- The pros of hiring a rental agent
- The cons of hiring a rental agent
- The pros of self-managing your rental property
- The cons of self-managing your rental property
Rental properties are a great way to supplement your income and expand your property portfolio.
Many landlords make use of a letting agent to assist them but others prefer managing the rental property on their own.
Managing a rental property is totally different from simply owning and living on the property.
It takes a lot of time and effort to ensure that the tenants are happy and comply with the rental agreement.
On the other hand, enlisting the help of a letting agent might cost you more because you need to pay a commission.
If you own rental property you must consider both the pros and the cons of managing the property yourself or letting an agent do it for you.
Here are some points to reflect on when making your decision.
The pros of hiring a rental agent
1) You save time
Arguably the biggest advantage of hiring a letting agent is that you save time.
If you own several properties or you have a busy day job, it can be very easy to let things slip simply because you don’t have time.
Letting agents can take care of all the administrative duties and they are experts in their field.
2) They can chase late rental payments
Another big problem that landlords experience is non-paying tenants.
It can be difficult having these conversations with tenants. If you are not firm enough, you run the risk of them simply ignoring your queries.
Letting agents have experience in collecting rent and they know how to deal with non-paying tenants.
3) You have an objective third-party between you and your tenants
It often happens that landlords and tenants don’t always get along.
These relationships can become strained and it quickly becomes an “us versus them” situation.
Having a letting agent manage your rental property can eliminate the need for any communication between you and your tenants.
Only the agents deal with them and they approach it from a purely business perspective with your best interests at heart.
The cons of hiring a rental agent
1) They charge a monthly fee
Letting agents charge a monthly fee for looking after your rental property.
It usually isn’t an exorbitant amount but it is still a portion of the rent that you don’t have in your pocket.
When enlisting the help of a letting agent, ensure that you know what their monthly fee is and the services included in that fee.
2) Evicting tenants might come at an extra cost
Evicting tenants is a difficult process and one that requires a bit more time from the letting agent’s side.
They might charge you extra when an eviction process starts because they need to deal with extra administrative duties.
3) You get divided attention
Your letting agent will probably have other rental properties on their books so their time will be divided.
You might get an agent who is super organized and timeous in his/her responses or you might get someone who is scatterbrained and unfocused.
The pros of self-managing your rental property
1) You have total control over your investment
If you are going to self-manage the rental property then you carry all the responsibility.
This includes taking care of the paperwork, the marketing, and the running of the rental property.
It gives you total control over your investment and you can make the decisions as you see fit.
2) You don’t have to pay monthly agency fees
As previously stated, if you enlist the help of a letting agent then you need to pay them a monthly fee for managing the property.
If you decide to manage the property yourself, you cut out the middleman.
You can pocket the entire rental amount every month.
3) You gain experience in the property industry
If you are keen to expand your property portfolio, then managing your rental property is the best way to start.
By managing it yourself you get to learn the ins and outs of rental properties first-hand.
It can help you make smarter decisions if you decide to buy more rental properties and you know that your properties will always be in good hands – your own.
The cons of self-managing your rental property
1) It is time-consuming to manage the rental property
Managing your rental property on your own means you have to be hands-on at all times.
It requires a lot of focus and dedication and you can’t afford to slip up.
This can be difficult if you already have other priorities. You might end up making serious mistakes that can cost you.
2) You might not have the necessary experience in managing tenants
Managing tenants is a daunting task. You need to be prepared during the entire rental process from screening to collecting rent every month.
You may not have the necessary experience to manage tenants successfully.
You might not screen tenants properly, for example, and sit with bad tenants for the next year or so.
3) You’ll have to evict tenants on your own
If you are not knowledgeable about property law and the eviction process, then you might find it difficult to evict your tenants if such a time comes.
It becomes very time-consuming especially since there are several legal processes to follow.
The truth is, there is no right or wrong here, it all depends on your personal preference and unique situation. If your time is limited, consider hiring a letting agent, if not, you will certainly pocket more and learn something new in the process.
Either way, consider the pointers above to ensure you make the right choice (for you!) to get the most out of your property investment. Good luck!
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