As you may well know, we are currently travelling the world on the income from our property portfolio. Even though we have been out of the country for 5 months and do not plan on returning for another 12 months or so, the decision not to use a letting agent was an easy one for us. In the property circles there is always a big emphasis on leveraging other peoples time, and getting an agent to manage your properties seems to be very popular. We did initially jump on the band waggon, but after a short period of time jumped straight back off again.
Why? Well we just couldn’t justify how much they charge for what they actually do. We genuinely felt we could offer the tenants a better service whilst being able to save ourself a significant amount of money in the process. It’s not just the agent fees we save on but when it comes to maintenance, we save hundreds each time by contacting our own tradesmen that we trust instead of often getting ripped off by agent’s over inflated prices.
Don’t get me wrong when we started self managing it was really hard work, we had no idea what we was doing and didn’t have anyone to turn to for help. But now we have been doing it successfully for several years and each part of the process is heavily systemised. Obviously at a large scale you are just going to create yourself a job, but I cant see us putting the portfolio back with an agent until at least 40+ properties, if we ever get to that number.
How’s it going so far?
So you’re probably wondering if we have had any issues self managing whilst travelling the world. To be perfectly honest it has been easier than we first thought. It’s been 5 months and during this time we have only had 3 phone calls from tenants, one was regarding a broken immersion heater, the other a shower and finally just a call to change a rent payment date.
As the time difference is often an issue, there is a few things we have done to ensure ease of communication for our tenants:
- We have requested that tenants contact us initially via email (unless of course there is an emergency). This not only ensures we can respond at a time convenient for us but it’s also good practice to get any issues recorded in writing.
- We have set our voicemail messages to advice tenants to email us or call a property specific number in an emergency.
- One of our family members in the UK was kind enough to monitor our ‘property phone’ whilst we are away. Tenants will call this phone in an emergency and our family member is well versed in who to call should there be an issue that requires a tradesman quickly.
- Our mail is redirected back in the UK and monitored by a family member. This ensures we can keep up to date with any property related correspondence we may receive.
How much time does it take up?
Initially we spent a lot of time getting to grips with self managing. However once everything is systemised , as discussed below, it becomes very easy. One worry we had when we left the UK was how much time we would need to spend on property related tasks, and whether it would eat into the time we wanted to spend enjoying the world.
Fortunately this hasn’t been a problem at all, I would guess on average we have spent around 1-2 hours on property tasks each month. This includes communication with tenants and insurance and tenancy renewals.
How you can make self management a success
When it comes to self managing property, there are 4 things we make sure we always get right:
The tenant’s happiness is at the top of our priority list. A happy tenant won’t fly off the handle if they can’t get hold of you because you are on holiday, and wont demand something is fixed on a weekend when it can wait till Monday. A happy tenants is much more likely to stay at the property longer, and any landlord will tell you that long term tenants are golden.
Properly maintained houses
We mostly purchase houses that require full refurbishment and take the opportunity to replace almost everything, even if its not 100% necessary. This is especially true with the plumbing. We will rip everything out and start anew. The old plumbing may have been in perfect working order but new plumbing is going to last a lot longer, will remove all the DIY botch jobs that have been done over the years and finally allow you to install the best bathroom and kitchen layout possible with proper isolations and cut-off points reducing labour charges on any call outs in the future.
When something does go wrong life is made much easier if you have a list of trusted and reliable workmen that you have been able to build up a relationship with. When we started I remember endlessly ringing trades man after tradesman trying to get someone to come out to a property, and then not really knowing if they are going to show up or not.
We now have a list of decent trustworthy tradesmen that we can call on if something goes wrong. Another top tip is to avoid getting everything done as cheap as possible, as tempting as this is, it pays in the long run to pay a little more and get the job done well, and on time. For example our electrician is on the expensive side, but he always picks up his phone and always has availability, sometimes you just get fed up with being messed around and you are happy to pay a slight premium.
Find the right tenants
If you put your house with a letting agent they will find you a good tenant, but sometimes not the best. When we are letting one of our properties we will always do over 10 viewings and pick the best prospective tenant. It is very fortunate that we can do this, our properties are in areas of extreme rental demand and 10 viewings can be achieved over a weekend.
A good example of this was when we found a fantastic family of five to rent one of our 3 bedroom houses. We thought they were going to be the best we was going to find, but the next day a single middle age man turned up, with no children and wanted to pay a year upfront. The property will receive much less wear from one person than five so it’s a good job we didn’t put them forward right away. If we had used an agent, the family of 5 would have moved in.
Top 5 take aways
- Systemise everything. We have a detailed procedural document that we follow exactly each time we have a property to let. This ensures nothing is overlooked.
- Do whatever you can to ensure your tenants are happy, but don’t be taken advantage of.
- Keep your properties well maintained and don’t cut corners with renovations or maintenance.
- Build a list of reliable tradesmen that you can call on the instant anything goes wrong.
- Find the rights tenants, remember an empty house is better than bad tenants.
I appreciate some of what I have said is controversial so I’d love to hear other people’s thoughts on self management, the good and the bad experiences. Please leave us a comment or get in touch on Facebook.