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Surviving the ‘crunch’

Toby Hone is a full time UK Landlord and Property Investor and Author of“The Landlords Guide to Surviving the Credit Crunch”. In this article he shows Property Hawk landlords how self management is one of the key strategies that landlords should employ to help them survive the “Credit Crunch”.
Where do professional landlords go for their landlord insurnace?
Times are tough!
Times are tough I hear you say! And indeed they are! The best buy-to-let re-mortgage rates around are up to 30% higher than what was available last year and the threat of interest rate increases to reign in inflation may push mortgage rates even higher!
Many landlords may be wondering how they are going to cope with such large increases in their buy-to-let mortgage costs, and for those landlords lucky enough to perhaps have a rental coverage of 130%, this will likely fall to just 100% when you re-mortgage.
Save over 32% of your total annual rent
The simplest solution is to Self Manage your residential investment portfolio. I can show you that by doing this you can save in excess of 32% of your total yearly rent! So when it comes to re-mortgaging you should be able to protect your rental profit, rather than see it go straight to the bank in higher mortgage repayments!
Landlords – save money – save – 4 brokers – 1 SIMPLE FORM
For those landlords who do use letting agents, either because they have to or because you don’t want to get your hands dirty managing a portfolio, the next few paragraphs may come as a shock:
The biggest saving to be made by self management is that you won’t have to pay anyone a 10% management charge. After all it does not take a degree in rocket science to get a standing order set-up between your tenant and yourself to receive the rent! For those landlords that don’t mind dealing with tenants directly, but just need an agent to find you a tenant – you’re giving away in some instances, and depending on your tenant turn-over rate (i.e. how often tenants move out of your property) up to 10% of your rent in finders fees. It is not difficult placing a £30 classified ad looking for tenants – have a decent telephone screening process and set-up a specific date and window of time (1 hour) to arrange all viewings. Easy as pie!
Well you may be saying; ‘’what about the other things that agents do?’’ What about them! An agent will charge you up to £250 to do an inventory and take pictures. Why don’t you do it on the day you check in your self found tenant! An agent might charge you £100 fee to provide you with their legally safe Assured Shorthold Tenancy, which you can obtain for free on the internet! Oh, and an agent will normally charge you for the privilege of dealing with them, which they call a set-up fee and these can be as high as £100 per tenancy. There is also the fact that letting agents won’t feel the pain of having your investment property sitting empty (or more commonly termed a void) nearly as much as you will having to pay a buy-to-let mortgage on the investment property! In mine and other landlords’ experience, you can expect at least 1 month of void periods when using agents for high tenant turn-over properties. What about repairs and maintenance? Letting agents may often include a commission on top of your bill for their efforts in getting a contractor to do the work – so expect to pay over the odds for any repairs and maintenance. Another charge that you may overlook when dealing with letting agents is that they will often charge you if a tenant renews their tenancy! Yet more money that you the landlord are giving away!
Getting the tenant to pay
There is one other thing that you may find might tempt you to self manage and that is that instead of paying a letting agent to do all the things above, why don’t you as the landlord charge your prospective tenant a fee. In most cases the letting agent would do this as a matter of course anyway.
Therefore in return for you the landlord: providing a tenancy agreement, producing an inventory, performing a credit check on the tenant, and for the time taken in conducting the viewing; you are entitled to charge your tenant an admin fee. Depending on the area in which your investment property is located a landlord can justify charging a fee of anywhere between £150-250 per tenant.
In my book I show landlords how you can save up to 32% of your gross rent by self managing! This should be easily enough to get landlords through any anticipated rise in their mortgage costs. Therefore for landlords that have a long term fixed rate which is coming to an end resulting in a big jump in their costs – then perhaps the incentive of making 32% extra on your net rent will be enough to persuade any landlord to dispense with the services of their letting agent, take back control and ensure that they survive and prosper despite the turmoil of the “Credit Crunch”.
This article has been provided by Toby Hone, a full time UK based property investor and landlords and author of a book titled: The Landlords Guide to Surviving the Credit Crunch. The book is aimed at providing landlords of all experience with essential and practical advice on how to survive the credit crunch and looks at the 5 key areas that landlords need to target. To purchase the eBook visit
Disclaimer – The information and services provided by the Property Hawk website ("Website") does not constitute legal, financial, investment or tax advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser prior to entering into any binding contracts.

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