Managing Rental Properties - advice please

kevincastle

Hi. I have recently taken early retirement. I’m looking at ways to supplement my income. I don’t need to make much money, it’s as much to keep myself busy. One opportunity I have thought about is to manage some rental properties for people I know that have no more than a handful of rental properties that they don’t have the time or inclination to manage themselves. It seems the service offered by agencies is not always great – they don’t have much to do with it and they take quite a chunk for doing it. Well, that's the perspective of people I know what are looking at other options anyhow.

With this in mind, would people be able to give me a steer on what I might need to look out for if setting myself up to manage a few properties. I’d be looking after viewings, getting references, setting up payments, inspections, all the usual stuff, as well as managing issues with the properties, ensuring rental payments goes through, deposits are returned upon inspection, inventory checked etc. A solicitor would look after the contract side of things.

I know it sounds like a pain in the @ss when I outline it all but I am keen to look into what would need to be in place. I suppose I am looking to approach it with eyes wide open, and forewarned of the issues, so that I make good decisions, and not newbie mistakes.

I’d appreciate if people could advise on the do’s and don’ts of managing property for landlords. Information on what rates I should charge people, how to set up etc would be really appreciated.

Thanks.

The_Morrigan

Just a gentle reminder that professional advice isn't allowed. OP anything relating to company set ups, tax advice etc must be sought from the relevant professionals.

whippet

I use the services of an agent to rent out my place .. I don't want to be a land lord and I don't have the time to be dealing with it.

I am willing to pay the significant amount that I am charged so that I don't ever get bothered with anything unless it is totally necessary .. for this to work I need to trust the agent. I have had previous agents who I couldn't trust.

What I need from them is:
- The agent advertises, sources and checks all new tenants. (based on my prescribed preferences)
- The rent (less agents commission) arrives in my bank account on the prescribed day each month, never any surprises, excuses along with a detailed receipt and invoice.
- The tenant only makes contact with the agent, the agent deals with everything, full stop.
- Should the tenant report a repair requirement or damage the agent does a call out (no charge for this) and makes a recommendation to me by email with relevant photographs. I give authorisation for required action and any cost is deducted from my next rent payment.
- Any repairs / upkeep needed is recommended to my by the agent and I will authorise work to be done based on a competitive quote.
- Should there be a problem with the tenant / tenancy the agent does all the dealings in accordance with the legal requirements.
- Should a tenancy end early, the agent does not charge a new advertising fee and will not be paid another commission until new tenants are found (this was a difficult enough part of the negotiation)
- The agent will ensure that the house is cleaned and ready for rental as soon as possible after tenants leave.

All this may sound either straight forward enough or pain in the ass depending on where you are coming from, but I am willing to pay for a service if it is done right. Doing this yourself, can you act as a plumber, spark and registered Gas installer on top of all the other duties ..if not you will be sub-contracting this work out to others. Unless you have a critical mass of properties it may be difficult to make it work.

Also - will you be holding cash, taking payments in to your own account from tenants?

You mention a solicitor would look after the contract side of things? That is something that the agent handles for me and to be fair if you wouldn't be confident of handling a simple tenancy contract etc .. you would be passing an unnecessary cost to the landlord for an expensive legal professional to draft a contract.

I pay 8.5% of the rental income for this service.

On a €1000pm property this works out at €85 per month or €850 per year (it would cost about 1/4 of that to have a solicitor draw up a lease) ... take away your USC, Income tax etc ... you would need to have a fair amount of properties on board to make it worth while

kevincastle

Thanks whippet for taking the time to reply.

I can see that it really is a numbers game if you want to avoid it being more hassle than it is worth.

Re the various skill sets required, do you think the agency would have an electrcian/plumber etc full time? I would have been hoping to get someone else to look at it, and bill it to the tennant/landlord as appropriate.

Re the cash, I hadn't quite worked that out, but I see where you are coming from.

Thanks again.

KC.

Santa Cruz

KC While I understand your desire to earn extra income and have an activity to keep you interested in retirement there are a number of legal requirements which you will have to meet if you wish to go beyond a very informal arrangement of organising lettings, property management. You will need to check out the Property Regulator as Property Agents, Estate Agents etc. are now required to be licensed. You will have to satisfy the Regulator that you have the necessary expertise to do this type of work.

There are other services that you could supply such as checking properties for people on holiday, organising big clean up of the properties while people are away etc.

hfallada

Firstly no one uses solicitors for rental contracts. A generic one can be brought in any seasons. If you are letting to students expect 3am phone calls of im locked out.

Being a landlord isn't handy and I don't think I would be bother with a job of a landlord for a single degit management fee. Most landlord Dont take agents as the rent they get is fairly poor compared to letting it themselves. What's your unique selling point? Because most customers would be better off with an agent who is experienced with this industry

Santa Cruz

hfallada wrote: »

Firstly no one uses solicitors for rental contracts. A generic one can be brought in any seasons. If you are letting to students expect 3am phone calls of im locked out.

Being a landlord isn't handy and I don't think I would be bother with a job of a landlord for a single degit management fee. Most landlord Dont take agents as the rent they get is fairly poor compared to letting it themselves. What's your unique selling point? Because most customers would be better off with an agent who is experienced with this industry

That is why I think that getting some informal arrangement by word of mouth is his best hope. Maybe in his circle of friends they would know some widowed person, single person who has been let some property in a will and needs some help letting it out. Whatever financial arrangement they come to is their own business

kevincastle

I take your points above. I'd need to either do it as a very informal thing, where I do not become an agent, just help the landlord, in which case there is not much in it for me except hassle. The alternative is to look at setting up an agency, where I have to get into the regulated world.

Do landlords who have more than a handful of properties (or Agencies) all use software that manages all the bits & pieces: payments, contracts, etc? If so, is this something I could use to help manage larger numbers, and "operate" this as a kind of middle man. Again, I'm not looking to get rich with this!

The_Conductor

If you're acting as an agent at all- you need to register with the PSRA- its the law.

The work involved in managing one unit- isn't much less- than the work involved in 3 or 5 units- there is a high amount of background routine admin/maintenance- that has a lower and lower cost per unit- the more units you manage- however, obviously, there is a time and expense involved in managing additional units- and you're looking at something that will keep you busy on a part-time basis.

Also- something to consider- often the agent will get phone calls at antisocial times of the day and night- about neighbours playing music, the toilet being backed up, a hole in the roof, pipes leaking, the cooker not working, the electricity being turned off, fuses blown (all manner of silly silly things- some of which are legitimately the job of the agent to repair/replace/fix- others of which most certainly are not (you'd be surprised at how many tripped fuses you get called to turn back on.........))

Being an agent- is not necessarily a couple of hours here or there- when it suits you- what tends to happen- is you get called when you least expect it- late at night, on a bank holiday, etc etc.

It really isn't for the faint hearted- and it certainly isn't a random couple of hours, of your choosing.

Santa Cruz

kevincastle wrote: »

I take your points above. I'd need to either do it as a very informal thing, where I do not become an agent, just help the landlord, in which case there is not much in it for me except hassle. The alternative is to look at setting up an agency, where I have to get into the regulated world.

Do landlords who have more than a handful of properties (or Agencies) all use software that manages all the bits & pieces: payments, contracts, etc? If so, is this something I could use to help manage larger numbers, and "operate" this as a kind of middle man. Again, I'm not looking to get rich with this!

Have a look at Irish landlord .com It will give you a good view of things from the landlord side. While there is work in managing properties for those of us who are competent, can assess people and get on with them and be organised it's not that difficult.
Where a lot of the "amateur" landlords fall down in management is that they do not treat it as a business. The tenants are customers not friends first and foremost. They have rights and responsibilities. Check out the PRTB website as well

Mrs OBumble

OP, how are you at coping with conflict?

Being a LL is fine when things are going well.

But what would you be like if a prospective tenant chooses shout at you about how you're discriminating 'cos they're <WHATEVER-MINORITY-GROUP> - when really you're discriminating 'cos their previous landlord gave them a poor reference. Or a tenant is consistently lying to you about rent payments ("I'll deposit it tomorrow" - but they don't, or the payment is short). Or a tenant is behaving anti-socially in their neighbourhood and the other owners are calling you about it. Or a tradesman is lying to you about when they'll be there to fix something?


NB I pay a double-digit management fee to my professional property managers, and on top of that there's a fee for each piece of maintenance they manage. But it's worth it for the service level I get.

Ray Palmer

It is a world of pain I would never advise anybody to do. I am effectively stuck doing this for at least another 15 years.
You need to be incredibly patient and diplomatic with every person no matter how unreasonable. They will be unreasonable

You book a plumber and he doesn't turn up. Nobody will care they will blame you. A tenant will at some point no matter what circumvent you and go to the owner, then you have both the tenant and owner annoyed.

The reason the service is so bad for this work is it very difficult to do.

A LL will at some point say they will not return a deposit to a tenant. They will be wrong but you are the one who has to tell the tenant.

As an idea for a job in retirement I can think of nothing worse as you will be on call 24/7 and it is stressful.

Santa Cruz

Ray Palmer wrote: »

It is a world of pain I would never advise anybody to do. I am effectively stuck doing this for at least another 15 years.
You need to be incredibly patient and diplomatic with every person no matter how unreasonable. They will be unreasonable

You book a plumber and he doesn't turn up. Nobody will care they will blame you. A tenant will at some point no matter what circumvent you and go to the owner, then you have both the tenant and owner annoyed.

The reason the service is so bad for this work is it very difficult to do.

A LL will at some point say they will not return a deposit to a tenant. They will be wrong but you are the one who has to tell the tenant.

As an idea for a job in retirement I can think of nothing worse as you will be on call 24/7 and it is stressful.

Disagree completely. If you do the job properly, know how to get on with people, pick the tenants well and have a good teams of support tradesmen it can be done with minimal hassle.

Ray Palmer

Santa Cruz wrote: »

Disagree completely. If you do the job properly, know how to get on with people, pick the tenants well and have a good teams of support tradesmen it can be done with minimal hassle.

How much do you charge?

Santa Cruz

Ray Palmer wrote: »

How much do you charge?

Don't think that's any of your business