Average property management fees range between 10-15% of the monthly rent collected but, in some cases, could be between 5% and 20%.
The fees can vary depending on where your property is, what type of building it’s in and what services you need.
If you’re lucky enough to have a property to rent out, you probably know that it can feel like a blessing and a curse.
Property management takes a lot of time, not to mention having to deal with tenant issues, compliance and maintenance. It’s no wonder then that so many landlords decide between self-management and hiring a company to help them.
Whilst property management companies can help landlords save time, they do come with a cost.
Here, we break down all the fees so you can decide if it’s the right move for you.
What Are Property Management Fees?
Property management fees are the fees that landlords pay to professional property managers for managing their rental properties.
These fees are normally set as a percentage of the monthly rent, though some companies may charge one-time fees for specific services.
Though each company varies, their fees tend to cover things like tenant management, rent collection, maintenance and legal compliance.
For landlords, understanding these fees is important as they weigh up the pros and cons of hiring and property management company.
Average Property Management Fees in the UK
The cost of property management varies quite a bit across the UK. The cost will depend on things like location, type of property and how much help landlords need.
Here’s a breakdown of the most common fee structures:
Full Management Services
For full-scale property management, the average fees range from 10% to 15% of the monthly rental income. This typically includes services like tenant sourcing, rent collection, property maintenance, and legal compliance.
Rent Collection Services
For landlords that want to do the managing themselves, but need a bit of extra help with rent collection, these fees normally range from 5% to 10% of monthly rent.
As rent collection can be one of the more difficult parts of the job, this is a service that a lot of landlords go for.
Tenant-Sourcing
For landlords that need help finding tenants, property management companies can also help with this aspect. Some companies do this as a one time flat fee once tenants are in situ, and the cost can range from £500 – £1,000.
This service usually includes taking photos and marketing the property, conducting viewings and screening and contracting tenants.
What Affects Property Management Fees?
Property management fees are usually set as a percentage of the rent. However this percentage can be higher or lower depending on a few factors.
Some of these include:
Location
Property management in big cities like London will often charge slightly higher fees due to the cost of offices and local wages.
Property Size and Type
Bigger properties or those in high-rise buildings usually need more management and may involve liaising with multiple people (like a building manager) which might mean higher fees.
The Services They Provide
The companies that can help with 24/7 tenant support, legal guidance and guaranteed rent collection might cost more because they do everything in-house.
Whilst the cost for them might seem high at first, it does mean that you know all elements are covered in one place.
Reputation of the Agency
Well known agencies with good reputations will usually charge higher fees. However these companies may also be more reliable – meaning you pay for peace of mind.
Portfolio Properties
If you are a landlord with a portfolio of properties, some agencies might give you a bulk discount for managing all of them.
What Is Normally Included in Property Management Fees?
Property management companies normally include the below in their fees:
Rent collection: Making sure that rent is paid on time. This means chasing up any late payments and starting the eviction process if needed.
Tenant support: Being the go-to contact for tenants. Making sure they are the right fit for the property and have any issues dealt with quickly and efficiently.
Maintenance and repairs: Quickly organising any repairs before they become bigger. Working with local, reliable contractors to get the job done affordably, but to a high standard.
Legal compliance: Making sure properties adhere to all safety standards. Making sure landlords are compliant and are up to date with the latest legislations.
Financial records: Keeping all financial records in check, so landlords can easily file their tax returns and evaluate their rental yield.
The Pros and Cons of Hiring a Property Management Company
When weighing up whether to go for a property management company, consider:
Pros:
- Time-Saving: Property managers handle all the admin and operations, freeing up more time for landlords.
- Expertise: Professional managers are experts in legal compliance, tenant disputes and knowing how to market your property properly.
- Less Stress: They deal with all urgent issues, handling tenant issues and emergencies.
- Tenant Satisfaction: A professional service often means tenants are happier, which makes them less likely to leave.
Cons:
- Cost: Management fees can lower rental income, especially if profit margins are already tight.
- Control: Some landlords may want to have more control over their properties.
- Service Quality: Not all property managers deliver the same level of service, so choosing the right agency is important.
How to Choose the Right Property Management Company
Choosing the right property management company is important, and can be the difference between money that is wasted or well spent.
Here are a few things to look for:
- Transparency: Look for agencies with clear pricing and no hidden fees.
- Reputation: Check reviews and ask for recommendations from other landlords.
- Services: Make sure the agency provides all the services you need, like tenant sourcing, maintenance, and legal compliance.
- Communication: Look for a company with responsive customer service team that will send you regular updates.
- Certifications: Make sure that the company is registered with a professional body, such as ARLA Propertymark or the UK Association of Letting Agents.
J Property Management Fees
At J Property Management, we offer a range of services perfect for landlords in South London. We guarantee no hidden fees, so you don’t need to worry about any nasty surprises.
Our fees include:
Full Property Management: 10% of monthly rent
Covering tenant support, 24/7 maintenance, and property inspections.
Guaranteed Rent Collection: 12% of monthly rent
Makes sure landlords receive rent on time, even if there are delays.
Rent Collection Only: 7% of monthly rent
We handle rent collection while landlords manage the rent.
Tenant Sourcing: £750 upfront
We advertise, reference and place tenants. The fee is only payable once the tenants are in situ and the landlord can take over from there.
Is Hiring A Property Management Company Worth It?
Property management fees are an important consideration for any landlord.
While hiring a property management company means an extra cost, the benefits can often outweigh this.
For landlords in South London, J Property Management provides flexible options, so you can rest easy knowing your investment is managed with care and professionalism. To get in touch, call Jessica and Reka on 020 3105 5898 today.
