When To Self-Manage And When To Use A Letting Agent?
Nowadays, more people are turning to DIY or “Do it Yourself” to save on costs. When it comes to real estate, you also have an option to self-manage your property.
Of course, like all businesses, you have to go through a steep learning curve and property management is no different. Brace yourself, though. The learning curve in real estate can be pretty steep.
DIY property management means you have to learn about real property laws and taxes, marketing, finance and accounting, and even social communication. There could be a good side to that – you’ll be forced to study and widen your knowledge and, yes, save on costs.
But on the bad side, while you give yourself time to learn, your property will sit there idle and vacant as bills pile up.
Your other option is to hire a letting agent. You might say it could be too costly for you to pay monthly professional fees. Still, you have to think about the actual cost of letting your property stay unused and incur losses. Indeed, the benefits far outweigh the costs of having a letting agent.
A letting agent will use his or her specialised skills in property management to make sure your property is well maintained, is ready for listing and never sits idle or vacant. Specifically, the letting agent will:
- Find you a suitable tenant quickly and professionally
- Personally oversee all work at the property, and ensuring all certificates and property insurance are complete
- Deal with paperwork, especially the tenancy agreement and other formalities including lodging the deposit.
To further help you decide on whether it’s better for you to self-manage or hire a letting agent, here is a list of pros and cons for each option.
Self-managing your property:
PROS | CONS |
|---|---|
With hands-on management, you avoid the psychological burden of trusting a stranger to manage your property | It will take a lot of time and effort to learn the ins and outs of letting; |
Arranging all paper works yourself will speed up the process as it will avoid technical or legal concerns about representation | Making a mistake can be too costly. In worst cases, you could end up with a lawsuit or legal issues |
You familiarise yourself with every nook and cranny of your property, and will thus be on the lookout for structural issues such as the age of pipes and electrical wirings, and quality of building materials | Listing a property and actually ending up with a good rental deal can be cumbersome and risky |
You will get to love and value your property more! | You risk getting a bad deal or finding an irresponsible tenant |
Landlords and tenants can mutually agree to end a fixed-term contract early, but these special conditions must be attached and put into writing, and of course, signed by both parties. The key is mutual consent. If one side doesn’t agree, they can always take it to Tenancy Tribunal to get things sorted.
If the landlord incurs fees, such as advertising for new tenants, due to the fixed term contract ending early, the landlord can bill the tenant. All fees should be reasonable and should state the actual cost of the service.
Hiring a letting agent:
PROS | CONS |
|---|---|
Trusted and tested professional with a proven network in the field of letting | A monthly fee for professional services |
Have proven knowledge about what is in demand and how to market your property with the appropriate market rental value | |
Knows the law and will guide you through the process as well as if necessary representing your property and adhering to your legal obligations | |
Will free you from stress and headaches that can be expected from he business of property rental and management |
In the end, it will be up to you to decide whether you’d prefer to self-manage than hire professionals to help you. But, as they say, when you’re in real estate, it better to err on the side of caution.
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