- Today, lets look at the pros and cons,
of self-managing your investment property.
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Hi, my name is Tony Law from Your First Four Houses,
and I teach people how to build a small property portfolio
that generates a great income for them,
so they can give up their day job, if they wish,
because their now financially free.
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So today, I want to talk about the pros and cons
of self-managing your investment property or properties,
and this is going to be particularly relevant
if you're just starting out in property.
So, let's kick things straight off with the pros,
first of all.
And, the first one, you're probably already thinking about,
and that's the fact that there's
the potential for more profit because,
if you're not having to pay out all those fees,
aren't you going to make more profit?
Well, the truth is, yes, sometimes, you can, of course,
make more profit if you maximise the rents,
and minimise the voids.
The next thing I would like to
focus on is on is prioritising.
Let me ask you a question: if a letting agent has, say,
fifty rooms that they need to get filled and,
maybe, a similar number of houses,
are they actually going to prioritise
on you, getting your room,
or your house filled with the right tenant?
And, this might be particularly important
to consider if that letting agent
actually has their own HMO's,
or their own service combination,
or their own single let properties.
Are they going to prioritise you?
I would suggest that, if you're self-managing, well,
of course, you're going to prioritise yourself.
One of the important things to do here is,
if you are using an agent, make sure you pay them well.
Don't, necessarily, try to beat them down on commission.
Because, if you're paying them x amount,
and somebody else is paying them considerably more,
aren't they going to want to put the
people in that property over there?
I think, if you're self-managing,
you also have greater control.
You get the ability to choose
the right tenants for your HMO,
assuming you're going down the HMO route.
Tenants that will mesh in really well
with the other tenants in the property.
Will the letting agent have the same level of care?
I'm not always convinced.
You can, also, shop around for suppliers, as well.
Suppliers of the various services, utilities,
and other bits and pieces that are
associated with the property.
You, also, have closer contact with the tenants,
if you self-manage, and that means that
you can pretty much guarantee
they're going to stay longer in that property,
because you can jump on any problems as,
and when they immediately arise,
and you can make sure that that tenant is really cared for,
and you can sort of if there are any issues in the house,
again, you can jump on them really quickly and,
as a result, extend the lifespan of that tenancy.
I, personally, think that
there's some real job self-satisfaction
to managing your own property.
Now, I appreciate that's if this floats your boat.
Because, it really isn't for everybody.
By the way, if you are finding this video helpful,
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click on that thumbs up button down there.
It really helps me, if that's okay.
Now, let's have a quick look at the cons.
Well, I have to say, first of all,
this is far more hands-on so,
this really does have to be something that you enjoy.
If you don't enjoy this, don't do it.
Absolutely, go and manage an agent or,
rather, pay an agent to manage this property for you.
On this note, if you're not a big fan of tenants,
then this really isn't for you.
Now, personally, I really enjoy
interacting with the tenants,
making sure that they're happy.
It's just something that I really enjoy doing, and so,
for me, that isn't a job but, for some people,
the idea of interacting with the tenants, at any level,
well, that really isn't for them so, of course,
in that case, you're definitely going to be using an agent.
Time, is obviously a big issue here, isn't it?
Especially if you're running HMO's or service a combination,
I would say, in particular,
you gotta consider advertising, viewings, referencing.
This is very much a hands-on business,
if you don't have systems in place.
Systems is everything.
Of course,
there's legislation that you need to keep up to date with.
I don't, personally,
think it's that difficult to keep up to date
with the latest legislation but,
you do need to make sure that you focus sometime,
each month, to making sure you read the latest publications.
Also, if you're not already a member
of the National Landlord Association, the NLA or the RLA,
please go and join up with one of those.
My personal preference is the NLA but,
maybe I'm biassed there.
I know some property investors are members of both but,
either way, that is a great source of reliable information.
Maintenance, obviously, has to be considered,
if you're self-managing.
Now, I don't, personally,
do any of the work in any of my properties anymore.
I used to but, I don't do any of it now.
But, you have to, actually,
liaise with the correct trades-person
to get that toilet unblocked,
or whatever is required.
But you, yourself, are actually going to be handling that.
I guess, one of the pros of that is,
it means you can choose the right person
who's not going to overcharge you, maybe,
if you're self-managing.
But, either way, I'd consider this as a con,
because you do have to be on top of the maintenance.
Holidays can be an issue.
If you're away for two weeks, who's going to, actually,
help that tenant if they have a particular problem?
I really emphasise to people that they need,
what used to be called, an odd-job man or woman available,
on-hand, can go out, that can help that person,
that can carry out little tasks that need to be done.
I, also, think that it's really important to give somebody
that you trust either,
your direct mobile phone that's to relevance to that
property, or get the calls diverted to somebody.
I was just, people buy them, a pay-as-you-go mobile,
and then, you can divert the calls to that,
and you can give that pay-as-you-go
mobile to anybody, actually.
And they can, then, manage any issues that they have,
because, do you know what?
You don't want to be hearing about a blocked toilet at two
o'clock in the morning if you're away in some sunny climate.
And so, what I would suggest you do,
if you're just starting out,
is to self-manage your first property.
Honestly, I think that you will learn so much by
self-managing property number one.
The key to self-managing is having great systems and,
in my own line of Property Masterclass,
I share all the systems that work for me.
To find out if this course would benefit you,
why not book a ten-minute call with me
by clicking on the link here.
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