If you’re not sure whether to self-manage or put a lettings agent in charge of your property, here are the factors to consider:
How much time do you have? And how do you value your time? It takes Swift around eight hours of work to find tenants, another two to four hours per month to manage a property, plus five or so to end a tenancy – and that’s with all the systems in place.
Over a year-long rental at £1,000 a month, a 10% fee equates to £25 an hour – and if any problems arise, it becomes even cheaper. Unless you earn less than that, live nearby and have the time and energy to deal with boilers, bedbugs and break clauses, a good agent is a bargain.
Own a ‘low-maintenance’ new build? Even with no repairs, there will still be admin and contractual issues. No matter how trouble-free you think your property might be, managing it well always takes time and focus.
» Too busy for the bother
Despite living near their rental flat in central London, Fran and Victor opted to
have it fully managed by an agent. With two young children and busy work
schedules, they factored the extra cost into the rental return to save time and
stay at arms’ length from their tenants.
Usually the main reason why landlords self-manage. You will save a fair bit in agent fees, but remember that these fees are tax deductible from your rental income so the might be less than you think.
» Let-only deal saves a packet on posh rental
Although they were living abroad, John and Lily chose not to use a managing
agent for their upmarket west London family home. Instead, they asked their
parents who lived nearby to ensure any maintenance was done to the right
standard. As the rent was high, this saved them a lot in management
commission. They also negotiated a good lettings-only deal with their local
Arms’ length or up close?
Doing viewings yourself could help you find a better tenant: unspoken clues when meeting them in person tell you much more than a paper reference. You can also build rapport, which will help you get the best out of tenant.
On the other hand, a skilled agent could get a higher rent and defuse any disputes because they’re at arms’ length. You also might want to keep your details private. Plus, you won’t field the call about the broken boiler or leaking roof on Christmas Eve (as we have), nor will you have to deal with tenants who bother you with non-emergencies at 11pm (like the one who locked herself out, called in a panic to beg for keys, then got in – but failed to update the agent who had travelled an hour to her aid).
No one knows your property as well as you do. Looking after it yourself lets you see maintenance issues first-hand, so you can make the right choices and use your own preferred tradesmen.
Are you forever fixing things? Do you love leaping into action to solve a tenant crisis? If that’s you, you might enjoy self-managing even if it makes little sense financially. Equally, if you’re the hands-off type who hires a handyman to oil a squeaky door, it won’t be for you.
Precision (and patience)
It’s not particularly complicated to let and manage your property yourself. However, there are lots and lots of annoying little boxes to tick. (Hey, we’ve filled a book with them.) The consequences of getting it wrong can be serious. If attention to detail is not one of your strengths, you might be better off getting an agent who knows their stuff to do it for you.
Your situation could of course change – perhaps you’ll grow to have less time and more money. The right decision now might not be the right decision in five years. Whatever you decide, don’t underestimate how much time and effort it takes to manage well.