How long it takes to self-manage property and how to save time doing it
How long it takes to self-manage property and how to save time doing it
In one of the most extensive surveys commissioned for the sector by Homelet in 2019, it was estimated that just over 50% of UK private landlords are not using a letting agency to manage their properties with around 30% using them for tenant finding only.
At anywhere between 8 and 15%+ of your monthly rental income (any less and it is suspicious how much service delivery you are actually getting), full tenancy management can represent a huge chunk out of your rental income.
In fact, when you look more deeply at a typical letting agent’s menu of costs you may be surprised to find what’s not included in their monthly management fee. By the time many other services are added on like the preparation of inventories or maintenance contractor co-ordination, the real cost of a 10% monthly fee could be more like 17%+.
When you consider all the other ongoing costs of mortgage re-payments, insurance, mandatory safety checks, maintenance and more, your property investment could be returning a meagre income unless you are purely happy to bank on rising property prices.
Because if this, many residential landlords consider taking on the management of their rental properties themselves.
Why else do landlords decide to self-manage property?
A rental property is typically a large investment for anyone. When you decide to rent property, your money is tied up in the property. Quite often that money represents your retirement fund.
When your future depends on the appreciation in value of the property and a steady, profitable rental income, you’ll naturally take a greater interest than anyone – including any agents you instruct to manage on your behalf.
If your letting agent is not seen to be keeping an attentive eye on the property and its tenants and providing regular updates and advice on protecting the value of the rental yield and asset value then you’ll start thinking of taking matters into your own hands.
To be in control
When someone wants a truly passive investment strategy, then they will invest all of their savings into the stock market, bonds, and other hands-off opportunities.
By purchasing rental properties (or becoming an accidental landlord by purchasing a new rental), you’ve clearly decided that you do not want to be entirely passive.
Even if you decide to hand-off management of the property to a letting agent, there is still a large amount of decisions to make before you do so.
Because of this, you may decide to retain control. You were already aware there was work to be done and feel that if a job’s worth doing well you should do it yourself.
What are the main areas of property management
Finding new tenants
Encompasses marketing the property, screening applicants, conducting video call and physical property viewings, tenant referencing, preparing tenancy agreements, taking and registering tenancy deposits, preparing inventories and checking-in tenants.
A letting agent will typically charge a month’s rent for finding tenants but will likely add additional costs for preparing inventories.
Encompasses collecting rent, carrying out scheduled inspections, handling maintenance requests and keeping the property in a well maintained state.
A letting agent will typically charge 8-15%+ of the monthly rent for this service with extra charges for coordinating repairs in addition to this fee. The cost of labour and materials from contractors doing maintenance work is also not included.
Staying on top of the ever changing regulatory environment and ensuring the property complies with legislation including a valid Energy Performance Certificate and up-to-date gas and electrical safety inspections. If the property is a HMO the list of requirements will be longer.
A letting agent will advise on the above as part of their management fee but the cost of sorting out all the necessary certificates and checks will be an additional cost – both in terms of their co-ordination and the costs from the contractors fulfilling the work. Even after all of this, you – the landlord are still ultimately responsible. Your responsibilities as a landlord are detailed in the UK Government website here.
Encompasses the buy-to-let mortgage, arranging landlords’ building, contents and rent guarantee insurance, accounting for all expenses (including letting agent fees) and filing tax returns. This will almost always be on you the landlord. If your agent assists they’ll tend to pass you on to their preferred experts who will charge for their services separately.
Dealing with the unexpected
Could encompass dealing with rent arrears or other tenancy contract breaches, tenant issues from unauthorised sub-letting to anti-social behaviour and the need to serve notice and handle evictions.
A letting agent will take on the brunt of these more unpleasant tasks should they arise as part of their management fee but you can expect to be charged extra for any required legal services.
End of tenancy management
Encompasses the re-renegotiation of tenancies including rent reviews, pre-check out visits, checking-out tenants, returning deposits in whole or in part including dispute management, informing the council regarding council tax as well a utility companies of change of property occupation status and making the property ready for its new tenants.
A letting agent will want to charge separately for re-negotiating any tenancies. As per on-going management they will charge extra for coordinating any maintenance and re-decorative work. The cost of labour and materials from contractors doing the work is also not included.
Self-management or letting agent? What is the right choice for me?
Before you decide whether or not to purchase a rental property and your choice for management, you need to understand how much your time is worth. If you work in a profession like law that charges for its time, you probably know your billable hours. For everyone else, you can estimate it.
Property management is a collection of tasks that are not individually challenging, however, as a whole can represent success or failure. We define success as achieving financial goals with a minimal amount of time investment, so landlords have the time available to focus on what they want.
In the case of non-professional/accidental landlords that could be their career or for professional landlords and property managers expanding the size of their property portfolio.
Everyone of course wants more time to enjoy life – especially after the restrictions and boredom of the lockdown we’ve all had to endure.
How long does it take to self-manage property and how to save time doing it?
As a rule of thumb across the industry, an owner spends roughly 4 hours per month per rental property. Using simple maths, you get to 48 hours per year for the day-to-day management.
An equal amount of time is spent on finding new tenants, and turning over the rental. Therefore, if you turn over the property every year, it’s roughly 96 hours, or just over 2 weeks of work.
What’s the cost to self-manage property and how can I save time doing it?
For self-management, it is obviously your time of two weeks per year per property.
Research estimates that property management software could help you save up to 50% of this time.
Letting agencies have known this for some time and in the main have invested heavily in a plethora of ‘enterprise level’ property management software to help streamline their operations and lower their costs (but not necessarily what they charge their landlord customers).
For a while, such property management software was not suitable for even professional private landlords due to high cost of entry and training requirements.
However, the arrival of new, low cost property management software that is suitable for the private landlord in terms of cost and ease of use provides an opportunity.
RentiD Manage Plus with its powerful rent management capabilities starts from only £12.50 per month (£180 incl. VAT for an annual subscription). There is a 20% discount for paying for the year upfront.
The cost of investing in platforms like RentiD can easily be covered many times over by the value of time saved. For example, if you’re a professional that bills for their time, the opportunity cost of what you could be earning versus the time spent on property management will be much higher. The Government guideline hourly rate for a solicitor with 8 year’s experience in National Grade 1 (covers most of South East England) is £217 per hour.
We would like to add however, that whilst technology can do a lot to assist, landlords will still need to learn and apply good practice to minimise the risks inherent in property management that can lead to a further loss of time as well as money.
Conclusion – how long it takes to self-manage property and how to save time doing it
50% UK residential landlords self-manage their properties to maximise their rental income and for best transparency and control.
Studies suggest it takes on average 96 hours a year to manage a residential let.
Property management software designed for private landlords can help save up to 50% of this time by automating processes including rent collection management.
RentiD and our property management software can help you save time, money, hassle and risk.
With the RentiD Digital Assistant app you can:
- communicate directly with your tenants in order to foster good relationships and be pro-active about renewing their tenancy
- share documents and essential property information like the location of utility meters to gate codes and bin collection days with your tenants for compliance and less queries
- streamline rent management by easily keeping tabs on payments within the Digital Assistant app which will also automatically send reminders to pay to your tenants – no more checking of bank statements every month
- cut down on non-genuine maintenance requests as RentiD comes with a structured maintenance issue raising tool for tenants packed with content to help them resolve easy-to-fix problems before you get involved
- avoid late night emergency call-outs as out of hours emergencies like major leaks or lock-outs are forwarded directly to the AXA Partners Network (or your preferred emergency service)
- get access to everything you need to find new tenants quickly including advertising your property on Rightmove, Zoopla and PrimeLocation and pulling together a great listing with professional photography, floor plans and 3D virtual tours
Plus we are working on other ways to automate more property management processes including the end of tenancy to save landlords even more time.
Unlike some of our competitors, RentiD is more than just software. We can provide all the other services you may need as a landlord on demand as well access to a network of carefully selected partners covering everything from legal services, property maintenance, void property management and more.
All in one place and all at fair, High Street beating prices.
Click here to get started today. You can try RentiD Manage Plus free for 30 days.
Self-manage property and save time doing it with RentiD.