Sunday 14 April 2024

Self-manage or hire a letting agent – what’s best for you?

One of the biggest decisions you’re likely to make as a landlord is whether you manage your properties yourself, or use a letting agent. There are pros and cons to both sides.

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Doing it yourself

Running your property rentals yourself should be treated like running a business. You’ll need to understand your legal responsibilities and obligations, as well as the rights and responsibilities of the tenants. Fortunately, there are plenty of resources available to help the novice landlord get up and running.

Getting opinions from two or three letting agents about your property value and local market demands will prove invaluable and knowing your target market will help with advertising your property.

The Landlords Association provides essential resources and guidance, which, if you’re new to the business, is well worth the membership fee. Also, consider specialized property inventory software from vendors such as inventory base is available to help landlords with the smooth running of their tenancies.

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Self-managing is a big responsibility, but if you prefer meeting the tenants, drawing up contracts and doing your own inventory checks, rather than leaving it to an agent who doesn’t have the same vested interest as you, then it will suit you. With it, however, comes the inevitable paperwork – forms, certificates, maintenance, tax returns and so on, so it is important to balance the pros and cons carefully before choosing to self-manage.

Using a letting agent

Letting agents provide two levels of service – full management, or let-only. A let-only service means that the letting agent will find tenants for the property, but the rest of the management is left to you. The full management service will take on the vast majority of the responsibility of managing the tenancy, and a lot of the time, too.

Allowing an agent to take the strain comes at a price, however. A typical let the only fee would be a one-off calculation based on a multiple of the rent charged plus VAT. Ongoing management fees would be commission-based and would be calculated as a percentage of the rent paid throughout the tenancy, for example, between 10 and 15% of the rent each month.

However, if you cannot dedicate the time or are not comfortable with the responsibilities of self-management, the fees may be well worth the peace of mind.