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.”