Letting agents and property managers can help you manage your property when you don’t have the time, skill or desire to do it yourself – all for a management fee. But are their services really worth it?
It depends. Two of my investment properties are managed by letting agents, whilst my husband and I look after the third property. As I’ve experienced both the pros and cons of a hiring a professional, below are the key lessons learnt to help you make a decision.
Why hire a letting agent or property manager?
The benefit of having a letting agent or property manager is that they act as a barrier between you and the tenant(s).
And the agent or manager deals with the property management tasks, such as rent collection, inventory control, inspections, repairs, tenant complaints, and much more.
This means you have less landlord responsibilities and more anonymity as the tenant cannot personally hassle you. If you’re a high stress person, hiring a professional should give you more peace of mind.
Downside of hiring a letting agent or property manager
Letting agents and property managers will still ask you how you want an issue fixed, and charge you a monthly management fee. This fee is either a set amount or a percentage of your rental income.
This fee may seem too high, particularly if you have cash flow problems – meaning you are making a monthly rental income loss or breaking even.
Should you manage a property yourself?
There are two instances where I think you could look after your own investment property, if this is the path you decide to take.
The first instance is if you live close to your property, preferably within walking distance. As travel is not an issue, it would be less inconvenient to inspect property issues around your work hours.
The second instance is if your property has been newly renovated as, theoretically, there should be minimal repairs required for one or two years.
There are also an abundance of online resources where you can: download a contract template; advertise for new tenants; perform credit checks; etc.
Additionally, refer to the council or landlord association websites for information on tenancy legislations, such as housing licenses; fire and gas safety certificates; lodging bonds, and so forth.
If you choose to manage your own property, then have a local builder or handyman to contact so problems can be resolved quickly.
A reckless driver drove into the wall of the investment property we look after. We were overseas and did not have a property manager to help us. However, we successfully coordinated the repairs and insurance process from abroad due to the good relationship we have with a local builder.
Use the expertise of property managers to fill your skills gap
Despite managing one of my own properties, I still prefer hiring a letting agent or property manager. (Please note, I do not work in this industry and am not endorsing any businesses).
As referenced from a previous post, I stated:
As an investor with multiple properties, it makes logical sense to have an experienced letting agent or property manager as part of my team.
I work full time and simply don’t have enough time to deal with property management. So why not work with a trained professional to fill in this skills gap?
It’s like running a company: a CEO does not have all the technical skills to run each company department.
What the CEO does is hire managers to run each department. The CEO works very closely with each departmental manager to gain an overall understanding of how the business operates, and then uses this insight to devise a strategy on how the business should grow.
The same theory can be applied to property management. Use the expertise of professionals to fill your skills gap. By having a strong team working with you, you will be in a better position to grow your property portfolio.
Many letting agents and property managers offer partial letting packages, which cover a specific function you may not want to deal with. For example, though we look after our third property, we paid a letting agent to find tenants on our behalf because we didn’t have time to conduct interviews and house viewings.
And lastly, remember it’s also OK to change your letting agent or property manager if you are dissatisfied with their service.
Please note, though I own a few properties, I am not a legal, financial or professional property expert. I’ve written this post to share my personal experiences and would love to hear your opinions and views.
So, what are opinions on this topic?
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