Lettings property management is a challenging job; with long hours, high stress and sometimes high emotions. A cool head is needed, great organisation skills as well as the ability to get stuff done. Many landlords and property owners rely on professional letting agents to take on the role of property management. Landlords may bulk at the fees but the work involved is significant and an average letting agent earns less profit than may be expected - typically the average is 10-15% before tax.
In this article, we focus on some of the biggest struggles that property manager encounters in their job. This list helps to understand the work involved but also the required skills and character to be a good property manager:
1. Rent payment issues
Tenants often have some justification for not making a timely payment. But missed payments and payments that are made beyond the due date are all worrying and can quickly cut into profitability. When payment issues arise this demands a decisive and multifaceted strategy to achieve a solution.
In order to make tenants aware of their obligation to keep their payments made on time, there should be:
Someone assigned in the team to specifically go about collecting payments on the due dates and following up on arrears and chasing late payments.
Levying penalties or late fees, which are a proportion of the total amount owed need to be enforced and raised. When the property manager is able to rationalise with the tenant to pay now and avoid further fees, such common sense measures usually help.
If arrears are left to build-up with a tenant and remain unresolved for more than 3 months, the task of collecting the outstanding arrears becomes incrementally harder. Therefore timely resolution and stopping a missed rent becoming 2 or 3 missed rents without an agreed resolution plan is absolutely essential.
2. Maintenance issues
Maintenance of a property is a continuous task. It can be related to structural, plumbing or electrical and applies equally to blocks of flats and individual homes.
A maintenance issue could arise at any time of day, so the issue must be verified and if confirmed urgent, the repair made right away to keep tenants happy and to save damage to the property. Repairs need accurate work estimates, costs need to be approved by the owner and clear works orders/instructions need to be provided to contractors to minimise delay and confusion.
Operating a preventive maintenance program for each property and using qualified staff, experienced in dealing with maintenance issues, contractors and handling the repairs coordination is the best way to keep maintenance issues controlled.
3. Tenants who exhibit antisocial behaviour
Sometimes even entering a property with some residents inside can be risky for the property manager (especially if it comes to a property that is rented short-term). When individuals on the premises are aggressive or destroy the property - that vulnerability can be amplified. Unfortunately, property managers occasionally have to deal with unpredictable and possibly irrational individuals. It is considered part of the job.
Property trashing or destruction are other problems that may arise, and the consequences can be quite devastating. The property manager is likely to encounter a few challenging tenants throughout their tenure - making their job much more difficult. To avoid issues that may trigger harm to the property, it is essential to screen the guests before handing the property keys over and to establish a non-refundable security deposit that may come in handy in case of any damages.
4. Addressing complaints from tenants
Tenant complaints may keep coming in on a daily basis. These complaints can be minor disagreements with neighbours or serious complaints about the condition of the property. The majority of complaints, however, involve fixing or improving the property. Every complaint must be investigated and cannot be disregarded, especially concerning possible issues with the building's structural components. Additionally, tenants should also be certain that their complaints are being acknowledged and that the necessary steps are being taken.
5. Keeping up with property regulations
Understanding the laws governing tenancy and property ownership is essential for being able to address the demands of both tenants and owners. It is crucial that the property manager is familiar with these guidelines since they will not only have to obey them on a regular basis but also notify others of them.
The property manager must also be well-versed in the rental market in order to get information in the event of a sudden or unexpected issue.
6. Time management
Because there are so many various duties to complete, it's frequently impossible to foresee what a day will entail. Even with the best organisational abilities, an orderly day might be derailed by an urgent problem involving renters, owners, or both.
The property manager must be able to think quickly on their feet in addition to meticulously arranging work days and weeks to ensure that all the necessary boxes are checked. That necessitates the capacity to continuously reorder jobs in order to complete the most urgent ones first.
7. Complex accounting and bookkeeping issues
There are myriad issues related to accounting and bookkeeping. Sometimes an accountant’s time can be costly and it can be hard to find a qualified professional to do the job. Nevertheless, having someone to periodically review your finances and ledgers is absolutely crucial to the financial health of a property business. It would be useful to know that Rentancy offers accounting and bookkeeping features as a part of its packages. Our experts are knowledgeable about all relevant laws, regulations, savings, and deadlines. Being able to manage taxes and property costs has always been crucial in the real estate industry, so having someone who will take care of the accounting issues can be a huge asset.
8. Profitability of Property Management
The property manager works hard on managing the portfolio, yet the profit just does not seem to be there to reflect the hard work. This will be a topic of a whole separate article, but common areas to explore are:
Vacant properties - these lead to void periods for both clients and agents, reducing management fees collected. Missing just 1 month in fees is an instant 16% reduction in profitability.
Rent not set at market value - it is vital to examine the property to determine the true value of the lodgings and to determine what customers are prepared to pay before setting the appropriate rental price. It also helps to do some research on the prices that people are currently paying for properties in similar neighbourhoods. Not adding say 5% or 10% as a rent increase, means fewer management fees collected.
Missed charges - sometimes agents forget to bill management fees for some property of service provided to a client. A good software package should automate billing and ensure completeness and accuracy. Running an exception report of any properties where no fees are collected over a year is also a useful report to track.
Over-staffing - sometimes making a bet to hire an additional staff member ahead of expansion to a bigger portfolio does not always work out and leads to reduced profitability. Finding other methods such as using Rentancy to help you with remote property managers or bookkeepers can be a way to solve this.
Recruitment fees and other unplanned costs - it is easy for additional expenditure during a year to creep into the cost of property management. Recruitment fees for staff hires can be expensive when you calculate them in terms of management fee income. A 15% on a £25,000 salary for instance is £3,750. In management fee income on say a £1,000 rental/mth that is almost 1.5 years of 1 property in expense. Other areas where costs can grow easily is PR, advertising as well as legal and accounting fees. Our experience has been to set a clear budget for the year and try not to become distracted by unplanned expenditures. Invest only if there is a compelling ROI or cost-saving benefit.
Managing a property is a complicated business, involving; negotiation, understanding and working according to relevant laws and regulations, maintaining professional connections, being approachable but firm, and acting as part of a broader team.
Whether challenges come from the owners, tenants, personal issues, or the property itself, the property manager has to react quickly and be proactive in arranging their schedule to best meet the needs of their clients. The role requires a high level of organisation and constant re-prioritising.
How can Rentancy help?
Rentancy has an expert team of highly qualified bookkeeping and property professionals with collectively 50-years experience.
Advice on setup and structuring of bookkeeping processes
Help resolve balances in existing accounts
A Balance scorecard of how well an agent is operating
Client Accounting Services:
Daily bank reconciliations
Process contractor payments
General accounts query handling
Process landlord payments
Producing and sending landlord statements
Manage property expenses & invoices
Monthly KPI reporting
Coordinating day-to-day maintenance
Keeping up to date with ongoing compliances - GSC, EICR, EPC
Arranging periodic inspections - carried out by 3rd party
Working on tenancy contracts renewals
Working on the end-of-tenancy contracts
General query handling
Right to Rent Checks
Interested in our help? Submit your inquiry to talk to an expert. Or message us on WhatsApp at +44 330 321 3500.