9 questions all buy-to-let investors must ask themselves
For buy-to-let investors, one of the most important decisions to make is whether you should employ an investment property manager. If you are undecided, then these nine questions will help you make the right decision.
1. Do I have the time to manage my buy-to-let property?
If like many buy-to-let landlords, you have a full-time job, then this will be the most important consideration for you. Time is money, and the time you spend performing the obligations of a buy-to-let landlord could be expensive. Taking care of your landlord duties might mean missing out on family time, or that you must turn down valuable overtime at work.
Hiring an investment property manager will let you relax during your spare time, and allows you to be available for overtime if your boss offers it.
2. Is my investment property near my home?
The further the distance between your investment property and your home, the more difficult it is to self-manage. If you live in the South of England and own buy-to-let property in the North, there are a lot of miles to cover should something go wrong.
It is not only when things go wrong that makes distance a difficulty. It will be more difficult to find good tenants, meet with them, conduct property viewings, collect rent, and carry out property inspections.
The time it takes to travel and the cost of doing so adds up. Hiring an investment property manager makes a lot of sense if there is a lot of distance between your home and your buy-to-let property.
3. How many buy-to-let properties do I own?
The more properties you own, the more responsibility you have. There are likely to be more maintenance issues, more tenant complaints to handle, and more void periods to deal with. If your properties are spread geographically, this will add an extra burden.
4. Am I a good tenant manager?
It is imperative that you develop a good landlord/tenant relationship. This can be difficult if you aren’t good at dealing with irate tenants, who are bound to contact you when it is most inconvenient to demand that you deal with a dripping tap (or similar).
Investment property managers are trained to deal with difficult tenants, and they have the back-up team to deal with maintenance needs and tenant complaints. They know the landlord laws and act as a buffer between the tenant and the landlord.
5. Do I suffer from a high void period rate or poor cash flow?
If you suffer from frequent or long void periods, it’s probably because you aren’t attracting the right tenants. You must market your property effectively and vet tenants properly.
Cash flow issues can quickly mount if you have a maintenance issue to deal with. Repairs must be made in a timely manner. If you don’t have a network of maintenance people working for you – as investment property managers do – you could end up paying through the nose for repairs to be made. This will have a negative effect on your cash flow.
6. Do I want to be an employer?
You may need to negotiate maintenance contracts, and, if you grow your portfolio, you may decide to hire a team to manage your properties for you. This will put you in the position of being an employer, with all the responsibilities of running payroll, dealing with HR issues, paying employer and employee taxes, and so on. Do you want to do this?
7. Do I have the experience to manage my properties?
Inexperienced landlords are most likely to make costly mistakes when managing their own properties. If you don’t know the landlord laws, hire the wrong maintenance people, carry out ineffective tenant vetting, and a whole host of other potential pitfalls, your profits are likely to disappear very quickly. Hiring a good investment property manager removes your inexperience as a negative actor.
8. Am I happy to give up control?
Your investment property manager can look after everything for you, from marketing your property, through the lifetime of a tenancy, to evictions, maintenance, collecting rent, etc. Are you happy to relinquish this level of control?
9. Can I afford an investment property manager?
Property managers charge a fee, based on the rental income of the property. You’ll need to assess whether your cash flow is strong enough to pay these fees.
To discuss our investment property management fee structure, the advantages of using Ezytrac, and how your cash flow and lifestyle could benefit, give us a call at +44 0 1522 503 717 or send us an email.
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