Thinking of investing in property, but hopeless at DIY!! Please advice

geek84

Hi Folks

I am thinking of investing ina property by letting it out. However, Iam hopeless at DIY. e.g. repairs & maintenance. Do you advice I go ahead with this plan andget a management agent involved? If so,the fees would be high (won't they?), and so would it be worth investing?

The only reason why I amthinking of this way of investing is because as you know, interest rates forsavings are quite low at the moment.


Thanks in advance for yourresponses.

david29dpo

Why do you think it would be an investment?

giraffe69

An alternative might be not to have a management company but have a relationship with a tame electrician, plumber etc.

SG27

I'm my opinion it would be risky even without the management company. I'm currently in the process of buying a house and there do many hidden costs that add up I don't know how anyone could get a decent return!

ACG

Management fees can typically be between 8 and 15%.

Personally i would seek out a good company rather than do it through the letting agent, the same goes for any insurances, i would do them through a broker rather than the agent.

If your only looking to do it for the short term then this might not be the best option. Having had properties that i let out, i know they can be a nightmare. I didnt use a letting agent but its not a case of buy a property, get a management company and stop worrying about it things crop up, there are high upfront costs (ie solicitors, valuation costs, arrangment fees presuming you need a mortgage etc) you then have costs at the end - selling the property through an estate agent, solicitors costs again etc etc.

If your doing it long term then you should be fine, if your looking for less than 5 years its probably not the best way to invest your money.

Thrugelmir

geek84 wrote: »

The only reason why I amthinking of this way of investing is because as you know, interest rates forsavings are quite low at the moment.


Thanks in advance for yourresponses.

Letting a property is a business. Not an investment. So comparison to a bank savings account is meaningless.

G_M

The issue is not DIY versus letting agent. Repairs/maintenance are just ONE aspect of a letting business, and can be done in many ways (eg employ your own electrician, handyman etc)

What you MUST do is

1) learn about being a landlord - start by reading this post here and
2) do a full business plan budget, showing all your costs, all your planned income, your tax etc and then compare with other investments (bearing in mind that a letting business takes up your time whereas a stock market investment does not!)

DominicJ_2

Once upon a time, I was lucky enough to have breakfast with a very successful business man.

Now, I was hung over as hell, and he was having eggs and kippers, so I was mostly trying to avoid vomiting all over the NED.

However, what I took away from this meeting, was one simple rule.

"Where do you add value"

If you cant answer that question, its a bad idea

You cant answer the question

victorias_dad

I'm a Handyman and look after a lot of properties for a number of landlords, some who I have never seen as they live and work abroard. They use an agent to find tenants, then list me as the preferred contractor for when things go wrong. It seems to work fine for both of us. I also have another landlord client who has eleven city centre apartments and manages them himself this he does on a part time basis as he has other work as well.

Werdnal

No being any good at DIY is really the least of your problems. If this is all that is worrying you, you clearly have a lot to learn about buying and letting property. Where maintenance is concerned, you can always pay someone to handle the things you cannot do yourself.

Of more concern is the legal, financial and emotional aspects of letting. Have you done any research? Do you know how to manage a tenancy? Comply with H&S regulations? Vet and credit check tenants? Draw up a valid a legally binding tenancy agreement? Take and protect a deposit from the tenants? and probably most important, how to evict non-paying tenants or end a tenancy if you want tenants to leave for any other reason?

Before you even start thinking about who will maintain the property, you must research all the legal requirements of letting and obligations of becoming a LL. Ongoing repairs are the easy bit - there are always trademan ready to help for the right price, but court action for eviction, claims from the tenant against you for failing to carry out your obligations are far more important! Read, learn and inwardly digest it all now - not when you have a bad paying tenant ... not when they wreck your property and you find you cannot claim anything from their deposit because you haven't protected it ... and tenant can actually take you to court for up to 3x the deposit value ...