Another hot topic today - whether or not to get involved with management yourself...
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Summary:
1. Are you letting by the room or are you letting as a whole? Generally letting by the room is much harder work, you're dealing with an infinitely higher number of variables and you have upteen times the work. Every time someone leaves you need to re-advertise for new tenants, go through the rigmarole of vetting and referencing and then by the time they move in the next person wants to move out. With a single let the tenancy term is anything from 6-36 months, but most people will sign up for a year and stay about two. ARLA reported significant increases in tenancy lengths over the last few years, so the trend for people that are living together to stay together longer is increasing. This is naturally a less prevalent trend with room lets because there is generally no baggage to tie them down.
2. How far away do you live from the property? Now this is a key one. I actually have all my properties in South London yet it still takes me an hour to get to most of them, believe it or not! So viewing most of them with prospective tenants is absolutely out of the question for me. There's no way, me as a private landlord, can drum up enough people to make a successful block viewing happen (where everyone turns up simultaneously and you hope to create a bidding frenzy). I outsource this to my agency team. However if it's next door that's a different matter. Travel time is a big one to take into consideration therefore; not just with viewings but also inspections and more hands-on things like overseeing repairs and so forth.
3. How skilled are you? Generally people that self-manage fall into two categories: the landlord that's been letting the same flat for 20 years, probably let it 10-15 times and think they know everything, despite still using the same tenancy agreement from when they started, never heard of deposit regulations, right to rent or "How to Rent" booklets.... OR the landlord that keeps up with the latest legislation and knows everything inside out. Sadly the latter is in very short supply. If you are thinking of self-managing and you don't know what any of those things are that I just mentioned you best get googling, or better yet book yourself on a landlord course with the NLA or RLA (email me for a discount code).
4. Cost: are you making any money on your buy to let property? My argument is very simple: if you cannot afford to use an agent then you are not making enough money from your buy to let property. You should really be getting a healthy enough return to employ someone to do at the very least the tenant find and then have a healthy cash flow of at least £500 per month (London figures) to allow for repairs, replacements and updates over the years. I would say a yield of any less 5% is danger territory, unless you have others to offset this poor yield. A well-diversified portfolio is key, mix up period properties and ex-local authority for a good mix, but I would strive for cash flow really to weather any downturn in capital values; the tenant type in ex-local authority properties are generally more plentiful and rental demand will increase in an economic downturn.
So in summary, it's time vs money. If you live next door, you know what you're doing and you're willing to do it then by all means. Living further way adds in travel, and although even single lets can be very easy, it only takes one spate of repairs to have you clocking up the hours in the car quite rapidly! If you like this video please like, comment and share and join the Clapham Property Blog community on Facebook, LinkedIn and Youtube. If you prefer old fashioned email just drop me a line or come and meet me in person at the Clapham Property Meet!
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