potential profit and expenses, having in account the surrounding area it’s in or performing inspections to prevent future issues, ensuring the property is in the right condition to attract the correct tenancy. 

Tenant Renewal or Evictions

One of the functions of a property manager is to help a tenant renew their contract if they want to extend rent after the end of their fixed term, and to ensure any eviction processes are handled in a compliant way, by giving the correct notice. 

Accounting and financial reporting

One of the key benefits of hiring a property management company is their ability to handle the financial side of property ownership. For property investors, it’s essential to maximise returns, and proper financial management is at the heart of that.

• Tracking Income and Expenses:  Property managers take charge of recording all income generated by the property (such as rent) and any associated expenses. This ensures that owners are always aware of their financial position.

• Maintaining Accurate Records:  Keeping detailed and accurate records is another critical role of property managers. From tax reporting to audits, precise financial records help property owners stay organised and avoid potential issues.
• Providing Financial Reports: Property management companies also provide property owners with detailed financial statements. These reports give a clear view of how the property is performing financially, making it easier for owners to make informed decisions.

By taking on the responsibility of managing finances, property managers help property owners save time and ensure that all financial aspects are handled efficiently. This professional approach can significantly boost the overall returns from property investments.

Compliance to Health & Safety

Ensuring compliance of the asset with rental properties regulations is a significant part of property management, as non-compliance might result in fines and, consequently, losses. The most important areas of compliance include:

• Gas and Electrical Safety; 
• Fire Safety;
• Minimum Energy Efficiency Standards (MEES);
• Providing Tenants with Prescribed Legal Information.

Legal compliance

Property management companies play a crucial role in navigating the legal complexities of the real estate industry. They stay up-to-date with the latest laws and regulations governing property management, ensuring compliance. Whether it’s housing laws or eviction procedures, they offer expert guidance to minimise legal risks for property owners. Additionally, property management companies can advise on safety regulations, arrange necessary checks for compliance, and coordinate any required work identified during inspections.