Villas & Vacations - in the AlgarveVilla Club Ltd

Sociedade de Mediacao Imobiliaria Lda (AMI 715)
Benefits of Property Management
Would you leave your most valuable assets unattended by the side of the road? Of course not! Yet that's exactly what many property owners do in the Algarve. Don't leave things to chance, look after your most valuable investments properly...

How should I look after my property in my absence?

This apparently simple question gives rise to a great diversity of answers. Generally, owners choose one of the following methods:

The "Lock it and leave it" owner. Can work for a small apartment, especially if this on a development where there is access to maintenance and security services. However simply "abandoning" your property in this way is risky (click here to find out why).

The "Trusted Friend" management service. The owner asks a local neighbour or friend to look after their property. This technique can be reliable and cheap. However, the arrangement often ends in tears when put under any serious pressure. The result can sometimes even end a previously good relationship.

The "One Man Band" management service. The experienced safe pair of hands to which you entrust your property is often worth paying a commercial fee. However, the small size of this type of property agent often brings problems in itself. There is a greater chance of their services lapsing if they fall ill, go on holiday, or even decide to move on. If they are successful they can sometimes expand until their service levels decline. Many of these small One Man Bands also work outside the official system and this can give rise to problems when the tax man starts showing an interest.

Larger Managing Agents with a Proper Office. This is usually the most reliable long-term method of managing your property. A greater number of staff are available to deal with your property, arrange for improvement works and repairs to be done and generally resolve problems. There is better continuity of service even if some staff are ill or absent. The costs of this service can be greater than the previously discussed options, however, this is often simply the result of employing staff who are officially paying tax and social security. Unofficial labour is always less expensive, and this applies all over the world.
Using a larger Managing Agent can also provide more convenient access to other property services including tax returns, property sales, rentals, upgrading etc.

We at Villas & Vacations recommend the latter type of managing agent - but we would say that, wouldn't we!


What does a Managing Agent Do?

Services can differ to some degree, but the most popular services provided by managing agents are:

Maid Service. The type of maid service you choose will depend on whether you rent your property and how often it is occupied. Increasingly owners are opting for a permanent (all year round) maid service. This arrangment costs more but provides a more reliable service.

Tax Returns. It is becoming important for owners to take their taxation obligations in Portugal seriously. Many owners still consider taxation matters in Portugal to be a largely voluntary affair. This is quite surprising considering the onerous tax regimes from which most owners are domiciled. Luckily most of the best property agents can give you good advice based on your circumstances and at least introduce you to someone who can professionally advise you and, where necessary, complete your tax returns.

Maintenance Services. All managing agents will assist you in maintaining your property. The larger agencies have their own maintenance staff who, after a while, will become familiar with your property and all its quirks. They will usually rectify smaller maintenance tasks and ideally carry out some preventative tasks such as oiling hinges and locks and overhauling shutters. Larger or more specialised jobs are usually sub-contracted out and most agents have a number of trusted contractors who are known to charge fair prices. Many agents will charge a 5% to 20% margin to cover the costs of their own administration and involvement. Arranging the work, providing access to the property, verifying the work has been done, checking and paying the bill are all valuable services the costs of which have to be covered somewhere.

Rental Service. Many managing agents have a property rental service. This often simply involves them passing on the rental availability to tour operators or travel agents abroad. Larger managing agents can operate their own rental services where they deal directly with the public and arrange bookings and collect the rental income on behalf of the owner. In many cases the managing agent operates both systems by offering some weeks at a discount to travel agents and other weeks are sold at full price directly to the public. The commission (usually between 10% to 20% depending on the source of the booking) is deducted from the bookings. The property owner receives the balance. However, it is worth noting there is usually additional expenses for the owner for maid services and electricity and this will further reduce the income.

Property Sales. This can be a useful service for the owner, irrespective as to whether he is interested in selling. Many owners have friends who wish to buy, would like to know current valuations, or would like to keep an eye out for upgrading to a larger or even downgrading to a smaller one. It is therefore useful if your agent is actively involved in the market. The benefit is particularly apparent for those owners who wish to rent while they are waiting to sell. The managing agent can coordinate access to prospective buyers without unduely upsetting the rental clients.

Bill Payment Service. The operation of a bill payment account ensures you have a local means of paying bills as they become due. It is also a convenient way of ensuring you have local funds for the enjoyment of your own visits to your property and a place where you can accummulate your rental income.

Other services can include Key Collection, Food Packs, Car Hire, Insurance etc.


Why is it risky to simply "lock and leave" my property?

It is not just our opinion, it is a fact based on experience. For a second opinion ask any insurance company many of which would automatically charge extra premiums for unoccupied properties. Unoccupied properties are considered higher risk mainly because:

  • They can be attractive to thieves.
  • They can suffer from leaks and floods (esp. from heavy downpours).

However, in addition to the above insurable risks there is another potential problem. Closed and unventilated properties can suffer from terrible mildew and mould on the Algarve. Not only is this damaging, it also leaves a dintinctive and unpleasant odour which can take months to go.

For all these reasons, it is important to have your property regularly checked and aired.