Our recent landlord survey suggests that there is, and we are even seeing landlords treating their portfolios as a full-time career.

Over half of all landlords treat the management of their properties as a full-time job and just 19% of landlords say they rely on a property management company, with only a quarter using an estate agent. 

There is no doubt that managing your own portfolio can be very rewarding. And there are many reasons why a landlord may not want or need a letting agent. For example, they might have retired, otherwise have more time on their hands or have found that the cost of using a letting agent has risen.

 

Landlords shouldn’t go it alone 

However, while most tenancies and portfolios are relatively straightforward, landlords should still seek professional advice at the start of the portfolio journey.

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This should include drawing upon the experience and knowledge of their mortgage adviser. Alongside helping landlords find the best mortgage products, advisers can support landlords with advice on management fees, maintenance costs, and implications. Mortgage advisers can also help steer clients towards advice on the local market, including rental demand, typical rental yields, and property value trends.

Among the landlords that we surveyed who said they didn’t have another job, the majority owned small portfolios of between four and 10 properties, closely followed by 34% who owned over 20 properties. Only 18% owned 11-20 properties.

This finding makes perfect sense when you consider that smaller portfolios are much easier if you are managing them yourself. There is plenty for a landlord to do and they must do their homework. For example, landlords should ensure that they understand their legal duties on a whole range of issues such as how and when they can access their property, fire and electrical safety, and protection of tenant deposits. They will have responsibilities for repairs too and will need to ensure they have a reliable contractor. In addition, they must also have warranties for appliances.

The survey found that a limited company was the preferred set-up for most landlords, with 65% of owning their properties through this mechanism. 

 

More consideration needed with specialist properties 

Landlords who are self-managing homes in multiple occupation (HMOs) take on a greater level of complexity. HMOs can give higher rental yields and the HMO sector is certainly thriving to meet continuing demand for multi-occupancy properties. But anyone invested in this type of property needs to do their homework first.

Some councils, keen to tightly control the supply of HMOs, are introducing additional licensing schemes for smaller HMOs (defined as when at least three unrelated tenants live in the home). A large HMO – defined as a home occupied by five or more unrelated people – must always have a licence unless an exemption can be sought, no matter where it is. But these additional schemes are often in selected parts of a town or city.

Councils can also control HMO stock through implementing an Article 4 Direction. While planning permission is always required when changing a single dwelling house to a seven-bed-plus HMO, it is not normally required for an HMO for up to six people.

But an Article 4 Direction removes permitted development rights in particular locations. This means that would-be HMO landlords in those areas must apply for planning permission for a change of use for smaller HMOs as well.

 

Is self-management less costly? 

For all types of portfolio, cost savings are undoubtedly a big factor in a landlord’s decision to go it alone.

But this group could be in for a surprise if they think that, by doing so, they automatically save on costs. Our survey found that those who managed their own properties spent the biggest proportion of their rental income on property management. This was even though nearly half of all these landlords were paying the same or less through an estate agent or property management company. Some 15% of landlords spent 13% or more of their rental income on property management. 

But for self-managing landlords, this investment could be well worth their while, with tenant demand and rental yields strong across the country. The ratio of tenants to available properties has increased, which means greater opportunities for expanding existing portfolios. 

Above all, buy to let (BTL) has been a part of the housing market for 30 years. The sector is mature, resilient and has weathered many economic crises and uncertainties.

With strong prospects, the trend for self-managing landlords looks set to stay.