2-minute read
The answer to whether it’s cheaper to manage your buy-to-let property yourself or to pay an agent to do it is perhaps not as obvious as it first appears - it is not just a matter of the fees you pay to an agent verses yourself doing it for free.
There are a number of factors that need to be considered in such a calculation, including how much of your time you’re spending on managing the property, and making sure you avoid any costly pitfalls along the way.
A new survey has found that 61 per cent of landlords use a letting agent to manage their properties, a rise of seven per cent since the final quarter in 2016.
It also found that the proportion of landlords who manage their own affairs has dropped during the past year from 46 per cent to 39 per cent.
And all of this is taking place at a time when landlords’ profits are being squeezed more than even due to the introduction of tax hikes that they face.
On the face of it, using a letting agent costs money, so how could it be cheaper to hire one instead of managing things yourself?
Here are three reasons why it is worth considering using a letting agent to manage your investment property:
If you’re spending too much time on managing your property, it could soon become cheaper to employ an agent. If being a landlord isn’t your full time job, property management issues can soon eat into your working hours or free time.
Say there’s an issue that you need to resolve with your tenant. You know it’s going to be one of those things that drags on with a lot of back and forth. Not only will it be tedious and potentially stressful, but it could be a real time sink. Having an agent means they’ll be the ones doing the bulk of the work there, not you.
You can avoid any costly pitfalls when it comes to the law by seeking advice from your letting agent. They spend all of their working lives in this industry and so are well placed to advise you on making sure you are up-to-date on legal matters.
As Nik Madan, president of ARLA Propertymark, explains:
“On the surface, it might appear cheaper for a landlord to manage their buy-to-let property by themselves, but in reality there are more than 150 pieces of legislation that landlords need to abide by and there is a lot that needs to be considered to ensure they’re letting their property in a compliant manner.”
Although there are costs associated with hiring a letting agent, there is a silver lining. When it comes time to fill in your self assessment tax return, letting agent fees can be offset against your tax.
Ultimately it’s up to you whether you hire an agent or not, and if you do decide to then it’s worth looking around and finding a company that’s a good fit at the right price.
Do you use a letting agent? Why, or why not? Let us know in the comments.
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