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Why is outsourcing so important?

Why is outsourcing so important?

There are number of reasons why outsourcing is so important even more so now due to section 24 it will effect profits and taxes.


A business can increase its profits in 2 ways

  1. Increasing revenues – in this case is increase rents, but this is dependent upon the market conditions.
  2. Reducing costs – this is to mitigate the effects of section 24
  • One of these major costs is the expense of managing a portfolio with a letting agent charging anything between 7-14%+vat


Management –

  1. Self managing – Self-management might save you some money this will make mean your money is no longer passive due to the amount of time & energy that is needed. You would be on call 24/7 and this is not why anyone invests in property specifically to be a hands-on landlord.


  1. Letting agents – Using a lettings agent is the more attractive option but it comes at a high monthly cost and they can be quite unreliable and they may not manage your property the way in which you want.


  1. Outsource under your control – this means that you can outsource the management on a PAYG basis which will lead to a significant reduction of costs. You can retain total control and have your properties managed the way that you want them to be. A PAYG basis would mean that you would pay nothing on a god month, more of a pay as you need basis. Meaning that you would be rewarded for having a well-maintained, low turnover portfolio via reduced costs rather than paying a letting agent a fixed fee every month.


This is not for everyone but for those looking to reduce costs and still remain in control without the headache of self-management this is the ideal way forward

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