Should you get someone else to do the hard work?
In my last article, I discussed the pros and cons of self-managing a holiday let. For balance, it’s only right that I discuss the pros and cons of using a holiday let property manager, as you decide how to maximise the potential returns from your investment.
Why you should use a holiday let property manager
You haven’t invested in a holiday let just to make a pocketful of cash. The point of investing is to give you the money to build the lifestyle you desire and deserve. By using a property manager to manage your holiday let, you retain responsibility but hand over control. While you will need to pay for this privilege, it could pay dividends in several ways.
· Your free time remains your own
If you don’t fancy spending a day or more each week managing your holiday let, then hand this responsibility over to a property manager. You’ll have more time to enjoy the fruits of your investment.
· Your property leverages the manager’s marketing capability
While there are many online sites that help you let your holiday let, never underestimate the pulling power of a good local or national agent.
Because they market in volume, their advertising costs are cheaper. They’ll have big lists of previous clients to market to, and with modern technologies, they can target more suitable clients either directly or via pay-per-click advertising. This is marketing clout that could take years for you to build yourself.
Just two or three extra bookings a year could pay for the costs of using a property manager – then after this, you are ‘quids in’.
· Money management is easier
One of the most arduous jobs of a buy-to-let investor is chasing the money and keeping on top of rents and deposits. Now imagine this task multiplied by 10. A property manager will take deposits, chase staged payments, manage damage deposits, make refunds, and ensure final settlement for you. They will have the systems in place to do all this seamlessly. All you need to do is watch your holiday let calendar fill up and your bank balance grow.
· The day-to-day hassle disappears
Forget about being disturbed at work by a guest wanting to know how to get to the local car boot sale, or wishing to notify you that the water is not running. The property manager becomes the point of call for all day-to-day queries from your guests. They will also arrange to meet your guests, provide them with a welcome pack, and deal with departure and changeover cleans. It is a huge weight off your shoulders.
· Relief from the paper chase
If you are not a paperwork person, this may be a good enough reason alone to hire a property manager. The property manager will deal with booking requests, chase queries, send out contracts, and, most importantly, make sure that all the paperwork is compliant with current law. You’ll never go to bed wondering what you’ve missed again.
· Experience and knowledge counts
A good property manager will have a deep knowledge of the local area. They will have good connections with maintenance professionals. They understand what works and what doesn’t, and offer advice to help you maximise the rental potential of your holiday let. They will also have hospitality experience, take good care of your guests, and ensure the right people holiday in your property. This should help to boost your online reviews and your bookings.
Why you should not use a holiday let property manager
OK, we’ve covered the good stuff. Now for the not so good. The following are the disadvantages of using a holiday let property manager.
· Holiday let property management is not cheap
Your profits may be lower because you will need to pay fees and commissions to a property manager. These fees could be around 20% to 30% of your rental amount. That’s a big chunk of income to lose.
On the other hand, you can offset this cost against your income, meaning that you will pay less tax.
How much you pay (and make) from using a property manager depends upon the arrangement you have with them. You will have to consider how they charge if they have minimum and maximum lettings rates, etc.
· You lose control of bookings
When you use a property manager to control your holiday let, you lose full control of the bookings diary. This means that you don’t get to vet guests, and you may not get to use your property if and when you would like. On the other hand, the property manager makes money by getting your property let, and so it is in their interest to market your property effectively and fill its diary.
Should you use a holiday let property manager?
If you want to keep more of your free time to spend as you wish and enjoy the proceeds of your investment, then using a property manager is likely to be the best option for your holiday let. You won’t have to worry about inexperience costing you cash and bookings, and you won’t need to be on a constant lookout for changes to the short-term lettings law.
On the other hand, if you want the roller coaster ride of self-management, and all the extra responsibilities that come with it, then you won’t select the quieter life of using a holiday let property manager.
When deciding whether you should self-manage or use a property manager for your holiday let, there is always a balance to be struck. That balance is between less hassle with potentially lower profits (property manager) versus more hassle with potentially higher profits (self-management).
To learn more about the advantages and benefits of holiday let property investment, contact Gladfish today on +44 (0)207 923 6100. We’ll be happy to discuss how a holiday let investment might fit in with an existing portfolio or be the investment to help you achieve your lifestyle goals.
Live with passion