12%. It’s a small enough figure, but it can pose plenty of questions for landlords. After all, this is the typical commission that an agent will require if you decide to outsource the day-to-day running of a rental property.
So, which option should you choose? Should you manage things yourself or give the aggravation to someone else? We will mull over some of the key questions to pose through today’s article.
Does your current yield allow for further fees?
Between the recent changes in the tax laws, plus standard fees such as landlord insurance, and even the cost of repairs, life in the property game can get expensive.
Sure, there are some so-called “easy properties”, but on the whole, the majority incur costs that will eat into your yield.
We touched upon the fact that 12% feels like a small figure in many circles, but for some landlords, it can be too much.
If you happen to be in an older property riddled with annual repairs, this might apply to you. This is where you need to sit down, calculate your true yield (subtracting ALL of your expenses, not just the mortgage payment) and go from there.
How much of your time are you willing to sacrifice?
We all know that being a landlord takes up a lot of time. It’s not a 9-5 job; it’s more like a 24/7 job.
You need to be on-call for your tenants, you need to be able to sort out issues as and when they arise, and you need to be proactive in your approach to maintenance and repairs. You also need to keep on top of the ever-changing legislation. The simple fact is that the more properties you have, the more time you will need to dedicate to the role.
Of course, all of the above is true if you’re taking on the DIY approach. If you’re doing this full-time, perhaps with a portfolio of properties, the DIY approach might be something you consider to maximise your earnings. If you’re in the opposite situation, seriously consider if you can dedicate these hours towards what is essentially a business.
What’s your experience like?
If you’re a first-time landlord, then the chances are that you don’t have a great deal of experience.
And while there’s nothing wrong with that, it does mean that you might want to consider using an agent. Who do you contact for repairs? Are tenants truly being unreasonable, or is this the norm?
Agents will be able to guide you through the process, offer advice when needed, and generally make your life a lot easier.
Are you comfortable with the day-to-day running of a property?
This is a question that only you can answer.
Do you feel comfortable dealing with tenants? Do you feel comfortable chasing rent? Do you feel comfortable dealing with repairs?
If the answer to any of these questions is “no”, you might consider using an agent. Even if you “might” feel comfortable – just remember that these enquiries can come at any hour of the day. Are you in a position to deal with them whatever the hour?