ADVANTAGE ONLINE | JULY 2024 13
Our latest landlord survey reveals a significant shift towards selfmanaging rental property portfolios , with many landlords now treating it as a full-time career .
The survey found that over half of landlords manage their properties full-time . Only 19 % of landlords use a property management company , and just a quarter rely on an estate agent .
Managing your own portfolio can be highly rewarding , and there are many reasons why a landlord might choose to go it alone . Some may have retired , have more time available , or find the cost of a letting agent too high . However , even though many tenancies and portfolios are straightforward , seeking professional advice at the start of the journey is crucial .
Among the landlords surveyed who do not have another job , the majority own small portfolios of four to ten properties . This was followed by 34 % who own over twenty properties and 18 % who own between eleven and twenty properties .
Smaller portfolios are easier to manage , making them ideal for self-management . However , landlords must do their homework . They need to understand their legal responsibilities , including property access rules , fire and electrical safety , and tenant deposit protection . They must also handle repairs and ensure they have reliable contractors and warranties for appliances .
The survey also found that 65 % of landlords prefer to own their properties through a limited company .
Self-managing HMOs ( Houses in Multiple Occupation ) involves more complexity . HMOs offer higher rental yields and are thriving to meet the demand for multi-occupancy properties . However , thorough research is essential for this type of investment .
Understanding the local market is crucial , as some councils are introducing additional licensing schemes for smaller HMOs ( three or more unrelated tenants ). Large HMOs ( five or more unrelated tenants ) always require a licence unless exempt . Additionally , councils can implement an Article 4 Direction to control HMO stock , requiring planning permission for changes from single dwellings to HMOs , even for fewer than six occupants .
Cost savings are a significant factor in a landlord ’ s decision to self-manage . However , those who do might be surprised to find they spend a large portion of their rental income on property management . The survey revealed that nearly half of self-managing landlords spend the same or less than they would with an estate agent or property management company . Fifteen percent pay 13 % or more of their rental income on management .
Despite these costs , self-managing landlords benefit from strong tenant demand and rental yields . The tenant-to-property ratio has increased , presenting opportunities to expand portfolios .
Buy-to-let has been a staple of the housing market for thirty years . The sector is mature and resilient and has weathered numerous economic challenges . With strong prospects , the trend of self-managing landlords is likely to continue .
To find out more about Landbay , visit the website here .