Property Management: How Much Do Letting Agents Charge To Manage a Property?
Typically in the UK, estate and letting agents offer a property management service to landlords to generate an additional revenue stream. Traditionally, they will offer their letting agency services and look to onboard customers into a property management service once their property is let.
What is Property Management?
Property management is the professional handling of a property’s day-to-day activities and maintenance on behalf of the owner. This may include rent collection, handling maintenance queries, ensuring adequate property owners’ insurance is in place, and handling legal requirements.
What Do Letting Agents Charge To Manage a Property?
Generally, fully managed property management services can range anywhere from 8-15% of the monthly rent. This fee is deducted from the rent received by the letting agents for their management services prior to forwarding the remaining balance to the landlord, along with a financial statement to evidence money received vs any other allowable expenses.
For example:
- Rent Received: £1,250
- Management Fees: £187.50 (15% of rent)
- Balance Payable: £1,062.50
This example would suggest there have been no other expenses during the month. If, for example, a tenant reported an issue with their boiler breaking down during that month, the letting agents will likely arrange for a Gas Engineer to visit the property whom may charge an average £120 call-out fee to resolve the issue.
Revised example based on this:
- Rent Received: £1,250
- Management Fees: £187.50 (15% of rent)
- Maintenance Expenses: £120
- Balance Payable: £942.50
How Does Novellus Property Management Differ?
We pride ourselves on putting property management first, and being able to offer highly competitive fees for our management services. With our fully managed service, we triage all maintenance issues first-hand prior to calling out a fully-insured professional for more complex fixes.
In the example given above, the boiler breaking down was simply due to a loss of pressure; something the tenant didn’t realise needed to be manually topped up – the call-out (& associated fee) could have easily been avoided.
Example fees with Novellus Property Management:
- Rent Received: £1,250
- Management Fees: £100 (8% of rent)
- Maintenance Expenses: £0 (first-time fix during triage)
- Balance Payable: £1,150
In this example, the landlord’s earnings would have been boosted by a huge 17% of their monthly rent by using Novellus Property Management over the other high-street agent!
Conclusion
Choosing which agent to use to manage your properties is no easy task – it’s about weighing up the costs vs benefits and choosing an agent which stands out from the rest.
If you’re a landlord in the Manchester area and are looking for a new managing agent, we’d love to chat to show you how we can save you money, offer exceptional levels of service and improve your bottom-line.
Contact us today to discuss moving your portfolio management to Novellus Properties with one of our dedicated Property Managers!