Residential property management involves properties being used as people’s homes as opposed to other business and commercial property, and general ad-hoc uses. It’s actually the form of property management that people are most familiar with, although because of this familiarity there can be confusion and wrong assumptions as to how such properties are actually managed.
It typically includes individual houses and dwellings, whether detached or connected to others to some degree, and with flats either in a communal block or with mixed-use scenarios of say above retail commercial properties. It also often assumes a landlord-tenant relationship, and therefore a need for property management skills to deal with both the actual occupying tenant and lease as well as the literal building.
However, even when people own and live in their own property you can still benefit from property management skills to help with future sales or letting options, and even prepare for other uses such as lodgers and short-term occupiers through intermediaries like AirBnB
Whichever form it takes, it can appear straightforward at first, and something that you then find yourself accidently falling into. It may begin with a simple collection of rent, or repair of a leak when needed, although in reality there can be all kinds of issues and liabilities lurking around the corner.
Also, when you’re dealing with people’s own homes, they quite rightly tend to be more concerned about the detail rather than commercial property which can be more business-like and straight forward.
Therefore, going into residential property management open-eyed can help clear up the confusion, so that even if you do outsource to a managing agent you can at least know the right questions to ask and service to expect.
So here are a few pointers explained through 4 perspectives, which are the 4 main perspectives
of looking at any property interest that we use in our Property Management Guide book. More specifically, it’s worth looking at these in reverse order in that we begin with untangling the detail and documentation and end up looking at the actual property in question.
1. The Paperwork Perspective
Residential property is often either really easy or really difficult when it comes to how the ownership and use is actually documented. On one extreme houses may be just owned freehold, on another there may be flats with various ‘head’ and ‘sub’ leases.
These need getting to the bottom of, not only to understand the literal leases and titles, but all the surrounding legislation concerning them. Residential property has a host of protection for tenants, and landlords as well, as we’re dealing with people’s own homes who may not always be professionally advised.
So once you have the legal picture, start noting who is who, and what needs doing for them. You might have individual unit owners, but then short-term occupiers that may be helpful to correspond with on day-to-day issues. If you have any superior interests, then these may need formally including with communication as well.
You then need to be both reactive and proactive. Reactive in the sense of having information and procedures ready to hand when requested, and proactive as in notices and letters to issue on subjects like invoices, service charge accounts, proposed works, and any landlord sales.
2. The Payment Perspective
The important thing about payments, is that they generally need greater care and attention with residential properties.
One example is with rent deposits for shorter-term leases which need to be paid into a separate holder, and another is with service charges that need to have a separate pot of cash rather than including with the landlord’s own rent monies.
You will also come across other bits and bobs, whether an annual insurance premium paid by the owner or through a service charge
, and one-off recharges direct to owners, and payment of fees for any managing agent or others dealing it issues such as a tenant’s initial application to let.
3. The People Perspective
You will tend to have a lot of different people involved with residential properties, so with any one dwelling in addition to a direct landlord and tenant there may be separate agents or representatives of them, other ‘sub’ of ‘head’ interests as above, separate letting agents, and even family members and occupier contacts.
Get all these clarified, and an accurate record of their contact details and the best way to then liaise with them. For any one interest, you may need an official point of contact but then others to copy in such as actual occupiers and the owner’s agent.
One of the keys to understand the way in which to communicate with people is that communication generally needs to be more consumer-orientated with residential property. Residents will be used to smooth consumer-focused contact with other authorities like utility providers, and will expect it from those managing properties as well.
More complex legal points may need clearly explaining to people who may not have the knowledge or help to understand them - a classic one is with service charges and people knowing what actual costs are being fairly charged and paid for.
The other group of people to be aware of is contractors and suppliers, as these tend to work best with more down-to-earth and hands-on suppliers, rather than some larger impersonal corporate body. That attention to detail on cleaning, for example, will speak volumes, and so long as they are all reasonably priced and ticking necessary compliance boxes, then all should be well.
4. The Property Perspective
The final stage is the actual property, and the physical bricks-and-mortar so to speak. In the frenzy of looking at figures and values, this can unfortunately often be forgotten.
For those actually living at the property it is key to have that feel-good factor, and the building just being right on lots of levels whether location, features, architectural beauty, or usable space.
But even when it does make sense, you then must watch out that you don’t go too far and miss important fundamentals in the process. So focus might be on the building needing a fresh lick of paint in order to look better, whereas in actual fact there are urgent fire-compliance works to consider first.
So get to the bottom of what’s needed, maybe with a building survey, and certainly with things like an inventory for tenants to clearly clarify what repairs they are responsible for. The type of alterations and item that different occupiers take or leave after occupation will also need understanding.
The Bottom-Line of Residential Property Management
So when you’re wanting to better appreciate what’s involved with effective property management of residential properties, whether you’re a landlord or tenant, or other third-party interest like a managing agent, these above four perspectives of looking at the property interest can help place things in context. Although these are explained in reverse order above to get the gist of this, it’s often best to use the other way round when applying to your own situation.
So begin with understanding just what the actual property is, including the literal condition and any personal alterations, and then bring in the people who are involved in this. With residential property in particular when you’re dealing with people’s own homes, its essential to realise that you’re working with real people who often do quite rightly have more of an emotional attachment to the property interest.
Then progress with looking at what payments are involved, as the values, rents, and costs will always count for everyone, no matter how nice the property may be. Finally end with the paperwork, and making sure that everything is correctly checked and documented in line with the vast amount of documentation and legislation you tend to see around residential properties.
Once these are up and running, then you can begin to enjoy the benefits of your residential property interest, whether a healthy return or a wonderful place to live.