If you are new to the property management game, please don’t be daunted by the whole thing. It may appear confusing at first, trying to figure out what you’re supposed to be doing at the property and then how to deal with any rents and costs, but like with anything, once you know the basics you can be soon on the track to easily managing.
This is actually why the Property Management Guide book was written, to help de-mystify the whole process and help everyone be able to effectively manage properties themselves.
Admittedly, there is a certain skill-set and perspective on things that isn’t for everyone, but even if it isn’t your forte then it’s handy to still know some of the basic property management tricks even if the whole thing is outsourced to, say, a property manager.
Therefore no matter what stage you’re at, here’s some advice for those completely new to property management and who need a helping hand.
Maybe you’re a new landlord and you’re looking to begin managing a new tenant, or maybe you’re now involved in occupying different locations and you suddenly have landlord’s and property compliance needs knocking at your door. This might all be by choice as you embark on a new property portfolio, or maybe circumstances have meant you need to become a landlord, say, as you have to rent out your own home.
Either way, here are our top 5 pointers to begin your property management journey:
1. Work Out What You Have to Manage
This may sound obvious, but work out what exactly you have to manage. This will boil down to a real property or land interest, so even if it takes a plan to clarify how much of it is involved, and then alongside a good old inspection and dig around in hidden places like lots and garages, you can soon get this bottomed out.
In the frenzy of people wanting returns and rents from a property interest, they forget that it is a real piece of bricks and mortar which can have real issues to deal with. Checking the reality of the space alongside any documentation and condition surveys will help you begin to see what you now have to manage.
2. Check Tenants & Tenancies
Tenants will often be main issue with managing property, whether you’re a landlord needing tenants in paying rent, or you are a tenant yourself letting business and residential space.
It’s therefore critical that these are clearly understood and set-up, as they will be the reason for deriving the rent and value from the property, and who need to practically benefit from the property.
For existing tenants, make sure you have a fully signed lease in place, and check when it ends and what you need to get in place for this either renewing or ending. If you're just arranging a new one, make sure it is completed correctly either through a solicitor or your letting agent.
In addition to the paperwork, the money of course matters, so make sure any rents are going to be correctly charged and collected into the right bank account. Any deposits will also need clarifying, and in the case of residential short term tenancies, will need legally lodging with a third party provider.
For larger and more complicated properties, you may have a service charge to operate or pay, which should be a separate pot of money and accounting basis.
3. Clarify What the Property Needs
Once you know who is going to be in the property and on what basis, you can begin to look at what needs doing for the property itself.
One main area is insurance, with the property owner generally arranging the building insurance and possibly recharging any premium to tenants, and then occupiers their own contents and business insurance.
The other main area of course is maintenance of the property, both the obvious repairs to the actual property like a leaking roof or redecoration, but also the host of legal compliance issues for services and maintenance ranging from fire compliance to asbestos surveys. We have a quick list of the main ones in our free Property Management Pack and the Property Deal Cheat Sheet, available here.
Also watch out for the smaller day-to-day aspects, such as car parking requirements, access and security for the property, and the way in which utilities like gas, water, and electricity are held and paid for by different people.
4. Bring in Others to Help
The art of good property management is being able to manage others to do their parts, and you being able to coordinate these all together for the good of the property interests.
Your initial letting or sales agent and solicitors will be obvious ones involved at the beginning, but you may also need to think of building surveyors and property managers for some aspects of the management afterwards.
Contractors are of course another important aspect, both reactive repairs but also any compliance items. Check if they need to be accredited, and correctly go about selecting the right and most reliable ones.
You also need to think of any other third parties, whether that's a next door neighbour or a legal interests like a management company, mortgage lender, or lease guarantor. They may need informing of things formally, and it may pay off to keep them in the loop on things anyway.
5. Setup a Proactive Procedure
As you begin to get things up and running, you now need to make sure it's ticking over nicely going forward.
Any ongoing agreements like leases and contractor arrangements need a clear timescale and basis of renewal, with any clear goals and deadlines to adhere to.
On the money side, make sure invoices are issued and paid timely, and any processes to deal with late payers are in place. It may be one thing having money on paper, but all it takes is a late person paying the rent meaning you don't have the cash in the bank to pay the next utility bill or mortgage payment. Of course there’s also any annual tax and accounting reports and accounting to issue as well.
Make sure any appointed parties like managing agents are doing their jobs on time and reporting any issues back, and whomever it is who needs to inspect the premises actually does so and takes action on any issues spotted.
Beginning the Property Management Journey
As you now begin to manage your property interest, and then begin with first understanding what the actual property and people interests are and how they all fit together.
It may seem complicated at first, but remember that it all boils down to a real property asset that people will be using and paying for.
You can then begin mapping out an action plan, right form of basic repairs and compliance issues, to making sure the rent and income is coming in and any costs are reduced.
The trick then is to have a clear procedure on how to manage things going forward, both proactive measures and also ways to deal with reactive issues that do crop up.