There are several reasons why people start actively investing in buy-to-let property. Most often, would-be landlords are looking to generate a long term income that will supplement or replace their existing salary and retirement income.
The most successful landlords, however, treat building a portfolio of appreciating buy-to-let assets as a business opportunity (and rightly so) and manage the daily aspects of tenanting and property management themselves, instead of using a letting agent.
According to a study by Spareroom.co.uk earlier this year, 87% of tenants prefer to deal directly with a landlord rather than a letting agent. This is partly due to the cost of letting agent fees, but also because of the ability to build personal relationships with private landlords.
This begs the question - how can landlords keep their tenants happy while freeing up more of their own time? One alternative is to consider hiring the help of a property manager over a letting agent. This way, you can not only avoid hefty management fees by setting your own competitive rates of pay, but you can pick the right person for you, and more importantly, your brand.
All that said, you should ask yourself these three important questions to determine whether you are in fact ready for a property manager, mentally and financially.
Can you afford to hire a property manager?
If you've been running your buy-to-let portfolio effectively as a business, then you should be able to accurately assess your financial returns and work out whether you can afford the additional expense of hired help - and is this money you want to part with in return for some freedom?
In order to do this, you'll also need to evaluate how much time you actually spend on managing the portfolio yourself to determine how many hours a week a property and lettings manager will need to work. A good way to do this is to track your activity over a short period.
Are you prepared to hand over control?
After running things your own way for what has probably been as least a couple of years, you might find it hard to hand over control.
Property managers can be taken on to relieve you of 100% of your property business, which could involve them having access to bank accounts and personal records, or they could start off by taking over certain aspects such as finding tenants and conducting viewings.
You should therefore establish what you feel comfortable with and perhaps try hiring someone for some of the work to see how you feel.
Do you want to manage staff?
Hiring a property manager comes with a long list of responsibilities. Even if you are used to managing staff from current or previous roles, are you ready to hire, fire, discipline and praise again? You'll need to consider what you pay them and how, what training you will give and when and establish performance targets. Also, will the property manager be self-employed or employed? The latter will make you vulnerable to a whole host of additional regulations.
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The decision to hire a property and lettings manager can be a tough one, but by carefully considering the impact on you as a landlord and your portfolio, you'll be able to make the right decision.
