An investment group of companies specialising in student accommodation says letting agents can be very important - but it also says some landlords could “go it alone” without professional help.
Mish Liyanage, managing director of The Mistoria Group, says the secret to a successful ‘armchair’ investment is to work with the right partners.
“It is important to buy from a developer with a proven track record; use a letting agent that specialises in the rental sector you are looking to be in, for example student, residential, DSS, commercial or retail. Each of these is a specialist field and if not undertaken by an experienced agent, can lead to the failure of a potentially good investment” he cautions.
However, he then says: “If the property investment is to provide an extra income or a pension, it is best to use an agent. But if you want to be a full-time investor, and have the time to do so, go it alone. Whatever you do, make sure you carry out thorough research, before making any decisions on how you will manage your investment.”
Liyanage believes the key question for property investors it how much control they should take in managing their investment, or whether it should be left to experts.
“Agents’ fees for a yearly management charge will probably equate to two months’ rent. A good agent will have a waiting list of potential tenants ready to move in as soon as the property is vacant, almost paying for their service immediately
"Agents will charge between 10 and 15 per cent to manage your property portfolio. In the case of student lets, it is usually only one to 1.5 per cent of the total yield, still leaving a very healthy nine to 10 per cent cash return on investment each year.
“If you have an agent looking after your property, all you have to do is check your bank account on the first Friday of each month, to make sure your investment yield has paid. You won’t have to worry about obtaining the correct licenses and keeping them up to date; paying utilities; organising repairs; resolving tenant complaints; chasing rent arrears; and providing the annual gas, electricity and PAT certificates.”