Deciding to become a landlord is easy, deciding how to manage property’s is the difficult part. Until a tenant is in a property, then a landlord can’t make money.
Those that see their job role as a ‘landlord’ will have no hesitation in spending time managing their property. Although, those who see themselves as an ‘investor’ rather than a landlord may see self-managing a property as being too time consuming.
But which is the best method for any landlord to manage their property?
This article intends to look through different types of property management to help you decide which may be the correct method for you.
For landlords that want to be more so hands on with their properties, then self-management is probably the best option for them. However, for those that value their spare time then using a letting agency is the choice for their situation.
To manage a property well, landlord must be able to effectively do the following:
- Know how to communicate with their tenants
- Be able to arrange non-emergency maintenance issues
- Deal efficiently with emergencies within a property (for example a plumbing problem)
- Continuing to inspect the maintenance of a property
- Dealing with problems to do with a tenant (such as a tenant not paying rent)
Some landlords may be lucky and have properties that are well kept by their tenants and have tenants that are unproblematic. Although, unlucky landlords may have issues to deal with on a weekly basis.
As you can tell by the bullet points, there are lots of tasks involved with being a self-managed landlord. This can be off putting. However, most choose to use the self-management route due to the attribute of cost savings.
No matter the type of management style a landlord chooses, they should always make routine checks on their property to make sure everything is in order.
There is no doubt that for some people, this is the right method for them. It can be seen as the more costly route, but on the other hand, for landlord it can help free time around their already busy schedules.
There are two different type of management under a letting agency. The first is “let only” and the other being “full management”
This service allows the letting agent to only do a certain amount of jobs for a landlord. This includes:
- Marketing the property
- Finding the tenant and delivering viewings of the property
- Creating tenancy agreements
- Providing checks on potential tenants
- Helping the tenants to move in
Usually through this service, agencies charge around 5-8% of the annual rent and a one-off fee at the start (usually around £250-£600).
This type of management says what it does in the name. Then agency will be in charge of covering everything to do with a tenant. This includes them covering the following:
- Arranging any maintenance
- Handling increases in rent, renewals, etc
- Collecting rent and dealing with any overdue payments
- Legal obligations over the property such as gas certificates
- Inspecting the property on a regular basis
With such service comes a price. Usually, with a full management service, an agency will charge around 7%-15%. On top of this, they may also charge your tenants separately or absorb this into a management fee.
“Which style should I choose?”
Overall, it is definitely down to preference. It depends on budgets and how much time as a landlord you have set aside to deal with a property and tenants.
There is no right or wrong, it is all down to the type of landlord you are and which method would work best for you.
I started writing for PPO back in August 2019. I particularly enjoy writing about new housing developments and upcoming property events.