With profits being squeezed there's a natural desire to reduce costs, but is self-management the answer?
Recently I met with an Enfield landlord who was feeling distressed about changes to tax relief and the introduction of the stamp duty surcharge. His plan was to reduce his costs, with the first cost cutting exercise being to give notice to the lettings agent currently managing his properties.
There's no denying that landlord profits are going to be squeezed and reducing costs is always a good idea but is going it alone the solution? In the case of this landlord, he has good trade connections, good lettings knowledge and experience, he's up to date on legislation, has a local portfolio, and being retired he has greater time availability than most.
However, the majority of my landlords work full-time and so being on call for emergencies and dedicating time for property management isn't really practical.
Similarly I have landlords who live miles away and managing remotely even if you have the time and inclination to spend hours on the motorway, can be risky. Plus if you don't live in the area how do you go about finding good local tradesmen?
Arguably the biggest risk though is the ever changing legislation.
Lettings are becomming more complex and for anyone who doesn't have time or interest to stay abreast of the changes, a good agent will be invaluable. If you can build your knowledge and keep on top of the changes then great, but if you don't or you get it wrong the costs could be high, eating into your profits even more.
For information and advice on property investment and successfully letting your property please contact Belvoir!