When you hire a property management team UK, you are agreeing to pay a specific service fee to benefit from all the expertise, assistance and oversight that company provides on your behalf.

It is common practice for companies to charge a set percentage of the rental income, ranging from five percent to fifteen percent depending on the level of services being rendered.

There may be additional one-off fees for specific services, such as repairs or maintenance, marketing a property listing to potential renters, or other issues that arise in the course of managing property. You should ask for a list of all the potential and applicable fees that might be applied to management of your property, at the outset.

What Does My Money Buy Me?

A property management company employs a team of agents and specialists.

These are the people who:

• Take care of maintenance on the property
• Create marketing strategies to attract tenants
• Screen applicants for the lease
• Handle communications with the tenants

Even routine maintenance like flushing sprinkler systems or clearing drain blockages, changing batteries in smoke detectors, changing filters in air systems, and managing pest control, can cost a great deal in time and money.

Compare those hassles to the ease of having a company handling all those details on your behalf. A property management company will already have contacts for necessary contracted maintenance jobs, and can be assured of getting the best possible rates to perform those services.

In addition to the human resources at your disposal, the property management company also has technological and marketing resources that will be put to use for you. Everything from accounting programs to online information sharing is added to your toolkit for managing your property.

When you look at the advantages of having every aspect of your property management taken care of for you, you will quickly come to the conclusion that the percentage taken out of the rental income is well worth it!

In fact, in many cases a landlord trying to go solo will spend more money trying to accomplish the same results than they would have spent in hiring a proper property manager.

Avoiding Hidden Fees

When assessing the cost effectiveness of hiring a property management team, an important component of your evaluation should be the full spectrum of fees and costs. Make sure you get a full accounting of every fee or service charge that might be assessed in the course of managing your property.

In many cases, a property management company will charge a percentage of the rental income as the fee for managing the property: this fee structure acts to the advantage of both parties. The property owner has a built-in assurance that the management agents are putting forth their best efforts on the property, because the amount of the rent benefits them as well as the owner.

There have been cases, however, where a property management company has hidden additional fees in the fine print, catching property owners by surprise when those bills come due. When you ask for a comprehensive accounting of services and charges, look in particular for items like mark ups on the bills of contractors for service and repair work.

Before you sign with a property management company

• Take a look at a comprehensive list of their fees
• Ask them to explain in detail what those fees cover (and what is excluded – and why?)

After you sign with the company, you have the right to see the contractors’ original bills when work is done on the property, so you can ensure you are being charged correctly.

Although charging mark-up fees or commissions is not illegal in itself, it is mandatory for the property management agency to be entirely transparent about their fees, especially when a client (or prospective client) asks.

Looking at the Bottom Line

If you are still on the fence about hiring a property management company, there is a very easy way to examine the bottom line. After you have requested a list of all fees that would be associated with professional management of your property, create a second list of all the expenses you would have to incur to handle the property yourself.

Don’t forget about routine maintenance as well as more serious repairs.

Think about

• Marketing your vacant property
• Taking applications from potential lease applicants
• Background screening
• Enacting lease terms, and following up with tenants who have concerns or complaints or need to pay rent.

If you need to put price tags on any of those services, do a little research to find out how much they will cost you. And last but not least, estimate how much of your own time will go into the management of the property, and put a value on that as well.

When you have the sum of the costs added up, compare that total to the cost of a property manager. Chances are, the numbers will make the decision for you!