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With ‘generation rent’ growing in number by the week, starting a property management company could be a rewarding and fast-paced career choice. Think it could be your calling, but aren’t sure where to start? We’ve put together a guide to help.
You’re probably wondering what exactly you’d be doing as a property management agent, what skills and qualifications you might need, what costs to budget for, and what legal requirements you’ll face.
As it’s one of the fastest growing trades in recent years, you’re probably not the only one wondering how to set up a property management company right now. Let’s take a look at what you need to know.
You’ll be responsible for handling the upkeep and repairs of rented properties. There’s a lot of variety here, ranging from routine maintenance to cosmetic niggles to urgent issues that need dealing with ASAP. A broken fridge, a loose carpet that’s a trip hazard, mouldy bathroom grouting – you’re the one who makes the problem go away.
You’ll assess what needs doing and when and arrange for a tradesperson to carry out the work. Then you’ll ensure the work gets carried out within a reasonable timeframe, to a reasonable quality, and to a budget, keeping all parties informed throughout.
You might also visit tenants while they’re at the property to check that they’re looking after it in line with their tenancy agreement.
Some property management companies act as a letting agent too, meaning you take on finding and assessing tenants and drawing up tenancy contracts. As you can guess, this quickly becomes a lot more complicated (and expensive) on both sides of the table.
You’ll spend most of your day dealing with people, so a love of finding solutions and a knack for verbal and written communication are essential. The dynamic can be challenging, as you might find yourself with unhappy renters on one side and a landlord who's reluctant to spend money on the other side.
You’ll also need to enjoy the unpredictable nature of the work. You never know what’s round the corner – one day might be completely silent, the next day you might be firefighting on five issues raised by tenants in a panic. So you’ll need to be comfortable with uncertainty, flexible by nature and good at juggling priorities.
And you’ll often have a lot of plates in the air. Waiting for quotes from tradespeople, chasing up repairs, keeping track of progress, and communicating with everyone who needs to know what’s going on. If you love keeping lists and making plans and have enjoyed managing projects in the past, property management could be the perfect professional path for you.
Some property managers have a university degree in real estate. It’s by no means a requirement though. In fact, you’re not legally obliged to complete any formal training to set up a property management company.
But you will want to make sure you’re prepared for the challenge ahead. There are lots of elements that depend on you having industry expertise, from legal to financial to health and safety.
If you have the time and the opportunity, a great way to learn the ropes and get up to speed as a property management agent is to work as an admin assistant for a lettings agency. They often recruit for temps for short-term cover, so it’s worth asking around locally.
At the very least you’ll want to do some reading and keep up to date with industry press. A good all-rounder is Property Week.
Absolutely. There are hundreds to choose from, including lightweight online-only courses for less than £50 to in-depth, in-person courses spanning several weeks. If you search the internet for “property management training”, you’ll find lots of options available.
As a first step, you might want to see if any courses are available that focus on the local area or niche where you’re planning to do business. Training from experts in your target market is more likely to include tailored advice that you can put into practice yourself.
Or a safe bet is to do a course with an accredited body, such as the Association of Residential Letting Agents (ARLA). Here’s ARLA’s list of property management training and qualifications.
FutureLearn has a free property management course in partnership with the University of Reading and Reading Real Estate Foundation.
There’s a huge range of rental properties that need to be managed – from low end to high end, from cities to coastal retreats.
Different landlords and tenants have very different needs when it comes to property management, so there are lots of factors to consider here, and you’ll want to pursue a niche that interests you.
Once you’ve landed on a niche that interests you, it’s essential to check that there’s enough demand for a new company in this area. Research your competitors – how do they work, what do they charge? And research your potential clients too – do they already use a property management company? Are they happy with the service or open to change?
To give yourself the best shot at success, you’ll want to pick a particular focus and optimise your business offering to meet the needs of those clients and tenants square in the middle.
In theory it’s possible for a property management company to go fully remote these days. All you need is a computer, a phone, and an internet connection. You’ll also need unshakable confidence in your ability to keep on top of processes and people from afar – that’s why most property managers prefer to have the ability to visit the rental properties they’re in charge of in person.
And if you’re also going to act as the lettings agent, traditionally you’d have wanted a physical branch on a street in the area you’ve decided to focus on, although there’s been an increase in online-only lettings agents in the UK over the past decade.
Tempted to go down this route? Check out our guide to setting up an estate agency.
Anyone who’s engaged in property management work is required by law to belong to a government-approved redress scheme.
“Redress” is just another way of saying “putting things right”. Redress schemes exist to resolve complaints between leaseholders and freeholders who are unhappy with the service they’ve received from a property manager.
There are two independent bodies that offer redress schemes:
To qualify for a property redress scheme, you’ll need to have professional indemnity insurance in place.
That’s the most important thing to be aware of. At the moment there’s no overarching legal regulation of private sector property management in the UK, unlike in the public sector.
You’re not legally required to belong to a trade association either, but some property managing agents choose to join one anyway. It helps keep you up to date on best practice and gives your clients confidence that you will do a good job for them and for their tenants. Two to look into are the United Kingdom Apartment Association (UKAA) and the Association of Residential Managing Agents (ARMA).
Done well, property management can be a lucrative calling. Most property management companies in the UK charge both an upfront fee and a monthly fee, as well as optional add-ons and a higher tier for premium service (such as offering a 24/7/365 phone line).
Remember though, with lots of moving parts, it’s a type of business that hinges on both your soft skills and your ability to pitch and price your services for your target market.
If you’re focusing on property management only (and you can get by without a physical presence on the high street), the startup costs are low.
Here are some of the main costs to think about:
Property management companies in the UK private sector are required to join a redress scheme, and you can’t join a redress scheme unless you have professional indemnity insurance. Professional indemnity insurance covers you against claims due to bad advice and professional mistakes.
You can include other things in your business insurance policy too, from personal accident insurance to public liability insurance. There are lots of covers available to give you peace of mind that you’re protected against the unexpected, whichever form it takes.
We can help you explore your options and get a quote for property management insurance in just a few minutes.
To make your job easier, you might want to invest in property management software. There’s a whole host of options out there depending on what you need.
Accounting and storing property details and tenancy documents are just a few of the features you can expect from this type of software.
This is particularly useful for managing a large portfolio of clients and properties.
Here are a few options, but Google is your friend when it comes to research:
We’ve put together several other guides with tips on starting a new business:
Do you have an unanswered question about setting up a property management company? Ask us in the comments below.
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