Starting out as a self-managed landlord can be difficult especially with the raft of changing legislation on the horizon. Our latest guest blog, from the online letting agent, Upad explores the most important areas to consider before self-managing your property.
The idea of being a self-managing landlord can be daunting. Won’t a high-street agent know more? Can you keep on top of all the laws and regulations? Do you have time to manage a property? But if you’re prepared to take control and get clued up, the savings can be huge- something which is more important than ever with recent tax changes. These are the most important areas to consider before self-managing;
Even with the most perfect tenants, maintenance issues will arise during the course of a tenancy. You’ll also need to advertise your property, screen tenants and arrange the paperwork so if you’re already juggling a full-time job, family and social life you may find self-management is not the right thing for you. But if you are able to work flexible hours or use evenings and weekends to deal with maintenance and admin work, you’ll save a packet compared to paying a high-street agent to do this for you. Cut down on the amount of time you spend on property viewings by scheduling block viewings- where applicants are invited to view the property in a given timeframe.
Although it’s impossible to know what issues may occur, you’ll inevitably experience the most common at one time or another. Firstly, ensure you’ve carried out basic maintenance before a tenancy even begins to avoid bigger problems later on. It might seem more cost-effective to keep that 10-year-old boiler that’s still ticking along, but a breakdown later on will land you with a huge bill. Keep a list of reliable tradespeople in your area so that when problems do occur, it’s a quick phone call to get it resolved. Make sure to have numbers for a few electricians, plumbers, builders and handymen/women in case one is unavailable and you need work carrying out quickly. The best way to find reliable tradespeople is to search on the websites of trade associations such as Gas Safe for registered heating engineers, NICEIC for electricians and APHC for approved plumbers.
If you live a fair distance from the property, you may think it would be impossible to self-manage. However, the majority of maintenance issues can be resolved with a quick phone call or an online instruction- most agents don’t even visit the property when an issue is reported. If you live abroad, it may be more difficult to manage particularly if there is a major time difference but still not impossible. Keep in regular contact with your tenant to ensure that issues are reported promptly and don’t turn into an emergency.
Although Upad research shows 92% of tenants want to meet their landlord, you may feel nervous about the prospect of dealing with a tenant firsthand. You may also prefer the hands-off approach to letting a property and want an agent to communicate with the tenant rather than you, in which case self-management is not for you. But if you can maintain a friendly yet professional relationship with your tenant and be available to answer calls and emails, the savings are huge.
Ideally, you should visit your rental property every 3-6 months to ensure it’s being looked after and that any issues are addressed. Remember, you’ll need to give at least 24 hours’ written notice to your tenant beforehand. If you live a distance from the property or don’t have time, regular inspections may be difficult. However, you could ask trusted friends, family or neighbours nearby to the property to inspect for you.
Laws and regulations
There are 100’s of laws and regulations that govern the lettings industry, but you need not feel overwhelmed. There are just as many resources available to guide you through and keep up-to-date. Consider joining a landlord association such as the NLA, where you can become accredited with their courses, and use Upad’s free resources such as guides, webinars and blog posts. The main areas you need to be aware of are legally compliant tenancy agreements, access to the property, eviction notices, deposit protection and gas safety. Also, speak to other landlords to get their advice on how to successfully manage a property.
Another key area is record-keeping. In the event of a dispute with your tenant, this is going to be very important as the burden of proof is always with the landlord. Make sure to carry out all required checks on tenants before they move in, such as referencing and Right to Rent, and keep those records safe. You’ll also need a thorough inventory check-in report to safeguard against damages to the property, which will be your evidence if you wish to make deductions from the tenant’s deposit. Also consider legal requirements such as gas safety certificate, EPC, How to Rent guide, smoke and CO alarms and deposit protection. As a private landlord, you’ll also need to complete a self-assessment tax return so any expenses incurred in the course of your business for repairs, advertising, travelling, paperwork, maintenance will need to be detailed along with receipts.
Self-managing is not for everyone, it can be time-consuming and stressful or perhaps you prefer to have a more passive income and allow an agent to take care of the day-to-day. However, if you’re prepared to put in a little extra time and effort then the cost saving can be huge. With landlord’s profits being targeted by new legislation, now is the time for landlords to start looking at where they can make savings.
For more expert advice tune into Hamilton Fraser’s Landlords, Lettings and Deposits podcasts hosted by Hamilton Fraser CEO, Eddie Hooker, Brand Ambassador Paul Shamplina and featuring special industry guests. Listen here.