One of the most important decisions you’ll make as a landlord is whether to manage your property yourself or get a letting agent to deal with your tenants and any issues relating to your property. For many landlords with only one property, the main consideration is the cost of property management, however as investors add more properties to their portfolio they quickly realise that the real cost to them is their time. There are several advantages and disadvantages for each option and to help you to decide which option is right for you and your property we’ve put together a guide, for you to discover what you can expect from each option.
The advantages of being a DIY Property Manager
When you manage your own property you retain 100% control, and of course it’s the cheaper option as there are no payments for management fees to a letting agent. The saving you could make is usually around 10% of your gross rental income, which over the course of a year equates to around a month’s rent.
Self managing allows you to build the necessary skills and expertise, you’ll learn on the job. Additionally, if you enjoy dealing with people of all kinds and taking on simple DIY tasks and repairs and know your limitations as to when to delegate more complex maintenance jobs, then self-managing could be very rewarding for you.
Also, as a landlord you will be highly incentivised to manage your property well, but you must consider the disadvantages too.
The disadvantages of being a DIY Property Manager
Going down the DIY route does have its challenges, otherwise everyone would be doing it! First of all, it can be very time consuming. You may have to spend time chasing late or non payment of rent; this takes time and provides the opportunity for possible conflict with your tenant.
Even more importantly, inexperienced landlords can run into problems if they are not up to speed with the legislation pertaining to tenants’ rights and landlord responsibilities – this can mean that you could inadvertently break the law, which could come at a high price if legal action is taken against you. Knowing the relevant laws is of utmost importance and a good property manager will protect you from such problems as they will be constantly monitoring the legal side of things for you. They’ll be aware of any new rules and laws before they come into play and will inform you of any changes you need to make in order to stay on the right side of the legal fence.
If you’re managing your property yourself, you also have to make yourself available 24/7 in case of any emergencies, and ensure that the statutory safety checks are carried out to mitigate the risks of possible major disasters such as a burst pipe, carbon monoxide poisoning due to faulty boilers, gas leaks and possible explosions. And remember that you’re legally obliged to give 24 hours notice to your tenants in writing before visiting the rented property.
The saving you could make by managing your property yourself may appear attractive, but unless you have the time, resources, and capacity to deal with who could be the most infuriating tenants, hiring a professional managing agent is likely to give you a more relaxed life as a buy-to-let property investor.
