Sudden new landlord. Manage myself or not?

Wb321

Hello, I've been looking at these board for a while trying to gather as much info as possible on how the property market 'really' works and I now am in need of some advice.

For a bit of back story, I graduated University last year and my parents were keen for me to follow in their footsteps, as it were, in becoming a landlords.

They have around 30 renal properties between them in and around North London and are very experienced in the field, which has served them very well over the last 30 years or so. 

They have just gifted and signed over 2 houses to me with tenants in situ to help me start my portfolio. All the legal work has already been completed and according to our solicitors and I'm good to go and I guess I am now effectively their landlord. 

I am aware about keeping certificates up to date, correct insurances etc. and I have a decent contingency fund in place in case of any sudden repairs that need to be undertaken. Houses are not HMO. 

My question really stems around: is it worth the money saving to manage the properties by myself, or let a management company do this for me and take the % hit on the income, much to the dismay of my parents, so I can focus on other ventures? 

The tenants so far have been in place for 2 years in property 1 and ~1 year in property 2. Both have never missed a payment and the house seemed to be in good condition when I visited shortly after completing all the transfer paperwork to introduce myself. I am aware this could change at any time.

Opinions of landlords from both sides would be appriciated. Thanks.

AdrianC

So your parents have been managing these two properties - along with all the rest - for years.

Doesn't that mean you know far better than we will what that management is likely to involve for these properties in this area with this type of tenant? You, therefore, have all the information to hand to make that decision for yourself.

Wb321

AdrianC said:

So your parents have been managing these two properties - along with all the rest - for years.

Doesn't that mean you know far better than we will what that management is likely to involve for these properties in this area with this type of tenant? You, therefore, have all the information to hand to make that decision for yourself.

Do you actually think that reply adds any value? I get that may people seem to state the obvious at times on these forums but it's not very helpful.

I will be making the decision myself. I am not asking for others to make the decision for me. I am asking the OPINION of other landlords that endorse management companies or regret using them if they believe they are not worth their % cut. 

The reason I ask is my parents dedicate all their time to running their properties. It is their full time job. I do not necessarily want it to be my full time job as I may want to explore other avenues. 

niceguyed

I'm not a landlord anymore and I am very glad not to be. But alas I was an accidental landlord so also had a FT job so for that reason I had a management company. In the main they were average but useful for finding a tenant, referencing, checkouts, periodic inspections and the legal side. For remedial works I used my own tradespeople as always quicker and less expensive but good to have the agent as a backup of I was too busy to sort that. 
 You do have the considerable  advantage of your parents in terms of knowledge, seemingly financial support and an army of contacts for any remedial works. You could for example just use an agent for finding a tenant and referencing it isn't all or nothing.
But even two properties could generate a lot of work so the question is do you plan on having that time over the next few years or do you just want an easier life from a passive income?
You could start off with an agent and see how it goes, you're not wedded to them although if they find you a tenant and you cut ties you will likely have to pay them a fee. 

greatcrested

If your parents gifted you this business they are best placed to help you. If they are just throwing you in the deep end without guidance, then.... shame on them!

Read

Post 7: New landlords (1):advice & information :see links in next post
Post 8: New landlords (2): Essential links for further information
Post 9: Letting agents: how should a landlord select or sack?

As a starter, have you or your solicitor complied with section 3 of the Landlord & Tenant Act 1985 . You have 2 months from date you became the owner/landlord.

AdrianC

Wb321 said:

AdrianC said:

So your parents have been managing these two properties - along with all the rest - for years.

Doesn't that mean you know far better than we will what that management is likely to involve for these properties in this area with this type of tenant? You, therefore, have all the information to hand to make that decision for yourself.

Do you actually think that reply adds any value? I get that may people seem to state the obvious at times on these forums but it's not very helpful.

I will be making the decision myself. I am not asking for others to make the decision for me. I am asking the OPINION of other landlords that endorse management companies or regret using them if they believe they are not worth their % cut. 

The reason I ask is my parents dedicate all their time to running their properties. It is their full time job. I do not necessarily want it to be my full time job as I may want to explore other avenues. 

Yes, I do think it worth the reply - simply because we do not have a fraction of the information you do have. Nor do we know how you prioritise your time.

You're asking us a question despite being in a far better position to answer it yourself. You just don't seem to appreciate that minor detail...

Two properties does not a full-time job make. Nor does it a full-time workload make. How much of a workload do they make? We have no idea, because we have no idea what the properties are. Or where. Or the position in the market they occupy. Or or or or or.

So how much management have these two properties required over, say, the last two years?
What %age of rent are agencies around you charging?
What monthly £ figure does that work out to?

numbercruncher8

Simple answer is to ask your parents, they are going to have more knowledge than most, and know the local area better as well as the tenants.

I'm guessing that if you did ask them, you aren't going to like the answer that they will give you.

If you're serious about becoming a landlord, then managing it yourself will give you some good lessons; assuming they stay in business one day their properties will be yours and if you're acquiring others you will have a massive portfolio.

If you don't want to become a landlord and want to concentrate on other ventures then it's just best to pay someone else to do it for you. The properties cost you nothing, and it sounds like you will be covered if there were voids. If you have no other major assets and this is going to be your main income its going to be quite difficult to build a portfolio in London.

I'd think the work could vary a lot, if it runs smoothly with good tenants you will have virtually nothing to do, if not it could eat up a lot of time.

Quick answer is that you probably know already. Anecdotally I've seen it happen: older boomer guy with many properties; 3 grown up sons, none followed him into the trade despite him being keen on it.

Robbo66

First and foremost is to take some courses and learn what is involved in being a landlord, the NRLA is a good place to start.
Being a Landlord is more involved than you think and there are pitfalls especially at the moment with the ever changing Legislation. Why not get an agent to manage for you till you feel confident that you have enough knowledge to go it alone.

Keep_pedalling

You need to live your own life not just do what your parents want you to do. If you don’t already own your own home this is a strange decision to make you a landlord before helping you with somewhere for you to live of you own. You certainly now can’t have the tax perks of a first time buyer.

onylon

It sounds like your parents have set up a sort of apprenticeship for you which provides some financial independance while you learn the family business. If you get someone else to manage your new properties its going to look like you took the money and then refused the responsibility.

macman

Wb321 said:

Hello, I've been looking at these board for a while trying to gather as much info as possible on how the property market 'really' works and I now am in need of some advice.

For a bit of back story, I graduated University last year and my parents were keen for me to follow in their footsteps, as it were, in becoming a landlords.

They have around 30 renal properties between them in and around North London and are very experienced in the field, which has served them very well over the last 30 years or so. 

They have just gifted and signed over 2 houses to me with tenants in situ to help me start my portfolio. All the legal work has already been completed and according to our solicitors and I'm good to go and I guess I am now effectively their landlord. 

I am aware about keeping certificates up to date, correct insurances etc. and I have a decent contingency fund in place in case of any sudden repairs that need to be undertaken. Houses are not HMO. 

My question really stems around: is it worth the money saving to manage the properties by myself, or let a management company do this for me and take the % hit on the income, much to the dismay of my parents, so I can focus on other ventures? 

The tenants so far have been in place for 2 years in property 1 and ~1 year in property 2. Both have never missed a payment and the house seemed to be in good condition when I visited shortly after completing all the transfer paperwork to introduce myself. I am aware this could change at any time.

Opinions of landlords from both sides would be appriciated. Thanks.

Is that some sort of freelance kidney-donor business then?