It’s something that many of us dream about: being in the position to buy and let out properties. Securing a monthly income from rent that could eventually allow us to quit the 9-5 and retire early to somewhere in the sun.
 
Having a number of properties that can be let out can be a great money maker, and can provide an enviable lifestyle. But of course, managing a property portfolio is likely to come with a large number of questions. There are laws, obligations, best practice guidelines, and rules set out by local councils that vary from place to place.
 
How has the law changed when it comes to landlords and tenants in 2019? What are your legal obligations both before and after your tenants move in? What kind of high net worth home insurance might you need? These are all important questions that you’ll need to think about if you’re building or managing a property portfolio. Luckily, we’re here to provide you with some of the answers.
 

Managing your own property portfolio

When building your property portfolio, one great piece of advice is to invest your money in various different types of property. This could include commercial rentals (i.e. offices), student flats, mansions, family houses and other private rentals, in order to ensure that your investments are safe if one part of the property market takes a tumble.
 
Investing in property in the same geographical area is also likely to be a wise move, so you’re not travelling multiple miles every week to fix problems or manage house viewings. You might also want to buy properties in bulk at auction, particularly if you want a good deal on a few fixer-upper properties in the same area. Find out more about that here.
 
It’s also strongly advised that you seek outside help, particularly from a financial advisor or an accountant, in order to free up your time and ensure that you are looking after the financial side of your portfolio properly in order to maximise returns and stop yourself making errors that could easily be avoided.
 
It’s also an extremely good idea to make use of a property management company (more on those later). If you do want to manage your own property portfolio without external help, though, it might be helpful to be aware of the following things:
 

• Organisation is key. Make sure you have all the documents that you need that pertain to each property in separate folders, and that you’re on top of when rent, deposits, inventories, gas certificate checks and any other important dates or appointments are due.
• Landlord management software can be helpful. Look into whether there is a package that could help you manage your portfolio without having to pay for the services of a property manager.
• Stay on top of your goals. This point is important: you need to stay aware of why you’re investing and what level of wealth you want to achieve, and not give in to impulse buys if they could deter you from getting where you want to be.
• Beware of changing property laws. Political instability means we can’t be sure who will be leading the government in a few months’ time, and a change could see the introduction of the much-discussed ‘mansion tax’. No plans have been confirmed, but it’s something property investors should keep their eye on. Indeed, some councils (including Kensington and Chelsea) have already put forward plans for similar schemes.
• Think about insurance. High net worth home insurance, for example, could be something that you need to consider alongside your other insurance policies. We discuss this more later on.

How do you manage property?

There are a number of things that you’ll need to do if you want to manage your properties both safely and in compliance with the law. Here are just some of them:
 

• Find tenants and manage their views, referencing, inventories and moving in and out dates
• Ensure fairness and legality in the contracts that you ask your tenants to sign
• Ensure that the wiring, white goods, boiler etc in your property are completely safe
• Be on hand should there be an emergency, even at unsociable hours
• Deal with any problems or disputes that arise concerning your tenants and the property
• Manage rent collections and/or evictions if needed, in a legal and fair way

 
Legal things that you must do include:
 

• Carry out rent checks to ensure that a tenant is legally allowed to rent a property
• Abide by the Tenants Fees Act 2019 (this is the 2019 law that banned extraneous fees for tenants)
• Fit a smoke and carbon monoxide alarm
• Check the water and gas safety in the property
• Give your tenants a copy of the Government’s How to Rent guide
• Ensure the property is free from hazards throughout the tenancy
• Carry out safety checks and provide tenants with certificates before the tenancy begins
• Protect all deposits in a Government-approved deposit protection scheme

 
This list is not exhaustive, and you’re likely to have other things that you need to be aware of depending on your particular property or properties, or if you’re renting out a manor house, mansion or larger estate. You can read more about your obligations as a landlord here.
 

Property management

 
As is becoming clear, there is a huge amount to keep track of when it comes to property management. With tenants, contracts, security, deposits, rent, insurance and various other things to organise, it might be prudent to enlist the help of an experienced property management company that can take care of these things for you.
 
This could be especially important if you live far away from the property, or have a number of different properties that need managing at the same time. If you have land that needs to be maintained, too (for example if your property portfolio contains mansions or estates with grounds) this is likely to be even more important.
 
Read on to find out what a property management company can do for you, and how much you’re likely to need to pay them for the service.
 

Property manager costs and responsibilities

How much does a property manager cost?

As might be expected, the cost of a property manager is likely to vary depending on the size, type and location of the property that you need to be looked after. As a general rule, a property manager will cost between 8% and 12% of the rental value of your property ­– so for example, if your property would cost £1,000 per month to rent out at the current market rate, you should expect to may a property manager between £80 and £120 per month.
 
Of course, as with many things you are likely to find that different companies will offer different services and therefore charge different amounts. Property management can reportedly cost as little as 4% of the rental value of the property or as high as 17%. Expenses are paid on top of this fee, and some companies may charge other fees if they are managing, for example, the marketing of your property.
 
To find out how much your property is worth on the rental market, you could speak to an estate agent who knows your local area well. Alternatively, you could use an online tool, which will value your property based on location, local demand and property type. You can then work out how much you’re likely to need to pay a property management company based on this information.
 

What are the responsibilities of a property manager?

There are a few things that a property manager should be expected to do as standard:
 

• Organise and manage any viewings, the marketing of the property, tenant contracts, references and deposit payments
• Manage any difficulties, disputes or problems that the tenants find when they are in or after they have left the property
• Manage all inventories and rental payments
• Ensure a level of security within the property, especially if it is a building with a number of properties (flats) within it
• Ensure a high level of upkeep both inside and outside the property
• Respond quickly in any emergency related to the property
• Manage rent collections or evictions if needed

 
Whether you need your property manager to perform all of these tasks on your behalf will depend on various factors, including how many properties you have responsibility for, their type and size, how far away you live, and how much experience you have in managing property. The level of support that you need from them will, of course, also affect the amount that you pay them.
 

Do I need a licence to manage my own properties?

Whether or not you need a licence to act as a landlord or manage your own rental properties will vary between different councils. Some types of property, for example, Houses in Multiple Occupation (HMOs, which see three or more unrelated people living together and sharing facilities such as the kitchen and bathroom) may have different rules to those intended for habitation by, say, a couple of a family. Hackney Council, for example, requires landlords of HMOs to have a licence.
 
Find your local council here, and contact them to see if you need a licence to manage your property as a landlord.

How do you manage multiple properties?

If you own multiple properties, it might be worth investing in a management company to save a lot of time and effort on your part.
 
But if you do decide to manage your properties without outside help, we’d recommend investing in software that can at least help you keep track of all the key dates and financial obligations linked to each of the properties. That way, you’ll have all the information you need stored in an account online and you won’t need to worry about misplacing paper contracts or forgetting to take important documents along to meetings.
 
Investing in software will still need some organisation, but will make your life a lot easier, especially if your properties are in different geographic locations and/or have very different needs. A quick Google search will throw up options for the best property management software, so spend your time doing some research to find the one that best suits your needs.
 

High net worth home insurance

One of the things that you’ll definitely need to consider is high net worth home insurance – and that’s whether you’ve got one property or 20, and whether you’re managing it yourself or not.
 
If you are keeping personal items within your property whilst you rent it out, or even if it’s empty or if you’re living in it yourself, you’ll need high net worth home insurance if the contents exceed the £100,000 mark.
 
A standard home insurance policy won’t be able to give you the bespoke protection you need. In this case, you’ll need a specialist who can offer a package tailored to your unique risk exposure.
 
You’re also likely to need high net worth home insurance if your property portfolio contains listed buildings, so you should look into this option if you own high value country estates, mansions or manor houses.
 
Here are some things that you should look out for when seeking a provider for your high net worth home insurance: 
 

• A company that offers a bespoke package
• A tailored service
• A dedicated portfolio manager
• A specialist private client team
• Personal appointments as standard
• Expertise in high net worth
• The ability to advise on valuations
• A swift claims process
• An annual renewal review

 
Obviously, not all insurance providers have the resources to offer this service. However, companies such as Insurance Choice are built with private clients and high net worth individuals in mind, so are more attuned to your needs.
 
Ready to get a quote for your high net worth home insurance? Call our friendly team today.