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Do you think more landlords will self manage or property management companies review their fees?

  1. More Landlords self manager

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  2. Property Management companies reduce fees

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UK Property Management costs and services

Discussion in 'Property Market News and Trends' started by Matthew Scott, Feb 28, 2017.

  1. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    Most recent surveys carried out by the National Leasehold Survey have found that Landlords are ultimately unhappy with not only the fees charged, but also the service received by their property management companies and letting agencies. Many Landlords are now looking to self manage their property portfolio, especially as their yield returns are under threat. This could put tenants at risk in the future, as some landlords have little to no knowledge of the market regulations. Please find out more detail in the link below.

    https://www.linkedin.com/pulse/uk-property-management-costs-services-matthew-scott
     
  2. kaco jack

    kaco jack New Member

    I think its always high rate...:)
     
  3. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    Until Landlords across the board have the required level of market regulations, estate agents and landlords will be able to charge the higher fees.

    If the government was to introduce mandatory Landlords courses and they became governed as strictly as property management companies, then the fees would be reduced as the demand would drop off.

    Not only would the non compliant Landlords be removed from the market, it would improve overall tenant confidence, and make sure all remaining Landlords had a clearer picture of the total costs of both acquisition and long term management/maintenance costs.
     
  4. Longterminvestor

    Longterminvestor Administrator

    The actual margins never match the headline margins after accounting for additional landlord costs. Buy to let owners should do more research so they are fully aware of the costs they might incur if they use a property management company against the potential savings and downside of going it alone.
     

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  5. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    I completely agree and that is why new Landlords looking to enter the market should be attending investor courses, especially with the massive host of choices available around the UK. Using these courses to learn from seasoned investors about the early and long term pitfuls, and gaining a understanding of what is likely to go wrong first so contingency fund planning can be implemented as early as possible.

    I have spoken and worked with Landlords local and overseas for a number of years, and buying below market is a great attraction, but as most of us later learn there is a reason it is below market value. This cost saving can soon become a long term loss the more expensive it comes to maintaining your property a few years down the line.

    From the point of view of a seller and being a past property consultant myself. Estate agents have a big part to play in making sure properties are sold for the correct market price, not overvaluing or undervaluing them as to send a ripple effect on future properties transactions later down the line.
     
  6. kaco jack

    kaco jack New Member

    Thanks for your info....
     
  7. totallyproperty

    totallyproperty Administrator Staff Member

    Hi Matthew,

    do you think it's a possibility that mandatory Landlord courses might be introduced by the government in the future? Even though courses might reduce fees of management agents, do you think Landlords will incur additional costs through this training? An interesting prospect...
     
  8. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    I believe the Government will adopt a stance whereby all Landlords must exhibit and demonstrate a basic knowledge of level before entering the market, as to protect compliance and best practice of the rental market.

    Upon a Landlord demonstrating the required level of market knowledge and regulations, the landlord would pass an initial check from associations that manages and oversees the level of service of lettings agencies and property management companies. This will in turn lead to increased confidence of both landlords and tenants holding each to the correct standards. Landlords similar to lettings agencies and property management should have a qualification and be on a register that can be checked by the general public. A fee to remain on this register of approved Landlords would be an extra cost, but also make them more desirable to potential tenants (the higher and better your past reviews,the more chance you have of charging higher rental fees)

    This will have a positive effect for lettings agencies and property management companies, as Landlords will further understand the time, effort and skills taken to manage their properties in the most efficient and effective manner. Landlords main reason for complaining about increased property management costs are down to reduced profit and unclear breakdowns of what is being charged and why? Once both the Landlords and the letting agencies/property management can fully understand each others total costs then parity can be restored.

    Many Landlords are facing increased maintenance costs, especially as their are presently more secondary properties than new builds in the UK. So there must be the realisation that as the property gets older year on year maintenance costs become more expensive reducing long term profitability (even more so when monthly rental charges begin to become more in line with wages, as new build activity picks up) Landlords must be keeping an eye on the level of profit attainable over a long term period (say 10-15 years down the line) and like stocks and shares monitoring yield return, selling when hitting minimum level of profitability.

    The next few years will see the property ownership increase and the rental market share decrease, as 20-39's are now looking to take out a mortgage rather than pay extremely high rental prices for no long term benefits. Landlords are now faced with the dilemma of taking advantage of the those who cannot afford to buy and maximising their profit, whilst also keeping rent at a price seemed desirable to the largest portion of the UK population.
     
  9. realdeals

    realdeals Active Member

    Do we not then risk a two tier system - properties managed by landlords with qualifications and those without? This is a tricky one because the UK needs more rental properties to fulfil demand so putting more hurdles in the way might be counter productive in the short term?
     
  10. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    This approach will set a minimum standard required for an existing Landlord and new Landlord looking to enter the rental market. Tougher regulations will serve as a positive step forward, waning out the bad landlords and highlighting the characteristics of the good landlords as the standard setters.

    By having a clearer understanding of what is expected of you as a landlord, the rights of the tenants and being fully aware of the long term costs associated with acquiring, managing and maintaining their rental property then it provides a mechanism to better manage yield returns in the long term. As I would have previously stated education and knowledge is the most important factor when investing, property investors will crunch the numbers and know the market regulations despite appointing a property manager, whilst not all Landlords will keep an eye on regulation changes or be aware of when a property will be become unprofitable till it happens.

    The first time buyers market is becoming increasing more active, the bank of mum and dad is also becoming a popular finance option, and investment in modular homes to the tune of 25,000 new homes per year up to 2020 will reduce the strain of demand for rental properties.UK Developers will have to play a huge part and streamline their building techniques to build quickly and efficiently, avoiding the issues raised by new home buyers recently regarding the poor build quality. As rent continues to increase at an alarming rate across the country, I predict the rental market to reduce in market share and the attraction of mortgages deemed more attractive. The UK like Ireland boosts one of the youngest populations in Europe, so cheaper and smaller housing (potentially look at micro houses once again) will be favoured by future generations who work their way up the property ladder as they become more financially stronger and safe.
     
  11. InvestVince

    InvestVince New Member

    For landlords who are overseas investors, how to check whether they exhibit and demonstrate a basic level of knowledge before entering the market?
    If this is implemented, will it deter overseas investors from investing in UK?
     
  12. Longterminvestor

    Longterminvestor Administrator

    Who will pay for the education of landlords? I appreciate it is required so that tenants have some kind of stability but is it not just another indirect tax on the property market?
     
  13. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    It wont deter oversea investors, just make sure existing landlords are held to the same high standard of property management companies and agencies.

    It is truly alarming that Landlords are not fully aware of the industry regulations and tenant rights, short sighted invested that don't adhere to the market regulations will always have the issue of dealing with bad tenants facing higher agency fees and increasing maintenance costs, whilst successful investors understand the long term process only attract good long term tenants. The long term costs for good landlords/investors is far less than that of bad ones, as they don't have a resolving door issue.
     
  14. Matthew Scott

    Matthew Scott Property Analyst Premium Member

    Landlords would have to pay fee to show appear on an accredited register, very similar to that of trained professionals. Landlords without an accredited qualification or certificate would be deemed more risky to potential tenants, in turn reducing the level of competition for tenants and also higher rental fees would more accepted to gain a good and fair landlord.
     
  15. Lincoln Boland

    Lincoln Boland New Member

    Hello,

    To comply with the law all letting agents must now publish full details of their fees and charges. These should be easy to find on a letting agent’s website or prominently displayed in their offices. However, some letting agents’ websites do not make it easy for you to see the fees they are charging. Aside from the usual costs, there may also be other hidden charges that landlords and tenants may not be aware of. So it is worth reading up about your rights so you know where you stand.
     
  16. evansoryan

    evansoryan New Member

    Great answer , also it will let tenants to know about the clear cost of their rent and they will learn more about the property management company services
     
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