First time landlords are enthusiastic and eager to get started. They usually want to do everything themselves, including the management of the rental property. Although this does have its advantages, it is not necessarily the route you should take.
Probably the largest advantage with self management, is saving money. You do not have to pay a monthly fee to a letting agent, which can sometimes be up to 15 percent for a full management service. In addition to the management fee, you can also save money on maintenance costs. Because you decide who does the work and mows the lawn, you can shop around and be more inclined to look for the best possible price. If you decide to go for self management, it's always a good idea to create a list of good, reliable, local handymen.
The downside of managing your rental real estate, is the precious time it takes up. If you are a part-time landlord, still in full time employment, you need to seriously consider if you have enough time to spare. You may find yourself in situations where you're rushing about juggling the landlord role with your professional job.
Another consideration should be the location of your rental property. If you live far from your property, it may use up even more of your time traveling back and forth, not to mention cost you extra in fuel. The delay it takes for you to arrive may also cause problems. For example a leaking roof or burst pipe requires immediate attention.
Opting for a letting agent solves many of the problems with self management, although does come at a cost. But that's not all. There are additional disadvantages when hiring a letting agent.
Management agents often will not have the same care and consideration for the property as you do. After all, you've invested a lot of money into the real estate and want everything to run as smoothly as possible.
Furthermore, a letting agent may take longer to find tenants for your property, especially during busy times of the year. They are often dealing with dozens of vacant properties at the same time, and may favor competitors if it means they get more commission.
You need to understand that using a management company may result in more late rent payments as they may not be as diligent in collecting late rent as you would be.
Also, remember that letting agents might try to impress you by saving money on essential repair and maintenance of the property. It will look good in the short term, but you may face a large repair bill in the future if your real estate deteriorates due to lack of care.
So remember there is a lot to consider when deciding on the route you'll take. If you do decide to go for a management company, be sure to research them thoroughly and look for a long list of happy landlord testimonials.