When I speak to landlords who are looking for a new managing agent, the conversation
almost always starts the same way “How much do you charge?” Or “What are your
fees?”
It’s a completely reasonable question, but I actually think it’s the wrong one.
The question shouldn’t be, “How much does property management cost?” It should be,
“How much is poor property management costing me?”
The management fee is rarely the thing that has the biggest impact on a landlord’s
return. It’s everything else.
Over the years I’ve seen landlords move agents to save 2% on management fees, only
to lose thousands through avoidable voids, poor communication, missed compliance
or reactive management. On paper they were paying less each month, but in reality
their property was costing them far more.
That’s the problem with property management. The things that really cost money often
aren’t obvious until it’s too late.
Take void periods as an example. If you’ve got a room renting for £700 per month and it
sits empty for an extra two weeks because enquiries weren’t followed up quickly
enough, viewings weren’t flexible enough or the marketing wasn’t strong enough, you’ve
just lost around £350 in rent. That’s before you’ve paid the utility bills, mortgage,
insurance or any other running costs that continue whether someone is living there or
not.
Suddenly the £20 or £30 a month you saved on management fees doesn’t look like
much of a saving.
The same applies to maintenance. Good property management isn’t about fixing things
when they break. It’s about spotting problems before they become expensive. A small
leak left unchecked becomes damaged ceilings. A loose tile becomes water ingress. A
tenant who doesn’t feel listened to stops reporting issues altogether, and before long
you’ve got a repair that’s several times more expensive than it needed to be.
One of the biggest misconceptions about our industry is that managing agents simply
collect rent every month. If that’s all we did, I’d agree that management fees should be
low.
But that’s not what happens behind the scenes.
A good managing agent is constantly chasing contractors, keeping up with changing
legislation, checking compliance, negotiating with tenants, reviewing rents, adapting
marketing strategies, resolving disputes, arranging inspections and making dozens of
decisions every week that protect your investment. Most of those things happen
quietly. In fact, if we’re doing our job properly, you probably won’t even know they
happened.
That’s exactly how it should be.
The industry has changed more in the last few years than at any other point in my
career. Landlords have more legal responsibilities than ever before, and the
consequences of getting something wrong can be significant. Whether it’s licensing,
deposit protection, safety regulations or the changes brought in through the Renters’
Rights Act, staying compliant is no longer something you can afford to think about once
a year.
It’s something that has to be managed every single day.
When we take on a property, our aim isn’t simply to collect rent and answer the phone
when something goes wrong. Our job is to protect your investment. Sometimes that
means filling a room as quickly as possible. Sometimes it means having a difficult
conversation with a tenant before a situation escalates. Sometimes it means advising a
landlord not to make a decision because, although it might save money today, it’ll cost
far more in the long run.
That’s the value of good property management.
So, yes, management fees matter. Of course they do. Every business has a budget and
every landlord wants good value for money.
There is a massive difference between value and price.
The cheapest managing agent isn’t always the cheapest option, just as the most
expensive isn’t automatically the best.
Who is going to protect your investment, minimise your risk and maximise your return
over the next five or ten years?
That’s the question worth asking.
At Invest MultiLet Property Management, we don’t aim to be the cheapest managing
agent in Manchester. We aim to provide the kind of management that saves landlords
far more than it costs. Sometimes that’s through reducing voids. Sometimes it’s by
preventing expensive problems before they happen. Sometimes it’s simply by giving
landlords the confidence that their investment is being looked after as if it were our
own.
And in my opinion, that’s the real cost of property management.