Modern Rental Options for Landlords in the UK
Most landlords in the UK are faced with the challenge of choosing what type of rental option to go with. Owning a rental property is quite different from managing your rental property. While ownership may be easy (when you have a steady income), managing a rental property is more than collecting rent. Landlords in the UK may be stuck with questions like “Is it better I hire a property agency company or self-manage my rentals?” There is no direct and definite answer to this question.
If you are a landlord with this kind of question, this article provides a few pros and cons of self-management in comparison with other property management options. Now let’s look at the pros and cons of self-managed rentals.
Self-Managing a Property
No management fees – Most property management companies collect between 9-17% of your rental income each month. If you’re managing your property, you can save on property management fees.
You have 100% control over your property – To self-manage a rental property means that you are responsible for everything. Be it marketing, tenant management, tenant referencing, maintenance, or repairs, you are responsible for it all. You can make decisions that you feel are better for your investment. In this rental option, there won’t be a middleman between you and your rental revenue.
The task is very demanding – Unless you have lots of spare time to offer, you may find it hard to manage your rental property properly. There are a lot of tasks that will need your attention, such as advertising, maintenance and dealing with bad tenants.
Improper screening of tenants – Unlike having a property manager, self-management means you will have to reference all the prospective tenants. Failing to do so properly, could leave you with bad tenants who may not handle your property with care; are a nuisance to other tenants, or won’t pay rent when due.
Next, let’s look into the using the Property Management option.
Property Management Company
A Property management agent, also known as property managers, are used by landlords to manage the day to day running of their investment properties.
Communication – Property managers will help take care of the communication with the tenant.
Regulations – Property managers are current on the regulations governing landlord statutes. You may not be current on these and therefore put yourself and the investment at risk.
Connections – Property management companies have a lot of connections with contractors and know who to trust. So when it comes to maintenance, your property is secured.
Cost – The common con of using a property management company is that the cost of retaining this company can affect your profit margin. Many companies will have extra costs for services including tenant finder fees, contract renewal.
Attention to detail – A company that manages multiple properties will, arguably, not be able to give the same time and attention to your property as you can.
Having seen the pros and cons of self-managing and using a property management company, let’s look at that of service apartments.
Service accommodation has been on the rise in the UK, providing great returns for investors/landlords. The introduction of platforms such as AirBnB, Air Bristol etc, has made it easier for landlords to advertise and find guests for their serviced apartment properties.
Tax Advantages – There is nothing as enjoyable as being “tax-free.” One of the main advantages of a serviced apartment is the possibility to benefit from tax-free income if your investment qualifies as a furnished holiday let (also known as FHL). FHL is taxed in a way that gives it a hedge over the regular buy-to-lets commercial property. Another advantage is the potential to claim capital allowance on the fixtures of the property.
Higher rental yields – The interesting part of owning a serviced apartment is the fantastic yields you can get. Research shows that long-term residential tenancies typically have a return of about 3-4%, while serviced apartments has about 6-9% yield. This happens because serviced apartments aim at a type of tenant who is willing and able to pay more for a piece of luxury, and some home comfort.
Lease restrictions and mortgage – The limits on your mortgage or lease may prevent you from providing short-term lets. The end result of breaching all of these restrictions could be worse as your bank drawing your mortgage out away from you.
Increased Management – In serviced apartments, the increasing number of tenants makes managing the investment/property more time-consuming. There are a lot of people to meet and greet. Thus, managing a serviced apartment will be very hard if you have a regular day job.
Bespoke Livings Solution
An independent local property solutions company, working exclusively in Bristol. We provide a fresh take on modern living, sourcing trendy properties ideally suited to busy, new or relocating professionals in the city.
We effectively become the tenant on a company let agreement, guaranteeing a fixed rental income. We take control of your property, completing a light refurbishment if applicable, and fully furnishing the property to a high standard.
We will then rent the property to our professional and corporate clients working locally or relocating, taking great care to select the right tenants. All tenants are full time workers not contractors and will be in the property for 6 months or longer.
Guaranteed Income – Every month without fail, you will receive your agreed monthly rental payments from us regardless of any void periods in the property.
Property Refurbishment – In many cases when we first take on a property, we provide a light refurbishment, which helps to increase the value of your property
Hands off Experience – We do everything from, advertisement, viewings and rent collection, we also cover all the maintenance on the property (excluding structural, boilers and damp). At the end of the agreement, you receive your property back in great condition.
With this article, landlords in the UK have a few great options to suit their property investment. It is a matter of circumstances and preferred outcomes, which will help you choose the best options for you.
If you feel Bespoke Living’s solution would be a great option for your property or you wish to find out more details, feel free to contact us if you have any further questions.
0117 422 1448 / firstname.lastname@example.org
You can also visit our website www.bespokelivingbristol.com
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