What you should consider before deciding whether to hire a property manager
One of the most important decisions you’ll make as a first-time landlord is whether to manage your property yourself or to hire an investment property management company. For many landlords with one property, the main thing they consider is the cost of professional property management.
As investors add more properties to their portfolio, they quickly realise that the real cost to them is time. Managing your own property effectively is a time-consuming process. Managing tenants can drive you to the point of despair.
In this article, you’ll learn about the major pros and cons of being a DIY property manager.
The advantages of being a DIY property manager
When you manage your own property, you retain 100% control. From advertising your property to evicting nightmare tenants, the buck stops firmly on your desk. You get to choose your tenants and manage them as you deem appropriate. Rent is paid directly to you, and not through a third-party account.
The saving you could make on property management fees is usually around 10% of your gross rental income. Over the course of a year, that equates to around one month’s rent.
You’ll also learn a lot as you become more experienced. Sure, you’ll make mistakes in the beginning. Some could be costly. However, you’ll learn about the landlord laws that dictate your responsibilities (see our article ‘178 reasons the law causes buy-to-let landlords such stress’) and eventually be a better landlord and property manager for the experience.
You’ll be highly incentivised to manage your property well. Providing you know your limitations and when to delegate maintenance jobs rather than attempt them yourself, and providing you live near your property, DIY property management might be a good decision for you. But, you must consider the disadvantages, too.
The disadvantages of being a DIY property manager
When you manage your own buy-to-let property, your time is never really your own. Queries and maintenance requests from your tenant require you to not only be available but then to either deal with the issue yourself or spend time organising a maintenance technician to attend to the task.
You’ll also be responsible for chasing rents if your tenant is late paying, and this takes time as well as provides an opportunity for conflict. And, while talking about rents, you are more likely to charge the wrong rent when you go it alone. You’ll pay a property manager a percentage of the rent earned – it’s in their interest to ensure that the rental price keeps pace with the market and that your property is tenanted for as long as possible, with as few costly void periods as possible.
If you are managing your own properties and you have invested in another area, you’ll find it more difficult and time-consuming to keep an eye on your property, build a relationship with your tenant, and arrange repairs. When hiring maintenance technicians, you won’t benefit from the better rates and service levels that investment property management companies usually negotiate.
When it comes to finding and vetting prospective tenants, investment property managers usually have an advantage, too. They will probably have a list of applicants and would-be tenants for your property and will have agents available to show your property to viewers. They will also vet applicants comprehensively, checking their backgrounds, employment history, and credit files. To do the same, you’ll need to take time out of your busy schedule.
Finally, when managing you’re own buy-to-let, you will need to ensure that your tenancy agreement is watertight, up to date, and written in accordance with the latest buy-to-let law. If it isn’t, you could find you have a tenant who won’t pay, and whom you can’t evict.
A neutral, professional, experienced intermediary who saves your valuable time
A top-quality investment property manager will do a great job for you. Among their many duties, they will:
- Help you find good tenants and keep costly void periods to a minimum
- Have relationships with the best maintenance technicians, and leverage their size to keep repair costs as low as possible
- Chase rent if it becomes overdue
- Undertake property inspections to ensure your tenants are keeping to their responsibilities
- Ensure that they use their experience to handle any tenant issues without them causing you sleepless nights
The saving you could make by doing the property management-side of buy-to-let property investment 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 investment property management company is likely to give you a more relaxed life as a buy-to-let property investor.
Call Ezytrac and benefit from effortless property management at +44 0 1522 503 717 and benefit from being a property investor, not a tenant’s lapdog.
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