Very long distance property management. Can it be done?

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    Very long distance property management. Can it be done?

    Hi,

    I have one property in London which is rented out, and I'm about to move out of my current flat and do the same.

    I've been self-managing my 1 bed place for the last 5 years no problem, and have had about 4 tenants in that time. Currently I have a lovely tenant who has been there for about 2 years but the nature of the flat means it doesn't tend to have very long term tenants. It's sort of a starter flat, and after a few years people grow out of it. It's central, small, fairly basic so doesn't need much maintenance.

    The second flat is larger, and would be considered a 'premium' flat in an excellent area, so I'll be charging a high rent, and tenants expectations of quality and response would be high I'd assume. There is much more scope for things to go wrong as there is more stuff in the flat (like integrated white goods).

    For my 1 bed flat I use UPad for tenant finding, I have a BG homecare agreement for the boiler and use a local handyman firm for random repairs. I have not been to the flat for a few years due to health issues, but have managed to get the intercom repaired, numerous electrical jobs done and even helped the tenant with a bird stuck in the chimney! I've always liked choosing my own tenants as I like to meet them and I trust my gut feeling. BG provide the annual gas safe certificate and I protected the deposit (with PI) and keep up with what I need to do.

    I'm now moving to Australia, and I'm struggling to accept that I have to pay 10-15% for each of them to be managed. Does anyone think it is possible to manage them myself from that far away, and is there any way to source a tenant without physically being here? And do you think that with a more expensive flat (it will be over £500 a week) the tenants expect something more that a remote landlord. I've always tried to react as quickly as possible to any tenant issues, regardless of what is going on (including fixing the intercom the same week I had a premature baby!) and don't make my problems the tenants problems.

    The flats are both in highly desirable and easy to rent out areas of London. The actual renting process has always been easy, just a case of advertising and choosing from a few applicants.

    Does anyone have experience of trying to do this for a property they will only see rarely? We will be back from time to time so could check the property and do maintenance, but it's unlikely to be at a nice convenient time to do a tenant changeover or urgent repairs. Or should I just accept that I have to pay thousands due to the distance?

    #2
    It's not property management it's people management as you say. To pick a tenant from overseas it would have to be a paper/telephone exercise rather than your gut as you've used before. Would be easy if you have long term tenants, but as you say one has a high turnover.

    As for using an agent to 'manage' the property, what will they actually do that you can't do? The tenant will be on the phone with a problem, they'll phone you with the problem, you'll authorise chargeable works that they arrange or arrange something yourself.

    You could use an agents 'tenants finding service' but at the end of the day if a T passes checks then they are an ideal tenant and they get paid.
    "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

    What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

    Comment


      #3
      I know that 'management' is little more than call forwarding and expensive tradesmen, which is why its even more galling to pay so much for it! I do a full tenant handbook, and could discuss any idiosyncracies over the phone/skype. Even if it came to having to evict agents won't be much help so I'd have to find a way to do that myself anyway.

      But I do need someone there to physically let in tenants to have a look around, let in inventory clerks etc and handover the keys. That's really all, but it's really necessary.

      Tenant find tends to be 10% (plus VAT), paid annually even if the tenant stays on.

      Comment


        #4
        Originally posted by kmmr View Post
        I know that 'management' is little more than call forwarding and expensive tradesmen, which is why its even more galling to pay so much for it! I do a full tenant handbook, and could discuss any idiosyncracies over the phone/skype. Even if it came to having to evict agents won't be much help so I'd have to find a way to do that myself anyway.

        But I do need someone there to physically let in tenants to have a look around, let in inventory clerks etc and handover the keys. That's really all, but it's really necessary.

        Tenant find tends to be 10% (plus VAT), paid annually even if the tenant stays on.
        Sounds like you need a care taker of some sort or maybe a cleaner who would do the end of tenancy cleaning aswell as being on hand to stand around for an hour or so when needed?
        "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

        What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

        Comment


          #5
          Originally posted by kmmr View Post
          Does anyone think it is possible to manage them myself from that far away...
          I personally do not think this is a good idea. It's certainly possible, but it's not something I would start out to do. I do not often recommend employing Agents, but at least all income is income and that 10% to 15% you can use as an allowable expense. I do not know if it works for you but I definitely feel that 10% sounds a lot, but when you talk in absolute terms it can sound even higher or, hopefully, lower to you... after all, you will be pulling in at least £500 per week. That's not chickenfeed. I think you will get other people saying it's a fine idea and they do it successfully... I just think that I would not. The plus, for you, is that you lived in the property before, so you know how it (everything in it) works and should be able to guide Tenants through all the "how do I?" moments at least (better than any Agent, that's for sure). It's easy enough to say we can all use electronic means of communication... but the time difference could be a practical problem.

          Comment


            #6
            You need to have one or more of...
            a) A reliable and trustworthy capable letting agent
            b) A collection of tame builder/gas-man/sparks/whatever on call as required...
            c) Tenants who will be understanding of your distance away.... more likely if (d), below,...
            d) the attitude to offer immediate gestures (i.e. £££) to tenants whilst problems are solved... e.g. what I do, pretty much £25/month off for almost anything until problem solved.. I do it to engender goodwill..
            e) Luck on your side

            I live in leafy Berkshire & have 3 houses self-managed over 500miles away, each way, 10hr drive, in the Scottish Highlands: Done it for 10+ years, but it can be painful. Just driven half-way, in hotel, massive gales, snow, drifts forecast for tomorrow, all trains to where I need to be cancelled... I'll probably go back home tomorrow.. Ho hum, still, expense is tax-deductible...

            Occasionally (but rarely..) I've needed to go up there for extended periods: But then I'm retired...
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

            Comment


              #7
              Don't forget you will be liable for 20% tax paid from your rent directly to HMG before it can (legally) be transferred to you in Oz.

              Either your tenant or your agent will have to do this.
              I offer no guarantee that anything I say is correct. wysiwyg

              Comment


                #8
                Personally, not worth the possible grief.
                I would sell up and buy somewhere in Oz within easy commuting distance for you.
                Another long suffering LandLord

                Comment


                  #9
                  I thought you might say that. I think it's possibly possible for the little flat, but the big one will have all those first time niggles that you don't see as an owner occupier.
                  I'll just pick an agent that doesn't seem too evil!

                  The agents for the smaller flat said they would slightly discount the £200 application fee for my tenant, since he was already in place. Is it just me who thinks changing an application fee for an existing tenant is just crazy! There is zero admin involved. I told them any fee would be paid by me, but since they get 15% for doing exactly nothing I'd expect it to be waived. See, I'm already annoyed by them!!

                  Do you think we could claim flights back as tax expenses? Serious question since checking the properties will be a major reason. We are just keeping them until we are ready to buy in Oz, which could be a couple of years away.

                  Comment


                    #10
                    Originally posted by kmmr View Post
                    Do you think we could claim flights back as tax expenses?
                    No, if you are using an agent. If you do claim you would have to prove that you only came back to sort out the property, not visiting relatives etc.

                    You also need to provide your tenant with an address in England/Wales so that they can serve any notices.

                    We lived in Oz for a couple of years and rented out our home. Didn't even consider not using an agent. We had full management and they only contacted us for expensive repairs to the boiler.

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