International
Property Management
Flooding in Britain this autumn has created huge repair headaches
for property owners, not to mention endangering house-price
values. For an expatriate landlord, it’s one situation
where a good letting agent can be a financial lifeline.
Jenny Dixon, partner at White Rose Property Management in
York (one of the areas worst-hit by flooding), says water had
only affected one property on her books at the time of writing.
It meant rapidly organising work to pump out water and ensuring
that central heating was constantly on to dry out the house.
“The quicker you can react, the better,” she says.
Expat Property Management
Expatriates considering investing in rental property, or letting
a family home, must take this sort of risk on board. It’s
a strong argument for paying for the services of a professional
agent who will proactively sort problems out. “We’ve
certainly got a better feel than a landlord for what’s
going on in the marketplace. Lettings is contra-cyclical to
sales and people’s demands change all the time,”
says Jacqueline Ironside, proprietor of Ironsides in London.
International Property Management Letting Services
There are three main types of letting services: marketing
the property and finding the tenant for a typical fee of 10
per cent of gross rental income; finding the tenant and collecting
rent for around 12-13 per cent; and finding the tenant and ongoing
management of the property for around 15-16 per cent (add VAT
to this). Most expatriates choose letting and full management
for obvious reasons.
Some agents will provide variations on these, for instance
Knight Frank and Hamptons International will also do full management
as a stand-alone service for 6 per cent plus VAT - useful if
you’ve already found a tenant. It’s worth trying
to negotiate the fee down slightly for a larger property, or
if you’re intending to let for a few years.
International Estate Management
Many agents involved in letting also do estate agency or investment
buying services. A big corporate agency can certainly provide
large-scale marketing. Hamptons’ separate corporate services
department focuses entirely on developing relationships with
companies’ human resources staff to source quality tenants
for its lettings arm, while its website features all rental
properties and is updated daily (overseas landlords can also
log on securely to track payments into and out of their client
account, rather than waiting for financial statements to arrive
by snail mail).
International Property Management - Buy-to-Let
The popularity of buy-to-let has been enhanced by the market
conditions of the past few years. Land Registry figures for
2000 as a whole showed property price increases in Greater London
of 18 per cent, higher than in either 1999 or 1998, while over
the last three months of the year there was a rise of 13 per
cent against the same period in 1999.
International Property Management
Meanwhile, the London rental market has strengthened recently,
according to research by estate agent Knight Frank. Tenant demand
was up 15 per cent over the year to March 2001 (notably in the
Home Counties), while supply of prime rentable properties fell
by 30-40 per cent (particularly in central London) - the latter
a reflection of owners deciding to sell rather than rent their
properties, in order to reap the benefits of excellent capital
growth. As a result, says Knight Frank, prime rental values
in London had risen by 11 per cent in the 12 months to March,
and by 5.8 per cent elsewhere in the UK.
International Property Management - Long Term
But buying property to let is a long-term commitment. Here
too, the outlook is a rosy one. Statistics on capital growth
from rental property consultants London Central Portfolio -
based on information from the Council of Mortgage Lenders and
the Land Registry - show that Greater London average house prices
have doubled five times in the past three decades.
In other words, if you bought a property for £5000 in
1969, it would have been worth £160,000 in 1999. And if
you take into account net rental income as well, the value of
that 1969 purchase has increased 40-fold.
International Property Management - Long View
Taking a 25-year view, Knight Frank says: “Total returns
on residential property have outperformed all asset classes
(including commercial property), with the exception of equities.”
|
