To launch and grow a successful property management business you absolutely must consider your end-goal before anything else. Next, decide on the business type you want, be it sole trader, limited company or other and go from there.
In this blog post we’ll cover becoming a landlord, managing your properties and getting them filled with tenants.
Getting rental income from properties you own is a great way to make money, especially in today’s financial climate. Fortunately, it doesn’t have to be overly complicated and thanks to some of our clients in the property management and lettings space, we’ve come up with some of the more common challenges they’ve faced and overcome.
How To Become A Landlord
So, you want to become a landlord? To become a landlord, the first thing you need to consider is what kind of landlord you want to be. Of course you want to be a great landlord and it’s possible to do just that renting out a spare room in your own house, renting out your second home, or even growing a portfolio of properties. Each endeavour will require different amounts of liability and marketing to go with it.
The type of landlord you want to become also depends on the type of income you want, be it regular monthly income or if you’re more happy to invest for the future.
Common landlord types
You rent out a room in the house you own and live in to a lodger to earn some extra cash.
You own a second (third, fourth etc.) property be it a stand-alone house or a flat and rent it out to tenants as a property investment strategy that delivers a regular income to you each month.
You might rent a house to students if you own a property near a university.
House of multiple occupancy
You may subdivide a large family home into smaller units which become individual flats.
Letting agents often do not actually own any properties if at all. Larger organisations handle property sales as well as lettings. There are also letting agents who own a few properties that they manage alongside their client’s portfolios.
Property management business
Property management businesses often work like letting agents, though some handle a portfolio of properties they own exclusively and do not take on management of anyone else’s properties.
A property management business can own properties in different cities, regions or even countries, requiring them to work with several localised letting agents.
Sometimes a property management business will be a holding company managing other property management businesses as either a private limited company (ltd) or a public limited company (plc).
Along with the landlord types you could choose, you should also choose a suitable business structure for your venture. It could be that you keep it simple, especially if you’re a resident landlord. You might operate as a sole trader, completing a tax return every year and reporting the income you receive renting out your spare room. If you rent a whole house, you could still operate as a sole trader, but might want to consider starting your own limited company.
If you let multiple properties or a house of multiple occupancy (HMO), you might want to become a letting agent, which is related, but often more hands off in terms of ownership or a fully fledged property management business as a limited company. With the increased liabilities involved, a limited company will give you added legal protection and can offer more flexibility if you’re looking to take a direct regular income from your properties.
Check out Companies House and consult an accountant or qualified financial adviser to get property portfolio management advice specific to your situation. Whichever direction you choose to go, it will form the basis of your marketing strategy and help you define your exact target market.
Managing your Properties
Managing rental properties can be stressful and that’s one reason many people stick to renting out a room in their own home or just a single property. You can always try this property rental management software which up to a certain level is a free rental software for landlords for property management: https://www.reapit.com/
Maybe the best way to manage your properties, especially if you have a portfolio, is starting a limited company and hire a letting agent/ lettings and property management agency to take care of the day-to-day running of your properties. Doing this, you can relax a bit more and expect a regular income dropped into the bank account of your limited company every month. They will handle all of your facilities management and are there to make sure your tennants have the best experience possible.
At least you won’t need to worry about dealing with tenants or fixing a broken boiler at 3 in the morning. You can read some tips about reducing your tax liabilities on rental income and about using a limited company here.
Another thing you should do once you’re a landlord is join your industry organisation called the National Residential Landlords Association (NRLA) https://www.nrla.org.uk/ because they can help you with a lot of the challenges encountered when you are a landlord.
How To Get Tenants
If you choose one, your lettings and property management company will take care of filling your rooms with tenants. They will handle marketing for your property to ensure it’s always filled. Why? Because most property management companies nowadays offer a guaranteed income for a set period of time, say three years.
For a quality letting agent, working with a marketing agency who can handle their digital marketing is a nobrainer. Website, social media and quality video content are examples of how an agency can help developing a marketing strategy and deploying letting agent marketing campaigns.
If you don’t do your marketing through a letting agent or property management company, you’ll need to hire a marketing agency or do it yourself. One simple way to get tenants is through websites you can put an ad on for prospective tennants to view.
With just one property, you’l probably be okay posting ads yourself on relevant websites or finding tenants by word of mouth. However, if you have a larger portfolio, you’ll need a few basic things to set you apart from the rest. Just like a letting agency, a website is a basic requirement and social media can creally come in handy too,
Creating A Property Management Website
Creating a property management website doesn’t need to be complicated and is acievable in a few simple steps.
First of all, you need a domain name. We’d recommend getting a domain name that matches your property management business name. In fact, it’s best to make sure the business name you want is available to buy as a domain name before committing to that name. Check to see if your ideal domain name is available here.
Secondly, you need to find a good host and here are several good website hosts on the market you can choose from. Of course, you’re welcome to use the More Than Venice webiste hosting service and get free hosting for one year with every new website we build for you.
Next you need to work on your copy. The words on your website and of course any pictures you choose will have a huge impact on you ability to get the right tenants into your property. Think clearly about how you’d like to position your business.
Your location, target market and the budget your prospective tenants have to play with have the biggest influence on how you write for them. If you’re not sure about your target market or budget range you want to aim for, you may benefit from learning you customer’s ‘why?’ Why do they want to buy from you and why do you want to provide a great service for them? Why did you even go into business in the first place?
To promote your properties, jumping onto social media will provide you with great opportunities to reach your target audience. Of course, it depends on who you’ve identified as your audience and where they spend their time. Are they on TikTok? Instagram? Facebook?
To get off to the best start possible, be sure to check out the NRLA, Companies House and book an appointment with a financial advisor or accountant to help you make the best choices possible starting your business.
We can help market your property or portfolio directly with our letting agent marketing programme. Alternatively, we work with local lettings agents in Birmingham and the West Midlands and can help you find a partner that would be the best fit to manage your properties and they’ll take great care of you.
If you’re looking for marketing advice, you’re in the right place, so drop us a line and get started marketing your property management and lettings business with More Than Venice.