Do you need Property Management Services?
Investing in rental property, or deciding to rent out your own property for that matter is a major life decision. Something that of course you want to be as smooth and worry-free as possible. It is the type of endeavour that without a lot of prior thought and detailed preparation, could go disastrously wrong.
On the other hand, when approached with the right level of pre-planning, attention to detail and thorough groundwork, rental property management is something that can be relatively problem-free, rewarding and ultimately extremely beneficial.
Effectively you are preparing to allow a complete stranger to come and live in, and take charge of the most valuable asset you are ever likely to own. The biggest dilemma you will have to face is whether you have the necessary knowledge, ability, plus the time and the tools to manage the process yourself. Or do you pay a chunk of money to a professional property management company to do it for you?
In many ways renting your property and finding a tenant is not the end of the process. It is the beginning. In life, every beginning also has a middle and an end. Tenants and the properties they live in require ongoing management during the tenancy and most tenancies will eventually come to an end. All of these processes have their own complexities.
And then again, perhaps there is a third way, a way to tread the middle ground, retain control over some aspects of the process and hand some over to a third party — more on that later.
In this guide we will examine these questions in more detail by looking at the arguments for and against self-managed property rental vs engaging a rental management company. We will also take a little stroll down the third way and see what the best of both worlds might look like.
Examining the Pros of Engaging the Services of a Letting Agency
At a Glance – The Potential Benefits of Using Property Management Services
If you do not live in geographic proximity to your rental property, engaging property management services nearby can be beneficial in terms of saving you the time and cost of frequent travel and visits to supervise your property.
The local knowledge that an agency has can be useful in other ways too.
- Local market knowledge
- Tried and tested property marketing strategies and tenant finder services
- Accessible property supervision
- Maintenance and repairs
- Accompanied viewings
A rental management company has the experience and knowledge to administer legal documents and paperwork on your behalf. Ensuring contracts and communications fall within the rules and regulations from day one helps avoid expensive and time consuming disputes later on.
Letting agents are up-to-date on current legislation affecting landlords
- Tenancy agreements
- Background checks
- Rent default notices
- Eviction proceedings
- End of tenancy documentation
- Adherence to current legal processes
In some cases complete property managementcan relieve you of the pressure of maintaining the financial aspects of property rental.
The best property management companies will also be in a strong position to negotiate good deals on furniture, equipment and property repairs.
- Deposit collection and Statutory Tenancy Deposit Protection Schemes
- Rental Collection
- Contractor and Supplier Negotiations
- Insurance arrangement
Letting agents are experienced in dispute resolution. They provide an impartial buffer between you and your tenant. If it becomes necessary to evict a tenant, a letting agent knows the correct legal procedure and can often streamline the processes
- Resolving conflict
- Eviction Proceedings
- Court processes
- Legal Paperwork
Examining the Cons of Engaging the Services of a Letting Agency
At a Glance – The Potential Drawbacks of Using Property Management Services
Handing Over Control of a Precious Asset
Loss of control over the tenant choice, financial issues and repairs and maintenance can be a daunting prospect. How do you find the best property management companies to suit your situation?
- Finding the best company
- Trusting a third party with your valuable asset
- Checking credentials and trust ratings
Charges for Services
A rental management company is a profit making businesses that charges you for its services. This means less of the rental money finds its way into your pocket.
Often the charging structure goes beyond a simple commission arrangement and may not be as clearly explained as people would like.
- Initial Setup fees
- Percentage commissions between 5% and 15%
- Additional Charges for administering Energy Performance Certificates, Gas Safety Certificates etc.
- Arrangement fees for repair works
When you engage the services of a property letting agency you are likely to be tied into a robust contract that in some cases can be difficult or expensive to get out of. Some even tie you into a continuation clause from one tenancy to the next
- Tight contracts
- Continuation clauses
- No account of change of circumstances
Deciding whether or not to use a property letting agency is quite a hurdle to overcome. As indicated in the tables above, there are so many aspects to be weighed up and considered. In order to provide some simplicity and clarity these issues can actually be grouped into two fundamental areas:
1. Loss of Control
Different people will look at this in different ways. Some people hesitate to hand over control of any aspect of their lives and in particular, to trust a third party with their most valuable asset. In these cases the tendency is likely to sway more towards self-management of a rental property.
Others may be of a mind that handing over the complete process to a third party is the only way to go. After all, there are many aspects of renting out a property that have the potential to pile on unacceptable levels of personal stress and anxiety if things start to go wrong. To these people, paying some fees and handing over control is a small price to pay for peace of mind and a stress-free life.
Admittedly this is a big decision to make, but it can be mitigated to an extent by careful selection of the best property management company for your individual circumstances.
Here are some tips to help you do just that:
- seek word of mouth recommendations from current landlords
- look for a long-established agency with a good track record
- prepare a shortlist of potential agencies
- research trust ratings and client feedback on sites like Trustpilot
- check presence and profiles on social media (Twitter, Facebook, LinkedIn)
- look for membership of professional bodies like the National Approved Lettings Scheme or The Association of Residential Letting Agents
- check tenant referencing processes employed by the agency
2. Financial Impacts
Nobody wants to find themselves in the position of making very little or no money from renting out their property. The simple fact is that the more you pay to a third party to handle aspects of the rental on your behalf, the less money you stand to make out of the process.
This needs to be weighed against the possibility that a letting agent may be able to achieve a higher rental price than you could. The other big factor to consider is that because a professional property management company spends all day, every day processing and vetting tenant applications, they may well be less likely to take on a difficult tenant with all of the potential costs that could spiral out of control as a result.
If you are considering the services of a property management agency, make sure they produce a complete schedule of charges actual and potential listed clearly on a single page.
With a wealth of experience, streamlined processes and well-established tenant finder and management procedures, is it possible that an agency that ticks all the boxes might actually be able to save you money?
Exploring the middle ground with Monkey vs Owl
Earlier on we touched on the possibility that there might be a third way of approaching property rentals and this is it!
The Monkey vs Owl service includes the MOVO Complete package that gives access to an online platform supported by mobile apps. Using this, landlords are able to self-manage many aspects of property rental. Alternatively, we provide a selection of traditional letting agency services that can be tailored to individual needs.
In other words you can choose which services you wish to pay for and which you would prefer to manage yourself. Think of it as a pick n mix. The end result is that you are able to cut costs in areas that you feel comfortable dealing with and use our range of optional packages to take care of the rest.
Self-manage using MOVO platform
Monkey vs Owl Property Management
Property listing and marketing
Manage viewings and appointments
Document storage and retrieval
Manage repairs and maintenance
Management of Unruly Tenants
Large property portfolio management?
End of tenancy services
To finish up
We hope this guide has helped with your decision making on how you would like to take the management of your rental property forward. At Monkey vs Owl we are always here to help and advise. Have a good look through our site where we endeavour to answer most of the questions people put to us. You can submit an enquiry via our online Enquiry Form and of course if all else fails, pick up the phone and give us a call on +44 (0) 1332 408 030.