What is the real cost of being a DIY landlord?

Do you know what an investment property manager could give you?

When you invest in buy-to-let property, one of the key decisions you will need to make is whether to manage the property yourself or pay an investment property manager to do it for you. By self-managing the property, you will save on property management fees. But are these savings worth the time and effort you will spend on being a DIY landlord? And do you have the knowledge, skills, and ability to be a successful DIY landlord?

Key skills you need as a DIY landlord

As a DIY landlord, you will need to consider and control all aspects of the daily tasks of property management. This starts with marketing your property, conducting viewings, negotiating rental prices, and vetting applicants. But your tasks don’t stop there. You’ll need to ensure that you make and maintain property inventories, and you’ll need to make regular visits to the property at times that are convenient to the tenant. So, you need to be:

• A good marketer
• Good at negotiating on price
• Detail oriented to ensure that you conduct thorough background checks
• Good on the phone

You also need to be tough. Of course, you must be a people person to maintain tenant relationships and avoid conflict. However, you can’t be a doormat. If you find it hard to say no, or to be assertive without being argumentative, you may find it difficult to keep tenants beyond the end of their first tenancy agreement. So, you must be friendly, but professional; assertive, but not argumentative.

DIY landlord responsibilities you may not have considered

Your responsibilities don’t stop when you’ve found the right tenant. In fact, your responsibilities as a DIY landlord don’t stop period. Here are a few other responsibilities that you must attend to as a DIY landlord:

1. Ensure that your tenancy agreement is aligned with current landlord laws, and protects you and the tenant. (You’ll need a solicitor to help you.)
2. Find good contractors to carry out maintenance work, and ensure that any work is carried out properly and cost-effectively.
3. Organise annual gas safety checks.
4. Carry out check-ins and check-outs with tenants, and agree against the property inventory.
5. Arrange Energy Performance Certificates.
6. Conduct regular property inspections, and check against the property inventory.
7. Check and lodge meter readings at tenancy start and end.
8. Arrange to test the electrical equipment.
9. Ensure your landlord insurance is sufficient and up to date.
10. Conduct annual rent reviews.
11. Collect rent.
12. Chase late rental payments.
13. Pursue rental guarantors of tenants who won’t pay.
14. Serve Section 8 notices to tenants in arrears.
15. Evict tenants in accordance with the law.
16. Be available 24/7 to field emergency calls from tenants.
17. Notify local authorities of any change of tenants.
18. Make service and ground rent payments.
19. Keep all paperwork to ensure timely and accurate submission of tax returns.
20. Carry out annual rent reviews and ensure that the rent you charge is in line with the local market.
21. Keep on top of all landlord laws – being ignorant of the law won’t stop a landlord being fined up to thousands of pounds for breaking buy-to-let regulations.

Do you have the time to commit as a DIY landlord?

The list above isn’t a complete list of all your responsibilities as a DIY landlord, but it does give you an idea of how much time you are likely to spend on being a landlord. You may not have the skillset to be a good DIY landlord. Most of our landlord clients hire us because they are simply fed up of the time they spend collecting rent, fielding phone calls from tenants, listening to excuses for late rental payments, visiting their properties, assessing maintenance requirements, arranging for maintenance to be carried out, checking on maintenance, and so on. If you spend, say, an average of two hours per week on your landlord responsibilities, this will cost you more than 100 hours per year. That’s equivalent of an extra 2½ weeks of full-time work. How much could you earn if you simply did an extra two hours of work each week, instead of committing it to managing the day-to-day responsibilities of your investment property? Work that number out, using your overtime rate. Now ask yourself:

• Do you have the skills and abilities to do a great job as a DIY landlord?
• Do you have the time to commit to being a DIY landlord?
• Are you prepared to be on call 24/7 for tenants?
• Would you stay calm as a tenant explained that they can’t change a lightbulb?

If the answer is no to one or more of these questions, then you should ask yourself if it would be better to employ the services of a professional investment property manager. And if you’re concerned about the cost (which is probably a lot less than you think), simply measure it against the amount of money you could earn in overtime instead, and the amount of aggravation you could save yourself. As investment property managers, we give our landlord clients the benefit of our skills, knowledge, and experience. Perhaps most importantly, we give them back their time. So, when deciding on whether to be a DIY landlord or to hire an investment property manager, ask yourself how much you value your time. Then call one of the Ezytrac team on +44  01522  503  717 to discuss your requirements. Live with passion, Brett Alegre-Wood