Should you use a letting agent?

Should you use a letting agent to manage your buy to let property? This is a question that often crosses many new and experienced landlords’ minds when it comes to the management of a property. In this blog we are going to breakdown the benefits of both using a letting agent and self-managing your properties, and give a recommendation on which option we believe is most suitable for new buy to let investors. 

Using a letting agent.

So let’s start with the benefits of using and working with a letting agent to manage your property. First of all, what does a letting agent actually do? A letting agent’s role can vary massively depending on whether they are an online agent or a local agent and what types of services they offer. However, the majority of agents will offer a service where they advertise your property, find tenants for you and manage the property after the tenants have moved in.

What are the benefits of using a letting agent?

Saved time – This is a huge benefit to using a letting agent, because although you pay for the service, the amount of time that you will save on things such as doing viewings, advertising and carrying out maintenance will be well worth the fee you pay if you choose the correct agent!

Less Headaches – If you manage the property yourself, and give tenants your phone number, it is likely that they may end up calling you at 10pm on a Friday night saying that their light bulb has broken (this happens a lot!) and asking you to fix it. By using a letting agent all of the maintenance issues the tenant has will go through the agent and you can usually set up an agreement with the agent where they can carry out repairs on your behalf up to a certain cost. This would save you countless headaches and stress over the long term!

Big Local Network – Nine times out of ten a letting agent will have great connections across the area where your property is and this means that you don’t have to hurry around looking for tradesman or contractors when you need a repair on your property, because a letting agent will have a list of local tradesman for every repair that they have built up trust with and can rely on. If you were to do this on your own you may get stung by using a bad contractor, which could cost you more money and time than using a letting agent to carry out the repairs on your behalf.

Self-Managing

What does self-managing your buy to let property entail? It is essentially carrying out the same role as a letting agent would but doing it for yourself. This means that you would be responsible for advertising, viewings and maintenance.

So, what are the benefits of self-managing? 

Cheaper – This is the most obvious benefit of managing your property yourself. Most letting agents will charge between 8% and 12% of the monthly rent for managing your property. By self-managing, you would save this money which would result in a higher monthly profit for you on the property. This higher monthly profit may allow you to save up for a second property quicker or spend more money on yourself!

More personal – Managing yourself will allow you to provide a service to tenants that you are happy with and this service may be a lot more personal and hands on compared to a letting agent. This is because a letting agent usually has 100s of properties that they manage, so it’s not possible for them to provide a personalised service to each one. However, because you may only have a small number of properties, you will be able to commit more effort to each property and therefore provide a tailored and personal service for tenants. This could result in you being able to charge higher rents and therefore gain higher monthly profits.

Gain Experience – Gaining experience with managing your buy to let property is a very important set of skills to have and doing this whilst you only have your first property will mean that you are unlikely to be overrun and it should be a manageable workload. This experience will give you various options later down the line when you expand your portfolio. For example, it will allow you to understand what makes a good letting agent if you decide to outsource the management, or you may want to hire your own team to do this and you could potentially create your own letting agency, giving you another income stream.

What would we recommend?

Whether you choose to use a letting agent or not to manage your properties is massively dependant on your goals, your location and how much time you have. However, we would definitely recommend using a letting agent. This is because the majority of people will still have a fulltime job when they start investing in property, meaning they simply won’t have the time to manage the property themselves. As well as this, if you are investing in order to build a passive income or to pay for your retirement, you’re income will be a lot more stress free from property if you use a letting agent.