Landlords, Are You Really Saving Money by Self-Managing Your Rental? - Ep. 16

Landlords, Are You Really Saving Money by Self-Managing Your Rental? - Ep. 16

Welcome back to The All Things Property Podcast. In this episode, hosts Simon Bacon and Ian Sadler dive deep into the world of self-managing landlords, asking the tough question: does doing it all yourself really save you time, money, and stress or are you missing some hidden benefits by not partnering with a letting agent?

Drawing on years of hands-on experience, Simon Bacon and Ian Sadler share eye-opening anecdotes about the realities of property management, from overlooked compliance risks and midnight emergency calls, to the challenges of staying up to date with ever-changing legislation. They discuss real-life stories, including how a seemingly minor lapse in checking certificates could put landlords at serious legal and financial risk.

Whether you’re a proud DIY landlord, overwhelmed by unexpected issues, or simply curious about what a professional management service truly offers, this episode lays out the practical pros, potential pitfalls, and true value of working with a letting agent. Tune in for honest, straightforward insights designed to help landlords protect their investments, reduce stress, and maximise returns—all with the authentic advice you can always expect from the All Things Property Podcast team.

Chapters

00:00 The Challenges of Self-Managing Rentals

08:18 Let-Only Landlords vs Full Management

12:45 Landlord Compliance and Costs

13:39 "Benefits of Professional Property Management"

18:36 Tenant Vetting Importance for Landlords

21:19 "Call Us for Guidance"

______________________________

Get in touch with Simon for all your property needs. 
www.prefprop.com

E: simon@prefprop.com

T: 0121 2402244

Transcript

SPEAKER_01 0:00

And I got the letter certificate by certificates and if it was very no problem with the landlord has difficulty getting repairs done.

SPEAKER_00 0:11

That often had enough. Welcome to the All Things Property Podcast with me, Simon Bacon of Preferential Properties. Every week, Ian Sandler and I will delve into All Things Property. We'll guide you through with friendly, no nonsense advice. Hello and welcome to the All Things Property Podcast. Why is it he always raises his head and I say that? And I'm Simon Bacon from Preferential Properties. And I'm Ian Sandler from Aspire Property. And I've just introduced Ted as well. So here we are again. And today, Ian, what I thought we would talk about is this podcast at landlords who manage themselves their own properties and why self-managing landlords might benefit from a letting agent. So we're talking to those of you who self-manage properties. Obviously, you know, you're probably proud of doing everything yourself, or you feel it saves you money, but what we want to explore is why even experienced self-managing landlords might benefit from using professional letting agents and why the cost can actually be worth it in the long run. Let's be honest, managing your own rental property can feel probably quite empowering. You choose everything, you make all the decisions, but the reality is it can be a lot of work. When you self-manage, you are responsible for collecting the rent, chasing arrears if the tenant falls behind, handling routine maintenance, emergency repairs, and sometimes, dare I say it, late-night calls. You're also responsible for staying compliant with UK legislation, gas safety certificates, energy certificates, EICRs, and now laws coming up like AWAPS law. You're also responsible for dealing with disputes, complaints, and in worst case scenarios, evictions. Now, I don't know about you, but I've seen over the years that I've been dealing with this, I see a lot of landlords can get overwhelmed by it. The time, stress, and potential legal risks can actually cost more than paying an agent to manage property professionally. What are your thoughts on that, Ian?

SPEAKER_01 2:42

I think that most self-managing landlords are happy to do it, uh, but they they can go into it blind to many extents and don't appreciate how difficult it can be until a specific problem arises. Whether that's a problem tenant or repairs, maintenance, non-payment of rent, new legislation, it can be overwhelming.

SPEAKER_00 3:09

It's very easy for things to slip through the net. You know, I've had an example, it's very recent example where a let-only landlord gave me a call a couple of weeks ago and said, My tenants leaving, can you please re-market property? You've got photographs, that's fine. I of course I said, Yeah, that's absolutely fine. Was told he still wanted to manage it himself, went to put it on the market, and as part of the you know, initial setting up and making sure that everything was compliant, I said to the landlord, can you please send me through your latest electrical certificate and most up-to-date EPC that you've got. I got through an EPC that was out of date by five years, and I got an electrical certificate that was out of date by eight years. Wow. Now, when I said to him that these were no longer up to date, he was generally surprised that he had to, he said, but they were fine when you let last let it, but he hadn't realized that they had to be updated and provided to the tenant ongoing. How vulnerable was he? Incredibly vulnerable. The upshot is that the tenant could, if the tenant hadn't been leaving and he'd had rent or it and needed to give that tenant notice, he would have been non-compliant, he would have been fined, he could have lost the opportunity to recover the property. Uh and you just think, yeah, I know that's an extreme case, but you know, I wonder how many landlords there are out there who are thinking, Oh, I didn't realise that, or oh, I must just check and see when my electrical certificate expires. So, what would you do then?

SPEAKER_01 5:15

Being a nice person most of the time, you give advice, set the tendency up, and help him through the whole thing, get a new electrical certificate, gas safety, UPC, whatever, and then send him put a tent in, send him on his merry way because he still feels you've got all he needs from you to make him compliant again. He's look probably, but maybe not learnt his lesson. He's not gonna let you manage the property.

SPEAKER_00 5:39

So until something just happens, yes, and that's you know, I understand that for a lot of let owners and landlords, you know, it is just a case of why do I need to lose my lose a percentage of my rental income each month to get someone else to manage it. And when I went into the property to do some viewings, I would say he probably hadn't been in there to inspect it recently because ground floor flat. So I walked in, tenant was in the process of moving out, so the property was full of boxes and moving stuff. So from a marketing perspective and uh showing people around, it wasn't ideal. When you actually looked at it, Iron Lord had probably inspected his property for a while because there was the telltale signs of mould on the blinds in the bathroom, you know, the ceiling was was black, so it was evident that the property hadn't been particularly well ventilated, so you then end up showing people property and saying to them initially, because we hadn't seen it, we'd be told it was ready to view, so we go in, and you're showing people you lose that first initial marketing. But what it shows was in terms of the landlord keeping his property to a good standard and managing his assets, it it was also all almost. I don't want to say all let-only landlords are like this, but it it was an element of burying your head in the sand. He paid the tenant paid their rent on time, probably didn't report many repairs because there weren't many. So, from the landlord's perspective, it was probably, yeah, everything's fine, I don't need to worry about it. But had he done inspections and gone in there, he would have thought to himself, actually, you're not looking after my property. The tenant had been in there for years, you know, I think probably about 10 years, which is why the the certificates had expired. But it, you know, from a let-only perspective, it's the asset management, and that's what often people I think don't always recognize is maximising the rent and the the property value, looking after the asset.

SPEAKER_01 8:17

If you weigh up all the pros, because there aren't many cons to having a managing agent, it's it's well worth the management fee. All the potential, not just the basics that you've got to do and have to get your property ready, all the potential pitfalls and problems that you could encounter that could be made a lot easier if you had a managing agent.

SPEAKER_00 8:38

The difficulty though is that you know there are, and I'm not saying it's right, I'm not saying it's wrong, but you know, many let-only landlords who have a property. I'm not talking about a professional let-only portfolio landlord who's got you know 15 properties or HMOs, and so it's their full-time job. I'm talking about, you know, a let-only landlord that has one, maybe two properties, maybe three, you don't know, but you know, very small, and so it's not really their main focus, it's just uh an income that they get coming in. I think for a lot of those landlords, uh and and you know, if you disagree with me, put something in the comment section. But actually, you know, if I say to you, yeah, it's going to cost 10% of your monthly rent for me to manage your property, I think lots of landlords, lots of landlords go, I don't pay land.

SPEAKER_01 9:44

That's what you'd say, ask yourself why the majority of uh letting agents have a management management portfolio that far exceeds a letter-only portfolio because most people can see the benefits of having all the hassle removed from them.

SPEAKER_00 9:58

Because that's what it is, isn't it? A full management hassle-free. It is hassle-free. The compliance, you don't need to worry about compliance, you don't need to manage about repairs and maintenance. You know, you still have to pay for it, but you you have to for the agent to use their own contractors in the time scale that works for the tenant. Again, you know, I've had let-only landlords come to me saying, I really need the electrical certificate done, or I need some work done on the property, but my contractor, the people that I generally use, they can't do anything for me for you know six weeks or eight weeks. Have you got someone that I could use?

SPEAKER_01 10:43

So will you your the process, your thought process be there, then would you would you do it? Would you supply somebody? Would you charge for it? Or because if you're providing a service to get them out of a hole, that has a price, surely.

SPEAKER_00 10:56

Yeah, it does. But the reality is, you know, in on many occasions I will speak to our contractor and say, Look, I've got a letter landlord, they're having a difficulty with this. Could you give them a call and see if you can sort well? I won't take charge for it. Hmm, no, no, no, I'm not sure I agree with it, but you know, it's about just trying to I've always and I've always said this, it is about building, maintaining relationships. You know, you can't make landlords use you to manage, but what I hope is that you know, if a landlord does think about putting their property in the hands of a a letting agent that uh if you've offered them some support and guidance in the past, then you know they're more likely to come back to you, and that's either that or they'll continue taking advantage of you for the lifespan of their investments.

SPEAKER_01 11:46

Yeah, and that has been known.

SPEAKER_00 11:47

I appreciate that. Definitely. So, what other things would you say to a let-only landlord as to why they should consider using the letting agent in?

SPEAKER_01 11:58

Well, it's a busy world we live in, isn't it? Where people have more than they can cope with in their heads. So removing a lot of the stress and anxiety of the management that are management of the property, uh you you could you could understand the benefit of that without actually having to experience it. You just think, wow, I haven't got to do this, this, this, and this. That was free up to times think about this and do this. It's a no-brainer.

SPEAKER_00 12:26

Do you know what would be interesting for to say to a landlord, what do you think your hourly rate is? How much time, you know, what value do you place on your time? And is the cost that you'd be paying a letting agent for managing your property actually worth that amount of your particular time?

SPEAKER_01 12:52

It's not just the cost, is it? It's the mental stress and the strain of it. That's significant nowadays. No, no.

SPEAKER_00 12:59

So when you when they're weighing up the cost, they might say, Yes, but I don't spend you know more than four hours or an hour a week on my property, you know, just checking this or or doing that or whatever. But how many landlords, you know, go to sleep at night thinking, I wonder if I'm compliant, or whether they're completely oblivious. Oblivious to and the risk of of not being compliant, or you know, when a tenant moves out, um I think how long it takes to do a boob out and manage the deposit.

SPEAKER_01 13:37

The ostrich effect, isn't it? People don't bury their heads in the sand, and if you get no problems, fine. You get your head out of the sand every now and again when you need to relay it, then bury your head back in the sand, and it's not going to get dragged out of there until you the shit hits the fan.

SPEAKER_00 13:51

I think also that you know if you look at tenants, when I meet tenants and say we manage it, nine out of ten times, the response I get is oh, that's good. Because they it gives them an element of comfort as well. So I think what I suppose what I'm trying to say in a nutshell there is the profession handling from a tenant's perspective, to know that they can report a repair and that somebody will get onto it and deal with it and they have access to contractors in a speedy time scale, that often often keeps tenants happy and staying in properties when repairs are dealt with effectively. If if it's down to if the landlord has difficulty in getting repairs done, that often can lead tenants to go, oh I've had enough. I I want I want to find somewhere else, I want to move out. So there are lots of hidden um implications of of not having um or of having your property managed that I I think not everybody sees. What do you think?

SPEAKER_01 15:07

Yeah, and you don't realise how difficult it'll be until you get a problem and then your thought processes change.

SPEAKER_00 15:14

No, I agree. So in terms of if you are a let-only landlord and you're thinking what are the kind of practical tips that you might want to consider if you are thinking of changing. Firstly, if you think about switching from self-management to a professional agent, I would look at what is it that the fully managed service provides, check the services that are included, ask about compliance support, will that agent handle certificates, inspections, and notices? Look at their tenant screening process as well. Again, perhaps I shouldn't say this. I know that there are some letting agents that if they are acting as letting agent on a let-only basis, they will be less scrupulous with their selection of tenants. That's controversial.

SPEAKER_01 16:25

I know it is. I wouldn't have said that, wouldn't you? No. Because I don't think there are many letting well, maybe the road letting agents, but that that's going to be across the board of their reference process. But I think you you the first thing you have to do is to be able to provide a satisfactory reference for a letter-owning landlord if they have a problem down the line and then the landlord comes back to you and says, Can you show me the references to this tenant?

SPEAKER_00 16:48

Let's be fair, right? A reference from a from any letting agent, and maybe this is a different subject for me when I do viewings for prospective tenants, you can how can I put this? Lots of people will be fine on paper, but there are little elements of and I'm okay, an example so that I'm not overly contentious. An example you show two people a property, and the first one, the tenants turn the perspective tenants turn up, it's uh let's say a three-bedroom house, tenants turn up, two adults, two children. You let them into the property, and the children run up the stairs, hands up this up the walls, uh, and you're thinking to yourself, Oh, this is going to get a lot of wear if this particular tenant has it. Lovely, you know, but on paper, absolutely fine. All you see is two applicants, two children.

SPEAKER_01 18:00

Yeah, I'm not I wasn't talking so much about that. It's it's um if a la a landlord decides to sue an agent for not doing his job properly, and the first thing they're gonna check is No, I don't yeah, okay, but I don't think any agent wouldn't do their job properly.

SPEAKER_00 18:14

What I'm saying to you is that no, I didn't. What I was saying was that if a let-only a letting agent who is showing a property to find tenants for a let-only landlord will be could be more concerned with getting a tenant and letting it again than they are about the long-term. Well, that's very unprincipled to do that, isn't it? It is, but do you not think that it happens? It happens. I know it happens. Yeah, so do I. So, you know, yes, it's up principled, but it happens, and what I'm trying to say, I suppose, is that if as a self-managed landlord you, you know, the letting agent find you a tenant, there will be and there are letting agents or that show people out properties and will get applications in and will just want to get it let rather than going, actually, I'm not sure this is going to be the right one for you. So that's all that's sorry, that's all I was all I was trying to say is that you know look at the tenant screening process, make sure that the tenants you are being offered are going to be the right tenants for the property. So going back to it as a managed, if you are getting a managed service, I I do think that you know there is an element of come at tenant vetting process.

SPEAKER_01 19:53

Well, there should be anyway. You you're presuming that if you find a tenant for a specific landlord, then when that probably comes up for re-left, he's going to reinstruct you if you give him a peculiar purpose.

SPEAKER_00 20:06

We can only talk about ourselves. Now, from our perspective, and I know you, you know, we will always, whether it's let only or manage, we will always offer the best possible tenants to the land. And that's what I'm trying to get across is make sure that if you are considering a letting agent, talk to them about how they choose tenants, what the tenant process is, what the referencing process is, what checks are done. That's the point I'm trying to get across. Okay, I think you've finally got it across. Good. Okay, thanks. And communication, obviously, my communication with you hadn't been that good, but communication is actually crucial. Choose an agent who keeps you updated without overwhelming you. You don't want too much information, you want the agent to do their job, but you do want to uh make sure that you get a good level of communication. So moving on then, what I would say in conclusion is is self-management always the best choice? Not necessarily. For many landlords, using a letting agent is about isn't about giving up control, it's about partnering with professionals to protect your investment, reduce stress, and actually maximize your returns. What I would say that if you are a self-managing agent and want to talk through what having a managed agent really is all about, pick the phone up and give us a call. Thanks for tuning in to this week's episode of the All Things Property Podcast. If you found this episode useful, don't forget to subscribe, like and share. These things really help us reach the people who need to hear this advice. See you next week.