How to Start a Property Management Company in the UK

Starting a property management company can be a great way to build a recurring-income business within the UK property market, without needing to own the properties yourself.

Property management companies look after rental properties on behalf of landlords, earning fees for services such as finding tenants, collecting rent, managing maintenance and overseeing tenancies.

But there’s more to building a successful business than simply finding a few landlords.

Here’s how to start a property management company in the UK, what you’ll need and the different routes you can take.

What does a property management company do?

A property management company takes care of some or all of the day-to-day responsibilities of managing a rental property for a landlord.

Depending on the service offered, this can include:

• Marketing properties and finding tenants
• Tenant referencing and tenancy administration
• Rent collection
• Property inspections
• Maintenance and repairs
• Tenant and landlord communication
• Check-ins, check-outs and renewals
• Supporting landlords with their compliance responsibilities

Some businesses focus solely on traditional residential lettings, while others manage HMOs, serviced accommodation or a mixture of property types.

How do property management companies make money?

Property management companies typically charge landlords for managing their properties.

For fully managed properties, this will often include an ongoing management fee, usually linked to the monthly rent. Businesses may also generate revenue from additional services provided to landlords.

The attraction of the model is its potential for recurring income.

As your managed portfolio grows from 10 properties to 50, 100 or more, you’re building a larger base of ongoing management income rather than relying entirely on one-off transactions.

How to start a property management company

If you want to start your own property management company, there are five main areas to consider.

1. Choose your business model

Decide what type of properties you want to manage and the services you’ll provide.

Will you focus on traditional residential lettings, HMOs or serviced accommodation? Will you offer tenant-find services, full management or both?

Having a clear proposition will make it easier to identify your target landlords and market your business.

2. Understand your local market

Research the rental market in the area you plan to operate.

Look at local rents, tenant demand, competitors, typical management fees and the types of landlords and rental properties in the area.

Property management is a local business, so understanding your market is essential.

3. Understand the rules and regulations

Managing rental properties comes with significant responsibilities.

Depending on where you operate and the services you provide, there are requirements around areas such as client money, redress schemes, tenancy deposits, data protection and property safety.

Requirements also differ across the UK and can change, so it’s important to understand exactly what applies to your business before you begin trading.

4. Get your systems in place

You’ll need the right processes and technology to manage properties efficiently.

That could include systems for property advertising, tenant referencing, rent collection, inspections, maintenance, client accounting and customer relationship management.

Think beyond your first few properties. The systems you put in place should be capable of supporting the business as your portfolio grows.

5. Start winning landlords

This is where the business really begins.

You need to give landlords a reason to trust you with their properties and then consistently generate new opportunities.

That could include local SEO, paid advertising, social media, networking, referrals, partnerships and direct marketing.

The goal isn’t simply to win your first property. It’s to develop a repeatable way of growing your managed portfolio.

How much does it cost to start a property management company?

There isn’t one fixed cost for starting a property management company.

It depends on your business model, technology, insurance, training, memberships, marketing and whether you operate from home or take commercial premises.

But money isn’t the only cost to consider.

Starting independently also means finding your own technology, building processes, understanding compliance, creating your brand and marketing and working out how you’re going to attract landlords.

For some people, that’s exactly what they want.

For others, a franchise offers a more supported route.

Starting independently vs a property management franchise

You don’t have to build everything from scratch.

A property management franchise allows you to operate your own business while working within an established model.

Depending on the franchise, this can give you access to:

• Training
• Property management technology
• Established processes
• Marketing support
• Industry suppliers and integrations
• Ongoing business support

Starting independently gives you complete control, but also means creating the infrastructure yourself.

A franchise comes with an upfront investment and other potential fees, but can remove some of the trial and error involved in building a property management business.

The right route depends on your experience, ambitions and how much support you want.

Looking for a property management franchise in the UK?

Sourced Living gives you the opportunity to build your own lettings and property management business with an established network behind you.

You don’t need to come from an estate agency background.

Partners receive training, technology and ongoing support to help them launch their business, win landlords and grow their managed portfolio.

You’ll also become part of the wider Sourced property ecosystem, giving you access to expertise and services across property, finance and investment.

And if your ambition is to grow faster, there can also be opportunities to acquire established lettings portfolios or agencies, subject to availability and funding criteria.

It’s your business, but you don’t have to build it alone.

Explore the Sourced Living franchise

Frequently asked questions