Whether it is the daily running of the property, collecting rent, or dealing with legal issues, management agents are useful for those who want less of a 'hands on' approach to property investment.
When would I use a management agent?
Most property owners will consider management agencies, dependant on their expertise in the field and the size of their property portfolios. With constant governmental changes in tenant legislation and statutory rights of landlords, if you do not have a full understanding of the sector, you could find yourself losing out. On the other hand, if you own large areas of land and a string of properties, a management agent is a logistical necessity.
An agent will be particularly useful during the negotiating and contract completion period, where professionals will be able to assist you with all the financial and legal aspects of the transaction.
What will a management agent offer?
How far a management agent will become involved in your affairs is completely up to you. If you want them to be in charge of particular tasks, you can arrange this with them, or you could give them full responsibility.
Management agents are on hand to:
Advertise the property to potential tenants and collect references from them
Set up property viewings for suitable tenants
Prepare the tenancy agreement and agree on the inventory
Manage the tenant's deposit, if it is required
Collect monthly rent and transfer it into your bank account
Regularly inspect the property and give appropriate feedback
Deal with legal issues such as non-payments, harassment, squatters and evictions, as an objective third party
Offer full information on safety regulations, and conduct health and safety assessments on the property
What should I be looking for in a management agent?
A management agency should be a member of the Association of Rental Letting Agents (ARLA). This is key as it means that all officers will comply with the Code of Practice published by the Royal Institution of Chartered Surveyors and approved under the terms of Section 87 of the Leasehold Reform, Housing and Urban Development Act 1993. The ARLA website features a list of qualified management agents.
How much will it cost me?
Most management agents will ask for a percentage of your rental income, and these fees can range anywhere between five and ten per cent for basic services, to 15 per cent for complete management.
Some property owners will decide to hunt for cheap fees, but you need to find a compromise with the agent, so they have an incentive to keep tenants happy and keep your property continually occupied.