Complex legislation proving too much hassle for DIY admin.
Did you know there are now more than 400 pieces of legislation and 145 laws affecting private rental property in the UK? By anyone’s standards that is a lot for a landlord to stay on top of and even seasoned property managers are beginning to hand the care of their rental investments over to agents to avoid falling foul of the law.
Most of our portfolio of managed properties is – and always has been – from private landlords with a single rental property, but we’re now being approached by landlords with small portfolios who are simply getting tired of having to constantly stay on alert and read up on the latest changes in the law to stay fully compliant.
Usually, landlords with just one or two rental properties are busy, working people and not property magnates swanning around the globe on a gin palace. They are simply doing their best to build a financial future. On the other hand, professional landlords with large portfolios will often have a full time person or team looking after their homes for them, with little or no personal involvement in the day-to-day management.
But that leaves a fairly substantial bit in the middle for landlords who either don’t have or intend to have a massive portfolio, but don’t want all their time taken up with paperwork, licenses and certificates for multiple properties on top of dealing with maintenance issues.
In the last month alone we’ve had two private landlords – each with a portfolio of three properties – come to us and hand over the management. Although this means they’ll now pay a fee, the time and visible relief they expressed is clearly more than compensation enough.
We’ve also made it easy for landlords to switch. Very often agents charge a full year of management fees upfront which can wipe out a landlord’s entire first month’s rental income, which, for private individuals, can be quite a hit when things like a mortgage, service charge, ground rent and insurance need paying. So we split the cost of each year’s management over 12 months.
Even when Simon owned a high street estate agent in Shoreditch and Broadway Market, charging people for a year of service they hadn’t yet received never sat well with him, and neither did rinsing landlords for every penny. Some of the management fees we see being charged are thoroughly eye-watering – 20% in some cases – but you’d need a portfolio of entirely troublesome homes to warrant that kind of charge. Property management should be a profitable business for everyone, not just the estate agent, so our fees are capped at 14% for Full Management and 10% for Partial Management.