Starting a property management company is seen as the next step in developing a business for many landlords.
The company handles repairs and maintenance for the homes rented out by the landlord.
Although anyone can start a property management company, there are some legal requirements to meet.
If you are involved in renting homes and have the right skills but don’t know where to start setting up a property management company, this guide will help you set off along your new career path.
Property management explained
Many builders think they make good property managers because they have the skills to fix up a home. Although some make excellent property managers, skills like communication and running projects are just as important.
Property managers sit in the middle of letting agents and tradespeople.
The agents source and manage tenants, while property managers look after the fabric and environs of the buildings tenants rent.
Managing property covers keeping grounds trim, cleaning windows, decorating and dealing with repairs and other issues.
Management may also include rent collection, with a percentage taken as the manager’s fee.
A property manager might also be asked by the landlord client to serve notice on the tenant where there’s been a breach, or perhaps the landlord wishes to sell the property. An agent is allowed to serve a notice on behalf of their landlord client but is not allowed to complete court forms if a possession order were required. Anything to do with court procedure must be done by either the landlord directly or a qualified and insured solicitor.
Some letting agents act as property managers, but portfolio landlords are more likely to split the responsibility between a letting company and a property management company.
Property manager skills and qualifications
If you want a career as a property manager, then the barriers to entry are few and far between.
Communication and good organisation are the two main skills a property manager needs.
Regularly, tact and negotiating abilities come to the fore when dealing with tenants, while coolly managing a project by organising quotes, materials and tradespeople is a talent, too.
You do not need any formal qualifications, although you can gain a university degree or on-the-job recognition.
Several universities offer real estate or property management degrees.
Professional body Training for Professionals runs regular courses for property managers.
For England, although qualifications are not necessary to start a property management company, failing to join a redress scheme approved by the government is an offence punishable with a fine of up to £5,000 and/or closure of the business.
To apply for registration of a redress scheme, the property manager must take out professional indemnity insurance and agree to abide by a code of conduct.
Property managers do not have to align with a trade body, but it’s useful to join one to keep up-to-date with news, new legislation and refresher courses they offer.
Private Rented Sector Professionals is such a body.
The magazine Property Week is also a source of news and information for property professionals.
Starting your property management business
Most property management businesses start as a limited company or limited partnership (LLP).
Whichever framework you pick for your business, you need to register with HM Revenue & Customs (HMRC). You should also discuss your expected finances with an accountant who can advise you about topics like VAT, PAYE and keeping records for tax accounting.
An accountant can also help fine-tune a business plan.
By now, you should have a good idea about what kind of property manager you fancy being.
You can pitch your business as a general property manager or consider niches like commercial or agricultural premises, holiday lets at home or abroad, looking after blocks of flats or offices or houses in multiple occupation (HMOs).
The decision depends on where you live and the type of property within a reasonable driving distance of your office.
Remote working v renting an office
The coronavirus pandemic has proved that service businesses like property management can run from home as well as an office – and remote working saves money and is a better use of time.
Renting an office and everything that goes inside is not cheap.
Working from home offers a better work/life balance and savings on rent, phone bills and puts a brake on commuting.
However, home working is not for everyone, especially young families in smallish homes where quiet and space are at a premium.
To start as a property manager, you need the basics: a car; internet connection, smartphone, computer and printer.
What do property managers earn?
The average salary, according to recruitment site Indeed is £28,620 a year, rising to nearly £45,000 with some companies.
A new-start property manager working for their own company should do better than the £15 an hour the average salaried worker earns.
Most companies charge a retainer for month-to-month work and charge more for any extra time.
Premium services, like 24 hour call-outs, are more expensive.
Your business plan should put a figure on the hourly rate you require to charge first to break even, then in annual profit – the difference between the two is your salary.