Property manager fees are a key factor when deciding to get assistance with managing your property. A good property manager can be extremely helpful to busy landlords looking to alleviate landlord workloads.
Landlords looking for a property manager should consider what services are needed. Landlords can opt for a property manager to do a subset of services, or full management of the property. The higher quantity of services needed, the higher the property managers fees.
It’s important to shop around for a property manager to ensure you get a good service for the right fee. On the expensive side, some property managers charge up to 10% of the ongoing monthly rent for finding a tenant.
Whereas on the lower end of the scale, others charge just £99 as a one off fixed fee. The exact services may not be the same, but there are major savings to be made when picking your property manager.
On average, comparing property managers can save landlords between £1,000 – £1,437 in fees. The easiest way to compare the property manager market is to enter your postcode into our fee comparison tool. Running a search is completely free.
1. HOW MUCH ARE PROPERTY MANAGEMENT FEES?
When getting a property manager, one critical factor is the price. Property manager charges vary, some determine a fixed fee while others charge a % of the rental income.
Below are some guideline property manager fees for tenant find & fully managed services.
Landlords must check terms & conditions to ensure all the services required are within the agreed price. Add on services, not included in some of the basic property manager charges, can decrease a landlords rental income significantly.
Therefore examining the services precisely on offer are essential before deciding on a property manager. In addition, property managers often have promotional offers that a landlord can use to reduce their costs.
Often if more than one property is given to the property manager or the rent is over a certain amount, discounts are available.
2. PROPERTY MANAGER COST CALCULATOR
Use our property manager cost calculator below to see how much you could be charged. To get an accurate figure on property manager costs in your area, use our property manager comparison tool
3. OTHER (SOMETIMES HIDDEN!) PROPERTY MANAGER FEES
As per above, there will be a basic level of property manager fees based on the service you pick.
In addition, there may be other fees that crop up along the way. These can be charged because the circumstances around your property may change. For instance a tenant leaves or there is damage to your property.
As a landlord, you need to be aware of these other fees as they may impact your rental profit.
PROPERTY MANAGER TENANT RENEWAL FEE
When a property manager finds you a tenant, There will be a set term in the tenancy agreement with that tenant.
Once that term ends and you want to keep the same tenant, a tenancy renewal fee could be requested. This is sometimes the case, even if it;s the same tenant.
The property manager in exchange for the fee, will include any rental changes, amendments based on new legislation and updates to personal details
To avoid the fees, you can switch the tenant to become ‘periodic’, which means the tenant gets on a ‘rolling’ contract with no end date
How much are property manager tenancy renewal fees?
Property managers usually charge £45-£120 for renewing a tenancy agreement. Not all managers charge for this service, so again check the small print.
RESERVE FUND FEE
Property managers don’t usually want to front the bill & charge landlords after the event when issues with the property occur (they’d rather have the money first!)
Chasing landlords takes time and there can be delays. Some property managers as a result agents charge a reserve fund fee – A set aside amount of money taken in advance from the landlord to cover any damages.
How much are property manager reserve fund fees?
Usually the amount is determined by the property value.. Expect fees between the £200 – £1000 range.
PROPERTY MANAGER BILLS FEE
Property managers can manage paying bills (gas, electric, water etc) related to your property.
The manager will pay the bills, then add on a markup for their troubles
How much do property managers charge for paying the bills?
Usually they charge 1.5% – 4% of the amount billed.
PROPERTY MANAGER ADMINISTRATION FEES
These types of these come into play when you change something, like for example your bank details or personal address. The property manager to account for the additional work (updating systems etc) may charge you a fee for their work.
How much are property manager admin fees?
Anywhere between £50-£200.
EVICTING A TENANT FEES
Evictions are part of the rental world and they can get messy. Involving solicitors, bailiffs and sometimes even the courts.
The work and stress involved in an eviction process can be substantial. Therefore leaning on a property manager for their support may be suitable when processing an eviction.
How much do property managers charge for tenant eviction fees?
£120 – Eviction notice
£850 – Getting the Court Order
£250 – County Court Bailiff
EARLY EXIT FEES
If you have signed an agreement with a property manager, your agreement will stipulate for how long you need to use their services.
If you wish to cease services with the property manager early, an early exit fee is likely to be applied.
The fee amount may rise if the property is filled with a tenant the property manager has found.
How much are property manager early exit fees?
Commonly, exit fees can range around 10% of the remainder rent that is still expected within the rest of the agreement.
Inventories help document the condition of the property & its contents before & after a property manager takes control of a property/a tenant moves in.
Inventories help clear up any disputes between landlords, property managers & tenants.
Responses such as ‘it was like that when I moved in’ can be quickly validated by referring back to the inventory.
How much are inventory fees?
The cost for smaller properties is around £100. For larger properties, landlords can expect an additional £20-£40 per room.
4. PREREQUISITES BEFORE GETTING A PROPERTY MANAGER
Before getting a property manager, you need to look at the wider economics surrounding your property, for example:
1. Is your property ready to be rented?
There are a host of requirements for properties before they can be rented. These span from regulatory & safety requirements to making sure your mortgage lender approves the property being rented.
Not meeting such types of requirements can land you in a whole heap of trouble with the authorities. Our renting out your house guide will help you get your property ready to be let out.
2. Is there rental demand in your area?
If rental demand in your area is low, then renting may not be the best long term option. In cities & areas close to universities, this may not be an issue.
If rental income in your area isn’t sufficient to cover your expenses, then renting out your property may not be the best way forward. You may be on a high interest repayment mortgage for example.
In the event of the above scenarios being true, selling your property to make a profit may be an option that should be looking into.
3. What is your expected rental income?
Knowing how much rent you’re likely to get is an easy task. Simply go onto Zoopla and find similar properties in your area to see what they are being advertised for.
You can make adjustments if your property is better/worse off, but this method will give you a good estimate.
4. Can your rental income & expenses account for paying a property manager?
Finally if there is rental demand & you’re confident in making a profit, then a property manager could be a strong option.
You should get an understanding of how much a property manager would cost. Then calculate how much property manager fees will impact your financials. You can compare property manager fees in your area by running a free search on Rentround
5. WHAT DOES A PROPERTY MANAGER DO?
The duties of a property management company can fall into 5 buckets:
- Property advertising/marketing
- Finding tenants
- Collecting rent
- Property maintenance
- Renewals & evictions
Property advertising & marketing
First & foremost, the property management company must be advertise & market to potential tenants. In the UK, the most successful method to fill a landlord’s property is to have a presence on Zoopla & Right Move. Right Move is the market leader, receiving 127.5 million visits per month.
Zoopla says its websites (including Prime Location) and mobile apps attract over 50 million visits per month. A good property manager ensures pictures are taken at a high standard. This includes taking pictures at the right angle, with the right quality and of the best features within the property.
After marketing is done, the job of a property management company is to manage inquiries and ensure potential tenant questions are answered quickly. Tenants move quickly and look at multiple property options.
A property managers ability to quickly respond to questions is vital. This increases the importance of property manager opening times. If questions are coming in from tenants over the weekend when the property manager is closed, that could mean the tenant ends up elsewhere.
The property manager will then need to be adept at turning the tenant’s interest into a tenancy. This will include showcasing the property benefits and how amazing it would be to live in. Once a tenant is secured & wants to move into the property, the property manager will need to ensure all checks and prerequisites are in place.
The tenant will need to have background checks done on their credit & reference history and sometimes immigration status.
To finalise the occupancy, the property manager must handle the tenancy agreement & deposit.
A tenancy agreement is a contractual document between the tenant and property manager. The document covers exit terms, notice periods, rent amounts, payment schedules etc.
It’s important to note, that some agreements depending on the complexity of the arrangements, can be created bespoke to the tenancy. However a majority are based on a template used across multiple tenants and properties.
Once the agreement is in place, a deposit will be taken to secure the property & protect the landlord against early exits & damages. When a property management company (or landlord) is takes a deposit for a tenancy, they need to protect it in a government authorised scheme to meet legal obligations.
The DPS is one method of doing so. A deposit protection service will act as a custodian for deposits, help with disputes and assist repayments between property managers, landlords & tenants.
Rent collections are a big part of a property management companies duties. Whether the arrangement is scheduled electronic payments or a door to door cash exchange, this activity needs to be tracked properly.
Missed payments need to be followed up on, including the issuing of late payment fees. Rent collection and fees due between a landlord & a property manager can vary. Some terms stipulate that a property manager will receive X amount of the ‘rent due’.
Therefore a property manager will still be paid the same, even if the tenant skips rent for a particular month. It’s preferable for landlords to ensure the property manager is paid based on ‘rent collected’. This safeguards landlords when tenants fall into rent arrears.
A property manager has to ensure the property is safe & secure for tenants. Safety checks need to be in place, proving the property is ready for occupancy. These checks include, but are not restricted to;
- All appliances, chimneys, flues and pipework need to be in good working order
- An annual gas safety check need to be performed
- Provide an Energy Performance Certificate for new tenants
- All fittings and appliances (light switches and wiring, kettles and toasters etc) are in working order
It is prudent to keep a record of all checks for at least two years Additional facility management work includes ensuring any major property issues are fixed within good time. Broken windows, locks & doors need to be fixed. Property managers usually have a good network of contacts to fix issues quickly.
Landlords should note, that ball park costs for potential damages should be agreed beforehand to ensure both parties are happy with potential costs. Linked to property maintenance, is the property manager staying on top of documentation & legal responsibilities. In 2019 a ban on tenancy fees was implemented.
This restricted the type of fees property manages & landlords can inflict on tenants. Property managers will need to stay on top of these types of market changes and adjust their policies and operations accordingly, in addition to ensuring the property remains compliant.
Tenancy renewals & evictions
Once the fixed term of a tenant expires, the property manager should ensure the tenancy agreement is renewed. This includes updating the rent amount, term duration and additional terms.
Depending on the agreement with the landlord, a tenancy renewal may involve an additional fee. Tenant evictions may be required from time to time. This is usually due to tenants falling behind on rent or damage to the property. Evictions can be lengthy and costly, in addition to requiring significant expertise.
There’s a massive bundle of obligations a landlord must follow in order to evict a tenant. If they are not followed correctly, a landlord could find themselves on the wrong side of the law. Property managers are experienced in tenant evictions, therefore can ensure the obligations are followed correctly.
6. WHERE TO FIND A PROPERTY MANAGEMENT COMPANY?
Rent Round is the best place to find your property manager. The service is completely free for all landlords, always!
Landlords can enter their postcode and the type of services needed from a property manager, then Rent Round finds rated property managers near the landlord’s property. Landlords can quickly view property manager fees, types of services offered, ratings, number of years in the industry and the regulatory schemes the property manager abides by.
Simplifying the process even further, the landlord can then choose which property manager they want a quote from. Following which, the property manager will be in touch with further details.