The Landlord's Life

The eternal dilemma of the small property owner - to manage a property yourself or pass to a letting agent?

Owners of large portfolios have no such problems, as they not "do" personal management.

To actually meet and negotiate with tenants, to hear their stories and see the sum of human frailty - no, that would severely limit time in the sun , race meetings or putting together more property deals.

After all, the art - or science - of good management is the ability to delegate. For those with large amounts of properties, the reward of delegation is sound sleep: not knowing the size, shape or the names of their 10 or 15 per cent of their rent revenues to the letting agent.

Did I say 10 or 15 per cent? Service charges for upkeep of landings, roofs, lifts and "common areas", payable separately, will push costs nearer 20 per cent of rental revenue.

In return, the owners of larger portfolios are not bothered by late night phone calls, panic over lost keys and water pouring down from the apartment above . . . All of which happens with sobering regularity.

Owners of large portfolios literally bank on "capital appreciation" of their properties, meaning hefty profits over, say, three to five years. I define "large portfolios" as owning more than five separate properties, knowing these buccaneers work by rule of thumb, effectively writing off, as allowable tax expenses, one in every five properties as the cost of maintaining the other four.

By the same token, I define "small portfolio" as less than five, which is about the average for readers of this column. Statistics, if you can trust them, suggest the majority of landlords in this property-owning little Republic have about three to five properties.

For the majority of us, it makes sense to manage the places ourselves.

How to do it? Common sense for a start. Bung an advert onto Daft, specify the age and background you prefer "2 bedroom, suit 3 professionals, refs" is your way of saying NO students, NO SWs (Social Welfare) and preferably workers who pay by SO (bank standing order).

Yes, yes, I know it's discriminatory, but we discriminate in every other area of life, and frankly, when it comes to letting, be very discriminatory.

Fix an evening to interview all applicants, have someone with you for a second opinion, take all their phone numbers and after consultation, phone back the ones you like most.

Surprise, surprise, they have found another apartment. Horses for courses, and your ideal tenants have already found their ideal landlord.

Go next on the list, until you find the mutual tenant that suits you. You will need to check references, usually easy, as most employers are happy to provide same for their valued employees.

But they are often not worth the headed paper they are written upon - your instincts are usually a better guide.

Amazing the amount of twenty/thirtysomethings who hold responsible jobs by day, such as "quality controller" and turn out to be absolute raving sluts by night.

Ditto for "financial services executive" who is packaged into a repressive black suit by day and thrashes your apartment for weekend relief.

Relying on printed references will provide you with the full scale of human aberration, until repeated wisdom dawns on you. Instead, use your instincts, as in UUS.

When a tenancy is agreed, read them your version of the Riot Act - no noisy parties, no "friends" staying rent-free for months, no doubling up on the single room.

Utility accounts are transferred into an agreed one name, and ditto for the bank SO, as it becomes unworkable to have two or three tenants claiming they put their share of the rent into your account.

One person must be nominated to collect from others and manage the rent into your account.

As I say, down to common sense. No point in being a landlord without it.

Here is a piece of wisdom which has stood me in good stead over the years: let the place at less than the going market rent for that kind of apartment or house.

Give enough of a discount to have the tenants feel they are getting a bargain.

In return, they are not to bother you with trivial complaints, for instance they pay a glazier themselves for a broken window, the night after the party they were not supposed to have.

That way you might get to lie in the sun and feel there are some advantages to being a landlord, such as being far away with the mobile switched off. 'Quality controllers may turn out to be absolute raving sluts by night'