Research from the Council of Mortgage Lenders shows that 60% of landlords have a portfolio of just one property, while 7% own five or more properties.
But how big can a portfolio get before it starts to take over a landlord’s life?
In our experience, the amount of spare time a landlord has dictates the number of properties they operate.
Research from the National Landlords Association reveals that 27% of its member landlords say they make a full time living from their lettings business, and that 55% say it supplements their day job.
According to developer and landlord Richard Blanco, up to four properties is ‘manageable’ if you’ve also got a full-time career, although not if they are Houses of Multiple Occupancy, which can be much more time consuming.
Richard says the tipping point when a lettings business starts to become more labour intensive is six properties. “My rule of thumb is that I would expect four issues per property to arise every year, so 6 properties would generate 24 issues plus at least one tenant changeover a year,” he says.
“The main challenge with having a larger portfolio if you self-manage is trying to carve out time away from work. It’s not uncommon to land on some far away shore relieved to be away from it all, only to receive a flurry of repairs emails from tenants.”
Richard says his business model is to buy wrecks at auction, refurbish them to a high standard and then let them to professionals or working families.
“I find this reduces the likelihood of issues and churn between tenants that I could get if I let properties by the room,” he says.
“I have mostly Victorian houses and they do tend to throw up repairs a little more often, though I know newbuild flats can throw up just as many problems.”
At KFH we believe this is where a professional letting agent can add value, particularly for those who work full-time but need a helping hand to manage their growing portfolio.