Making the decision to manage your own buy-to-let property or not has huge implications on the experience of being a landlord, and not just in terms of cost…although I admit that is a pretty big factor.
However, there are a few other things to take into account when you’re considering whether or not to employ someone to manage a property on your behalf that will affect how much time and effort you need to put into the process.
If you’re managing the property yourself, it’s your responsibility to sort out a boiler that breaks down in the middle of the night. And that broken lock at the back. And those cracks in the bathroom wall. See where I’m going with this?
Managing a property, especially if it’s getting on a bit, can easily end up becoming a full-time job if your tenants are real sticklers.
The advantage of having someone else manage the property convenience-wise is obvious, but much more pronounced if it isn’t local to you and/or you don’t have much in the way of free time.
Most estate agents have a network of solicitors, contractors etc. who they work with on a regular basis. When a contract needs drawing up or a job needs doing, they just feed it straight over to them. Simple.
If you choose to manage the place yourself, you can certainly build your own network but it will take time and there’s no guarantee that you’ll be getting the best deals.
Still, with reports that some estate agents add fees to contractors’ bills etc., you might actually be better off cutting out the middleman and going right to the source.
In theory, the fact that letting agents deal with so many properties means they should have the art of listing properties, conducting viewings, checkouts and so on down to a T.
While that’s true in the majority of cases, there are horror stories out there about properties that have been left in a terrible state by tenants with no deductions made from their deposit to cover it. This is why finding a top letting agent is so important.
I know, I know, I already mentioned this at the beginning but it still bears repeating. Landlords of fully managed properties can expect to pay anywhere between 7.5 and 15% of their rental income for the privilege.
Provided you’ve accounted for this throughout the process of setting your rent and acquiring a mortgage, that may not be a problem. But if your margins are already tight, these monthly payments could end up making buy-to-let a worse investment than an ISA or doing something else with your money.
The above outlines just a few of the factors you need to take into consideration when trying to decide if you should have someone manage your property or just do it yourself.
Ideally you’ll probably want to give both a try at some point so, if you decide to go with the former initially, make sure you don’t get locked into a long, binding contract that prevents you from taking a crack at doing it on your own further down the line.