From understanding the meaning of property management to acquiring property management qualifications in the UK, the following essential steps can help you create and run a successful property management company.
Understanding the meaning of property management
Before diving into the details of setting up a property management company, it's important to grasp the fundamental concept of property management. Property management involves the oversight, operation, and maintenance of residential or commercial properties on behalf of property owners.
The primary objective is to safeguard the property's value while generating income for the owner. Property management typically encompasses various responsibilities, including:
- Rent collection and financial management.
- Property maintenance, repairs, and improvements
- Tenant screening, leasing, and eviction procedures
- Legal compliance and property inspections
- Communication with property owners and tenants
Property management qualifications in the UK
While there are no mandatory qualifications for property managers in the UK, obtaining relevant qualifications can significantly boost your credibility and confidence. As a budding property manager you may want to consider these qualifications and certifications:
- Industry-Specific Qualifications: Consider enrolling in property management-specific courses and qualifications. The NFoPP Level 3 Award in Residential Letting & Property Management, for instance, covers the legal and practical aspects of property management in the UK.
- Professional Associations: Joining professional associations like the National Association of Residential Property Managers (NARPM) in the UK can offer valuable networking opportunities and resources for skill improvement.
- Regulatory Awareness: Keep yourself informed about property management regulations and legislation in the UK. Being well-versed in landlord and tenant laws is essential for your success in the industry.
How to get into property management
Starting a property management company requires a solid understanding of the industry, as well as practical experience. Some of these steps may help you embark on your journey into property management:
- Gain knowledge and experience: Begin your journey by educating yourself about property management practices and UK property laws. Dive into literature, take online courses, and attend relevant seminars to expand your knowledge. Consider gaining hands-on experience by working for a property management company or a real estate agency. Learning the intricacies of the industry in a professional setting will prove invaluable experience.
- Identify your niche: Decide the type of properties you wish to manage. You can opt to focus on residential properties, commercial properties, or a combination of both. Your niche will define your target clientele and services.
- Develop a business plan: No start up can success with a comprehensive business plan. Don’t skip this plan and always be realistic with your estimates. Get some help if you’ve never writer a business plan. Local chambers of commerce could be a good resource and some banks provide this service too these days.
- Build a strong network: Property management is a people business and networking is essential. It helps you establish relationships with real estate professionals, property owners, and potential clients. Join local real estate associations and organisations to expand your network and connect with individuals who can offer guidance and support. Use social media to extend your reach.
- Plan operations: Efficiency is every business is key and property management is no exception. Create systems for managing properties, including rent collection, maintenance requests, and communication with tenants and property owners. Using property management software to streamline your operations can be enormously helpful but be aware that it comes at a monthly cost.
How to set up a property management company
When you are at the point of starting a property management company, it’s time to put everything you've learned and planned into reality:
- Step 1: Business set up: You’ll need to form your company. Most property management companies start as limited companies. You’ll also need a bank account and launch a website so that customers can find you and have a way of contacting you.
- Step 2: Portfolio building: Start managing properties for friends and family if possible to build your portfolio. Other than furthering your experience, you can secure genuine positive reviews which helps with the trust element.
- Step 3: Tenant screening and agreements: Put in place a thorough tenant screening process to ensure you secure reliable and trustworthy tenants for your clients. Make sure that your rental and lease agreements are clear and cover all the angles, including tenant responsibilities, rental terms, and expectations.
- Step 4: Property maintenance and repairs: Build a network of trusted contractors and service providers for various property needs who can promptly address any maintenance and repairs issues.
- Step 5: Keep your finances in order: Hiring an accountant is highly advisable in property management. You’ll be responsible for other people’s money such as rents and deposits. Therefore having a separate business bank account and a qualified accountant to help you manage finances is essential. Property management insurance is also crucial. When so many parties are involved, conflicts arise easily and some can turn into legal problem. Make sure you are protected.