Full Management - Way to Go

Now that I own eight properties in the UK, I use Letting Agents and go for full management. This means that they typically take between 10% and 15% of the rent. 15% is fairly common. I never actually pay 15%, because I have four properties with the agent who would charge that. They only charge me 12.5%. The one which only charges is 10% is not as cheap as it sounds. They take a month’s rent for finding you a tenant. So, it is only cheaper if the tenant stays a couple of years.
But what do you get for this? For one thing, it means the end of waiting in for the plumber who doesn’t come. If there’s a problem, the tenant rings the letting agent, who rings you to sanction a repair. They’re supposed to go ahead with anything that costs less than £150, but they still tend to ring and check first. Often, there’s a chance that the repair may be more major, so they want the go ahead first. That makes sense – it saves the contractor going out twice and therefore, in the long run, saves you money.
It’s also worth noting that they can get people out quicker than individual landlords can and they can let contractors in to properties, so you’re not relying on tenants being in. When I’ve had to renew furniture or appliances, the management team of my letting agent has acquired these through their contractors at far more reasonable rates than I could achieve.
So, it’s definitely worth the percentage to me. After all, your mortgage provider expects your rent to cover the repayments by 125% - 130%. The taxman, at the moment, is still allowing you tax against expenditure, and so paying for full management stops you paying some tax on the rent. You’re really making money for the equity in your investment.
I’ve been on the other end of this for the last few months. I’m renting someone else’s investment property. There have been some maintenance issues. They’ve all been solved whilst I’ve been out at work. If I’d have been the householder, I would have had to wait in to get the toilet unblocked, the alarms reconnected and the showerhead mended.
Winners all round.