Progressive Property PodcastSelf Management Vs Outsourcing
Should I manage my own properties or outsource them to a lettings agency? This might be a question that you are asking yourself, as you start your journey in property. From his fifteen years experience in property, where he now owns his own lettings agency, Kevin McDonnell gives his take on how you should go about it. Whether it’s making sure you get experience self-managing a property, to the benefits of partnering up with an existing agency in a JV partnership, Kevin gives you all the pros and cons of Self-management vs Outsourcing.
KEY TAKEAWAYS
When I start out in property I thought I would have to do everything. When I started I would always do everything from meeting the tenants, gaining references, prepare and write the contracts. I’d do the repairs, and deal with the day to day issues. I thought that was what an investor required. Whereas today I find great deals and my partner manages out the letting agency on a day to day basis.
Learning what the agents need to do. Self-management is a good thing to do at least a small amount. You’ll find out what kind of problems that your tenants have. Your tenants are your clients and you are providing them with a service which you need to provide to the best of your ability. This will also save you on the management fees but cost you in time. This will make sure you have the experience so you know your agent is doing things in the right way.
What sort of systems should you have to self manage? I used for my first ten properties, Microsoft Excel. There are loads of fancy apps, but if you have ten properties you can manage them on a spreadsheet. Just get your first house and manage it on Excel. Once it becomes too big, over ten properties, you should look at things like Arthur or GoTenant. We have now moved on to Jupix because we are running a letting agent, and my JV partner runs that but that’s too complicated and costly for if you are just starting out.
Give your first couple of properties to an agency. Learn how to do it properly, learn how to self manage your property. Then take on property to self manage so you get an inside guide to what they go through. Learn everything that an agency does. An agency does a lot of work from people who say they are interested in that property, lodge the deposit, gaining references and sorting out contracts.
I found a JV partner. I found a local guy who was running a satellite office but he wasn’t on the high street. He was like a virtual agent. I approached him. I asked him to move into the high street into a property that I had bought. He’s 50/50 in the letting agents. I have a JV partner and he gets 50% of the profits.
BEST MOMENTS
‘Its about being smarter with your time.’
‘Be an investor rather than a landlord.’
‘Since outsourcing, I have more time to think.’
‘Make sure you see your tenants as clients.’
‘You don’t need fancy software to manage one house.’
‘Get perfect later.’
‘It was cheaper to manage in house.’
‘The management fees from other landlords pay for the fees.’
‘When you're starting out you don’t have a skillset.’
‘Agents do a lot of work.’
‘You can shadow an agency.’
‘I wanted to be a business owner.’
‘It’s a win, win situation.’
VALUABLE RESOURCES
https://www.arthuronline.co.uk
ABOUT THE HOST
Kevin McDonnell is a Speaker, Author, Mentor & Professional Property Investor. He is an expert when it comes to creative property investment strategies. His book No Money Down: Property Invest talks about how to control and cash flow other people’s property to create financial freedom.
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