Truth About
Property Management

Property Management is it too much work?

One of the common reasons given by people who decide not to invest in property is that they think it's "too much hassle". The thought of dealing with tenants and their pesky problems is enough to put some people off.

Quite frankly, I don't blame them.

I've been in situations where I was just about to leave for a two-week break with the family, when the tenant rings to tell me about a problem with the property. I've also received calls in the middle of the night about pesky problems like blown fuses. If these types of scenarios are not enough to tip someone over the edge, then I don't know what is.

To avoid situations like these, I suggest that you use the services of a property management company. A good property management company will ensure that your property is managed for optimal performance, while taking care of all the other matters.

Residential Property Management

As you probably know, the UK buy-to-let market has become very popular over the years. This has resulted in the creation of a number of residential property management companies that serve the needs of the busy buy to let landlord.

Setting up a property management company is not that difficult. Anyone can do it. It's a profitable business. Obviously, the more properties you have on your books, the greater your overall profit. However, managing residential property does get more complicated when you deal with leaseholders.

Certain property management companies specialise in managing blocks of flats. These companies administer and collect the rent and service charges, and they interact with tenants and prepare annual budgets.

In Scotland, blocks of flats are held under a freehold title, rather than leasehold title. This arrangement can create problems in the collection of service charges if, for example, one of the owners decides not to contribute his or her share, thereby creating a shortfall of funds for repairs to the common areas.

This is where owning a leasehold property is better in terms of management then being a freeholder.

You could manage your own residential property.

If you have the time and patience to deal with tenants and are willing to learn the statutory laws related to tenancies, then you can manage your own place and save yourself some money.

For some of my properties, I have used the landlord's "Homecare Cover" policy offered by British Gas for £26 per month. This policy covers me for the breakdown of heating, plumbing, electrical, and drainage systems. I've given the details of my Homecare Cover policy to the tenants, and I've asked them to communicate directly with British Gas regarding any breakdowns. The policy includes unlimited call-outs, including parts and labour.

Managing property becomes more complex when you have several buy-to-let properties, as you will need to keep on top of all the paperwork. One way to do this is to purchase a property rental management software package to help track your expenses and income.

Commercial Property Management

Managing commercial property is a completely different kettle of fish from managing residential property. Business tenancies are much more complicated to manage than are residential tenancies.

Therefore, you'll probably need the services of a commercial property agent. Such agents have the experience and training to deal with rent reviews, lease renewals, dilapidations, and health and safety matters.

Whichever type of property you have, a good property management company will carry out regular property inspections and provide you with quarterly inspection reports that include recommendations on how to enhance your asset for maximum returns.

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