There are a number of reasons landlords opt to pay a property management company to look after their buy to let investment. This might include dealing with any maintenance or repair issues, or collecting rent every month (as well as chasing tenants when the rent isn’t there). Mostly, it’s because the landlord doesn’t have the time to do it themselves, they live too far away from the property (or even abroad) or they simply can’t be bothered with the hassle.
However, what isn’t fair is when the property management company you hire doesn’t pull its weight, isn’t transparent enough or simply doesn’t come across as trustworthy. If this is the case, you need to consider whether or not it’s time to pull the plug and move on to the next company. Some of the complaints we’ve heard about property companies in the past include:
● Below Market rents.The management company should be charging a higher rent, but because they’ve looked after the property for the past five years or so at the same rent, they’ve just let the account continue without any review. The upshot is you’re missing out. Big Time. And, actually, so are they in terms of percentage commission. Show them documentation on comparable properties in the same location, and insist they increase the rents or you’ll move on.
● Hidden fees. Some management companies will add extra charges onto their service i.e. these are tasks which aren’t included in their regular monthly maintenance fee, and could involve the likes of a fee for checking in new tenants, copying and issuing a gas safety certificate to tenants and even vacant room charges for HMOs. To ensure the property management service you’re thinking of signing up to doesn’t have hidden charges, ask for written documentation of everything that your monthly fee entails.
● Expensive fees. You can expect to pay anything from 10 per cent to 15 per cent of your rental income to a property management company, depending on your location. It could be a higher percentage fee, were they to offer a higher level of service. If you feel the one you have currently isn’t worth what you’re paying them, then it’s easy enough to swap to a less expensive management company.
● No inspectors. If the management company isn’t following out its promise to inspect your property, then you can either hire a freelance property inspector and ask for a reduction in your management fees, or simply move on to another management company who does carry out inspections.
● Bad tenants. A bad tenant is usually someone who doesn’t pay rent on time or comes up repeatedly with excuses and appeals to defer payment until the following month. It could also be someone who indulges in anti-social behaviour – to the annoyance of the neighbours, who end up reporting him or her to the council or police. There are ways of evicting a bad tenant, but it involves legal proceedings and can take up to three months to get to court.
The trouble with discovering you have a bad property management company is discovering you still have six months of your contract to go with them. And that’s why the best course of action is always to contact the manager and voice your complaint first. That also gives them the opportunity to rectify it. If, after a month or so, the situation hasn’t changed, then it’s time to leave. Even if you do have to pay a small penalty, it’ll no doubt work out better for your business in the long-run.
Speak to Susan De Mey who specialises in investment property.
Call 0333 123 1330