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Significance of Property Management Companies

by | Oct 16, 2022

Home $ Property Management $ Significance of Property Management Companies

Introduction

No matter the size of the property or the number of tenancies, property management can be a tricky task. It takes a lot of time, dedication, and work to ensure that the property you manage is operated efficiently and effectively while still generating profits.

Additionally, you must keep up with business-as-usual maintenance, list the properties to attract potential tenants or buyers for the property you manage, and stay in touch with the tenants to ensure they are happy throughout their lease. Property management companies can help with that.

If you’re a landlord or real estate developer with numerous rental properties and ongoing projects and you want your properties to be properly managed, hiring a property management company should be your next step.

These companies employ property managers with expertise in the real estate industry and use cutting-edge technology, local market knowledge, and hands-on experience managing properties to improve day-to-day operations. Also, they know everything about tenant management and, if done properly, this could also benefit your reputation as a property owner.

Moreover, property management companies are often in charge of everything from choosing renters to property maintenance services and improvements. These businesses basically add value by bringing their expertise and knowledge and by assisting or replacing landlords in the actual management of their properties.

Of course, all of this comes with a cost that varies from 8 to 20% of the monthly rent. The fees vary depending on the services offered, the area and the prestige of the property management company.

If you are a landlord and you are willing to self-manage your portfolio we suggest you take a look at our pricing page and try Lofti’s property management software.

What are property management companies?

Companies functioning in accordance with state real estate licensing regulations that have contracts with the property owners for their property and block management operations are referred to as property management companies.

Property Management Companies deal with the process of keeping up with and managing all of the daily tasks related to real estate assets that are either available for rent or being rented.

Property management companies’ primary mission is to collect recurring fees from residents of residential properties. They also monitor the administration, management, and upkeep of the property.

It is their job to help and consult on the modernisation of the properties, increasing tenant happiness, and regulating the owners’ profits.

When we talk about property management companies, we’re talking about developers, association leasing companies, rental companies, exchange companies, and hotel or condominium operators who are financially responsible for the upkeep, repairs, bookings, and daily operations of the accommodation.

However, property management companies come with their own drawbacks. For more details, click here.

Property management company team in the office

Why Is Property Management Important?

When you play the property game, there is always a danger that you could lose, regardless of whether there is an unanticipated market downturn or increased rental affordability issue. Effective property management may be one of the finest strategies to reduce risk and succeed.

Many people believe that property management is more important than the actual property, especially for real estate investors who have a variety of properties in various regions of the UK. A good property manager is a diamond in the rough.

An inefficient property management company, though, might ruin the cash flow from your investment. You are aware of the hassles and extra expenses that can result from dealing with a tardy or unreliable property manager.

If you are not a self-managing landlord one of, if not the most, crucial facets of real estate ownership is hiring a qualified property management company that will handle all tasks related to your rentals.

Good property managers usually achieve that by getting a degree and enrolling in the relevant property management courses, whether taken online or on-campus. Or by the learning-by-doing approach, for these property managers, it is advisable to ask for references from previous and current landlords they are working with.

Property management is an essential practice for property investors and landlords:

  1. It makes it simple and easy to own a property
  2. It maintains your real estate assets
  3. It lowers maintenance and repair costs

Which services does a Property Management Company cover?

Property management companies provide a variety of services. The biggest players in the market cover most, if not all, of the following one:

  • Property management strategy
  • Reporting (occupancy, rent roll, budget, vacancy periods)
  • Development and management (maintenance, marketing, personnel, operations)
  • Market rent research
  • Marketing plans and strategies
  • Rent collection
  • Leasing discussion
  • Tenant management
  • Procedures for purchases (equipment, supplies, contracted building services, insurance coverage)
  • Contractual requirements
  • Project administration (construction, etc.)
  • Adherence to protocols (for government and administrative rules and regulations and health, fire, and safety codes)
Property manager handling keys

How Much Do Property Management Companies Charge?

Excluding the actual price of purchasing real estate assets in London, property management usually requires additional expenses.

Many landlords believe it is essential to invest some money in property management, especially in London.

In the UK capital, the market is so active and therefore the turnover of tenants is so high, that most landlords find it impossible not to have a property manager or a PMS (property management software) to help them out with their property portfolio.

For private landlords hiring no agents if they have a sizable property portfolio, they might find it difficult to maintain all of their properties especially if the portfolio is spread across different cities around the UK.

For these individuals, property management can be an appealing service. Depending on the services you require, property management companies provide different pricing packages at various pricing points.

For example, if you take care of the property documents, and rent payments and you have your own contractors to fix maintenance and repairs you will just need a tenant-finding service (typically around 8%-12% of the monthly rent) instead of a full-management service (typically around 15%-20% of the monthly rent).

Nonetheless, the majority of property management companies provide a wide range of services to their customers. Most of the time the pricing is either a flat fee or a percentage of the rent. You should pay between 15% and 20% of the rent, for a fully managed property. With full management, you can basically sit back and let the property management firm handle everything for you.

How Do You Find A Reliable Property Management Company?

Although there are many different property management companies to choose from, not all of them are professional and trustworthy.

It is essential to find a trustworthy property management company to avoid disappointing service and even potential legal concerns.

So, how do you locate a responsible property management firm to entrust your property?

  • Examine the legal records
  • Examine the tenant selection process
  • Request a comprehensive services proposal
  • Ask for reviews from current landlords
  • Fake a tenant enquiry on one of the properties they are managing
  • Set a meeting with the property manager they are going to assign you

What is PPM?

If you have questions about what is PPM, this is the right place for you.

Real estate investors are advised to manage their property portfolios through a procedure called “Planned Preventative Maintenance.”

The PPM method not only helps investors to keep track of all the properties they own, but most importantly it helps them prevent issues like missed maintenance dates and expensive “responsive maintenance”.

PPM supports property investors with their money management as well. Investors can obtain data on their earnings vs the repair cost over a period of time. This metric will help them determine whether or not to keep a property in their portfolio for more time.

property management company analysing key metrics

The Ten Best Property Management Companies in The United Kingdom

Following is the list of the ten best property management companies in the UK:

1. Prime Property Management

With its head office located in Bromley, London, Prime Property Management is known to be one of the best property management companies, especially in terms of tenant referencing and tenant management.

2. Allsop Letting And Management

Known to have very cordial letting agents, this independent real estate consultant’s goal is to prioritize its clients’ needs.

3. Vertus

The Canary Wharf Collection, an integrated real estate development, investment, and property management company, includes Vertus. It provides residents with a straightforward registration process, flexible tenancies, and special events.

4. Way of Life

Way of Life is one of the property management companies that provide the building blocks for renters to establish a home. It provides housing that is ready to move into, hassle-free tenancy management, and an internal team on hand when you need them.

Your home is seen by Way of Life as “an extension of yourself” where you relax, have fun, work, and build relationships.

5. Essential Living

One of the most well-known Build to Rent property management companies with headquarters in London is Essential Living. Its distinguishing features include high-end apartments in convenient locations. 

6. Fizzy Living

In and around Greater London, Fizzy manages eight buildings with around 1,000 rental apartments. Finding a property to rent in London should be easy. Fizzy, being the most reputed among the property management companies, makes sure it is.

7. Dandara Living

An industry leader in the UK among large-scale property management companies, Dandara Living, was established in 2016. Offering “excellent places to live in great locales” is their goal. They have more than 5,800 units spread out over the UK.

8. Legal & General

One of the UK’s top financial services property management companies, Legal & General, conducts business internationally in the US, Europe, the Middle East, and Asia. 

Legal & General has contributed more than £19 million in direct investments in housing, urban renewal, clean energy, and small business financing.

9. Get Living

Developers of properties for Build to Rent, Get Living are gaining more and more popularity. They are paving the way toward a better rental experience by providing secure leases, no fees, and fully furnished, pet-friendly houses with free WiFi. This property management company’s staff wants residents to feel at home in their new place immediately.

10. Grey star

A pioneer among the names of property management companies is Grey star. They have been Spanning the US for more than 29 years. With a variety of purpose-built rental communities, Greystar has also extended to the UK and Europe, focusing on The Netherlands, Frankfurt, Barcelona, Paris, Ireland, and Madrid.

It provides apartments of the highest calibre with upscale resident amenities.

Apart from these companies, numerous property management apps, property management software, and property management system are out there to help both letting agents and landlords be more efficient when managing property portfolios and provide an upgrade that is better than using excel at managing a property company. 

What Is The Most Successful Real Estate Company in the UK?

Online league tables for estate agents have recently surfaced, with Purplebricks at the top. In contrast, Connells has surpassed Countrywide as the most significant estate agent in the UK in terms of property listed.

However, despite slightly different numbers and not being made available online or elsewhere, other recent statistics indicate Purplebricks to be far ahead of any other single-brand agent.

For further details, click here.

Letting agent and landlord analysing revenue streams

Purplebricks Estate Agency

Who are Purple Bricks and what makes them so successful? The answer is actually pretty simple. The company doesn’t operate like the rest of the estate agents where they have physical locations in different areas. Instead, they operate online and operate on a lower fee that many physical estate agents cannot charge.

Purple bricks are a great example of a company that leverages the scale you can get on the internet to cut costs and have a fee that is very competitive. Thai combined with simple branding and a mass appeal make them the most successful in the UK.

It was established in 2012 by Michael Bruce and Kenny Bruce, and its backers include DN Capital, Neil Woodford, Paul Pindar, and Errol Damelin.

Purplebricks is a quick, easy, affordable, and convenient estate agent service and is one of the leading property management companies.

Purplebricks, the top technology-driven estate agent in the UK, gives clients a fair, transparent, and practical way to purchase, sell, or rent. Their customers adore how they put them in charge of their sales by fusing the individualized service of Local Property Experts with state-of-the-art technology and a centralized support team. 

The third league table reveals that Purplebricks is also at the top of the list of hybrid and online property management companies. By a significant margin, it was allowed to declare that it currently holds 74% of the market this month.

Purplebricks is the UK’s fastest-growing among the famous property management companies, with thousands of satisfied customers giving it a five-star rating in independent reviews.

Which Property Management Company Owns The Most Apartments in The UK?

Grainger PLC is now the UK’s biggest property management company and build-to-rent player. In Wales and England, the firm manages about 9,100 rental units. They are also building 8,850 more rental properties to add to their portfolio.

But it’s unlikely that Grainger will be the UK’s top landlord for long. The second-largest lender in the nation, Lloyds Banking Group, intends to rank among the largest property management companies in the UK. 

The massive retail banking company has a ten-year plan to buy 50,000 homes, starting with 10,000 by the end of 2025. The newly formed “Citra Living” brand will be used to rent out residences, with a focus on recently constructed, upscale properties.

Online details indicate Lloyds will create a portfolio worth £4 billion and anticipate producing pre-tax profits of about £300 million, implying a target yield of 7.5%. Lloyds (Citra Living) is not solely concentrating on build-to-rent, though.

As part of a separate objective to acquire 400 homes this year, followed by the same number in 2022, it has already purchased 45 flats in the Fletton Quays development in Peterborough.

Conclusion

In a nutshell, to manage and maintain commercial and residential properties, landlords are using property management companies or property management software.

Property management companies have to follow the landlord’s instructions while bringing an organized and expert approach to property management.

Moreover, property management companies maintain rental properties by negotiating monthly rentals, marketing and listing properties to fill empty properties and minimise vacancy periods, while maintaining and securing the properties for a cut of the monthly rent.

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