The world of buy-to-let is constantly evolving, and with new tax changes set to come into force from April this year, as well as the surprise ban on letting agent fees, more and more landlords could begin to feel the pinch in the coming months.
With this in mind, many landlords may be choosing to forego the services of an agent and self-manage in order to save on money. Over 14% of the average landlord’s expenditure is spent on management and letting fee costs, amounting to nearly £3000 per year.
Of course, the obvious disadvantage of self-management is that you will take on a number of responsibilities that you might otherwise have deferred to your agent, such as handling tenant complaints, taking maintenance calls, or chasing late payments of rent.
However, despite the stresses of these more hands-on aspects of property management, there are also many benefits too. Current NLA research shows that nearly half (43%) of landlords do not employ the services of a letting agent, so clearly self-management works well for a wide variety of people. If you’re considering whether a move to self-management is right for you, read on…
Consider whether you can fully commit to managing a property yourself as it requires a lot of time and effort. A professional letting agent can be very useful if you live far from the property and can’t easily manage problems or issues that may arise. They also act as useful intermediary when dealing with difficult situations or tenants. If you work full-time then self-management may not be right for you.
The knowledge and skills needed to be a landlord are considerable and it is important that you’re aware of the law and your responsibilities. For example, if you plan to let to multiple occupants or shared accommodation such as student housing you may require a licence from your local council.
Your tenant’s safety is paramount so you’ll need to keep on top of things such as gas safety checks. Ignorance is not an excuse, and neglecting something that can cause injury or death to your tenants will send the uninformed landlord to jail.
Finding a good tenant is arguably the most important ingredient for successful and sustainable tenancies and there are a number of referencing services available to help you in this regard.
If available, you’ll also want to check any previous landlord references as these can provide useful insight into things a standard reference won’t be able to assess, such as living habits or behaviour.
Treat it like a business
A rental property is a business and, like any other type of business, the key to survival is maintaining a healthy cash flow. You must have a degree of business acumen or brush up on your basic business knowledge and it’s important to have a plan in place before going it alone.
Make sure you join a trade association such as the NLA which will provide you with the guidance, support and resources you will need to stay on top of your responsibilities, keep up-to-date with legislation, and assist you in your development as a professional landlord offering the very best service for your tenants.
Find out more about the NLA and how to become a member here.
For the latest in letting agent news, please visit the UK Association of Letting Agents (UKALA) Blog.