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  • Buy-to-Let

    Processes landlords can out-source/save time



    I thought it might be useful to put together a list of processes which landlords can outsource to third parties.  I am sure my list is non-exhaustive, so I would welcome all other suggestions so that we can community-generate a really useful list.

    One thing landlords are not great at is putting a value on their own time.  If you are driving an hour each way to visit an investment property, you should put a value of your time on that and work out if that is the best use of your time.

    “The great dividing line between success and failure can be expressed in five words: “I did not have time.” Franklin Field

    Out-sourcing can ensure you spend time on the things that are most going to advance and benefit your business.

    You could perhaps use that time to source your next deal, or chase some rental arrears, or attend a training course to improve your property knowledge.

    The important thing about outsourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” Azim Premji

    Outsourcing can help you scale up a property business more quickly, and put you into a position where you can work on your business, not in it.

    1.  Cleaning

    Taking up a mop and duster is not a great use of a landlords time.  If you have an HMO, it would be a wise idea to employ a cleaner to go into the communal areas every two weeks and give them a thorough clean.

    The cleaner can also be your eyes and ears at the property and also report any minor repair issues that may not have been reported by the tenant.

    In-between tenancies, you should take the opportunity to give your property a very deep clean, including carpets.

    A good cleaner is worth their weight in gold, so pay them promptly to ensure you keep them!

    2.  Viewings

    Landlords can use Viewber (person who undertakes to attend a property to give access) to visit their properties, if they are not able to attend themselves.

    10 instances for outsourced property viewings

    3.  Gardener

    If you have an HMO, it might be prudent to have a gardener visit the property once a month for a garden tidy.

    If a property is rented out as a whole dwelling, your tenancy agreement should lay out the landlord's responsibility with regards to maintenance.

    You may find it worthwhile to send a gardener around once a quarter to do a garden tidy and this would have to be included in the tenancy agreement, with the tenant agreeing access for gardener.  You may also want to reflect this additional service in the rent.

    4.  Lettings and property management

    This is the main outsourced service used by landlords.

    There are typically three levels of service:

    i.  Tenant find

    ii.  Tenant find and rent collection

    iii.   Fully managed

    Our lettings partner, Northwood, offer a 4th level of service and that is Guaranteed Rent. 

    Mary Latham, landlord of over 40 years, said:

    "A Letting Agent is worth 10% of my annual rent to get back 90% of the time I spend on my properties".

    Love this quote by Mary Latham ... but do you agree with it?

    There are a number of on-line platforms that provide pure property management or services that you can "pick n' mix" to suit your individual circumstances.

    Newbies starting out would be well advised to use a fully managed service undertaken by a reputable agent, as that agent will help ensure compliance.

    How to vet a lettings agent ... 12 questions to ask

    5.  Property maintenance

    You can use Checkatrade to find a reputable tradesman to undertake maintenance on your property.  This could include painting and decorating, re-grouting and tiling a bathroom, fixing a leak, undertaking repairs, etc.

    A rental property will also need a minor refurbishment facelift every 5 to 8 years to keep it in good condition and attractive to tenants.

    6.  Tax return

    You can prepare you self-assessment tax return yourself, but I have always used an accountant to do this, ever since I went self-employed in the TV industry in 1997.

    I use an accountant for two reasons - 1. because tax makes my eyes glaze over, and 2.  because an accountant can ensure I claim all the allowable expenses I am use to mitigate my tax liability.

    7.  Virtual PA

    You can use the services of a virtual PA to run your diary, organise meetings, travel, etc. and assist with other tasks such as taking phone calls if you are away on holiday or in meetings.

    8.  Undertaking an inventory

    I was talking to one of the Directors at landlord association iHowz and he said "I believe the inventory is a more important document than a tenancy agreement".

    I agree that the inventory is one of the most under-valued processes as far as landlords are concerned.  You can commission an inventory clerk to undertake a check-in and check-out inventory.

    Importance of the inventory in TDP

    No inventory? You are giving your tenant an unfair advantage!

    This one picture will convince of the value of an inventory and inspections.

    9.  Serving notices

    You can of course serve notices like Section 21's and Section 8's yourself.  However, if you get it wrong and it goes to court, the judge will throw it out.

    The Residential Landlords Association offer the service of filling out the forms for you.  You can enjoy 25% off membership of the RLA through being a member of Property Tribes.

    Landlord Action also provide a 3 stage fixed fee eviction process to help landlords gain possession of a property from a delinquent tenant.

    10.  Sourcing and fitting new appliances

    Property Tribes Appliances has a bespoke service for landlords where we liaise direct with the tenant to arrange installation of a new appliance.

    Call Tim at Property Tribes Appliances on 0203 488 1391 for all kitchen appliances, including some brands that come with a 5 year parts and labour warranty.

    Conclusion:

    While there are certainly a number of advantages to outsourcing, there can be disadvantages such as cost, level of competence, consistency of service, and quality of work. Property owners and landlords need to carefully evaluate their situation and look at the pros and cons of each solution, before deciding.

    Checking independent reviews of the provider, and also doing some due diligence on them will help mitigate risk.

    You should also give each contractor a clear understanding of what you expect, and set standards and clear levels of service you require.  They may be interacting with your tenant, so you want to make sure that they are respectful towards your tenants, and treat them as you would yourself.

    How do you put a value on your own time and do you have any other suggestions for other things landlords can outsource to a third party?

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    11.  (although should be number 1)   work with a specialist and independent financial adviser to check your finances, borrowing and underlying funding costs are correct and in order.  A DIY mortgage arranger costs in time, in access to market and in costs and charges. 

    So many DIY product transfers (because it's perceived as easy and quick - but count the actual cost, we do when we are instructed to troubleshoot) are costing the borrower thousands over the odds when much better value can be sourced and secured   Also outsource the debt protection too. 

    The online comparison sites do not tailor specific and personalised solutions nor do they recommend and arrange the protection trusts either.  Another false economy.  Two more points (I could go on :-) ) - ensure correct mortgage is in place. 

    If a property is let out on AirBnB, the likelihood is that the mortgage in situ is being breached.  Also for residential mortgages where no consent to let is in place.  Also for HMO's where just a BTL mortgage (with single AST as part of the criteria) is in place. 

    And finally, landlord insurance - not just 'normal' house insurance - needs to be in place too.   Don't stick to the wrong mortgage or insurance because it is thought to be 'cheaper' than the right arrangement.  Another false economy - especially when claims will be invalidated, when the lender calls in the debt, when the tax man catches up with those non declared incomes.

    So, what processes can landlords out source and save time with? ....  Work with (what Vanessa calls) the Power Team and ensure the right (experienced, qualified and authorised) professionals are working for the landlord - time, money and profit saved and made all the more efficient and viable.

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    Thanks for commenting Howard.

    I did consider including mortgage broker, but it didn't quite fit my view of outsourcing, although it was borderline. Smile

    Mortgage broker, solicitor etc. fall more under professional services where you pay for expert advice.

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