If you’re a multi-property landlord it’s vital to adopt a strategic approach to the management of your portfolio to maximise both your rental income and capital growth.
And with the last 12 months seeing a rise in market confidence and returns, landlords need to ensure that lease events — such as rent reviews, lease renewals and break options — are continually monitored and acted upon.
The advice comes from South West property consultants, Vickery Holman, which says that asset management is now its fastest growing service. “Managing reviews and renewals at an asset management level allows a landlord to review portfolios as a whole, enabling them to proactively identify the best strategies to either maximise cost savings or income streams,” said Vickery Holman’s Head of Professional Services, Nick Holman.
“It will also allow a landlord’s agent to provide recommendation reports in advance of key lease events and, as a result, give clients time to adjust their budgets in advance of any changes.
“Portfolio management gives landlords the chance to look beyond the perceived primary issue of rent, especially at lease renewals, to see if there are other matters that warrant consideration in the wider context of asset management such as lease terms or the requirement for additional space,” added Holman, who is a member of the Royal Institute of Chartered Surveyors’ President’s Panel of Arbitrator and Independent Experts.
As the end of a lease approaches, both landlords and tenants should carefully calculate the time and expense that is going to be needed to return the property to an acceptable state of repair.
“It’s not uncommon for tenants to run out of time and either rush the work — resulting unfinished or poor quality of work and items missed — which is then justifiably undertaken again by the landlord,” said director Dennis Venn and Vickery Holman’s Head of Building Surveying.
“Prudent landlords will involve surveyors during this dilapidation phase in order to manage the work and to allow both parties to agree costs in advance.” He added that if the matter is being dealt with after the tenant’s departure the landlord does have the right, if specified within the lease, to recover costs and losses.
As a lease comes to an end the landlord should review its terms to clarify his obligations to inform the tenant of any reinstatement work that may be needed. “It’s important to prepare a pro-active strategy for the building with the focus on marketing the soon to be vacant space,” Venn stressed.
At a “procedural level”, a property manager is needed to ensure the trouble free administration of a property or portfolio. They can also ensure that clients are kept up to date with changes in legislation affecting their investment.
Stefan Parkins, Vickery Holman’s Property Manager, explained: “A property adviser will add value to a client’s investment through being proactive, not only in terms of lease events but also concerning maintenance and repairs.
“In multi-tenanted buildings, for example, when is the best time to carry out service charge works to maximise their effect — but also minimise any landlord or void costs?”
Through regular meetings and inspections, good working relationships with tenants are established and often this is vital in detecting problems at an early stage. “It also helps avoid potential disputes and gaining a better understanding of a tenant’s needs,” he added.
Although it can trace its origins back to 1848, the Vickery Holman brand name was created in 1990 with the merger of two South West chartered surveying practices. Since then it has established three offices in Truro, Plymouth and Exeter.
The firm has recently commenced marketing a prominent unit located just off the Chiverton Roundabout between the A30 and A390. The property provides 2,396 sq ft of flexible space and is being marketed at an asking rent of £17,500 per anum, with allocated parking on site.
Vickery Holman’s Neil Stubbs said: “This is an excellent and rare opportunity for a tenant looking for flexible premises in close proximity to the A30.
For further information or to arrange a viewing, please contact Neil on 01872 245600.
Story: Cliff Goodwin
Photos: Top – Bigstock. Above – Vickery Holman
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