Using a Letting Agent
What do letting agents do?
Letting agents typically offer three levels of service:
1. Finding tenants and arranging the let
(For a one-off fee, a letting agent will find tenants for your property. Once you have found some potential tenants, they will also collect references and do credit checks, collect deposits, and draw up tenancy agreements and inventories. The fee will be negotiable, but it can be anything up to a month’s rent).
2. Rent collection
(The letting agent will collect the rent from your tenants each month and chase any late payments. A typical fee for this service is 5% of your monthly rent).
3. Full management
(The letting agent manages all aspects of the rental, not just the rent collection but also dealing with any queries and sorting out maintenance and repair work. You can typically expect to pay between 10% and 15% of your monthly rent for this service).
Should I use a letting agent?
Many landlords manage their property entirely on their own and do it very well. But others find it far more convenient to use a letting agent.
Considering what your landlord responsibilities are, and whether you feel able to manage all of them alone, will help you to figure out whether you want to use an agent or not.
Consider managing your property yourself if:
- you really want to keep your costs down
- you will have the time and energy to deal with tenants’ queries and problems
- you know reliable professionals, eg plumbers and electricians, who you can call on to help you with any problems
- you are up to date on current regulations that affect landlords
- you want to be a hands-on landlord
- you live close to your buy-to-let property
You may want to use a letting agent if:
- you do not have a lot of spare time
- you would prefer for someone else to deal with tenants’ queries and to handle any problems
- you are new to being a landlord and want some professional help
- you do not have a good awareness of relevant regulations and legislation
- you are letting property out in a different area from where you live
How to choose the best letting agent
If you do decide to use a letting agent there are a number of key things to look out for:
1. Is it a member of a professional standards body?
The main ones are ARLA (Association of Residential Letting Agents), UKALA (UK Association of Accredited Letting Agents) and NALS (National Approved Lettings Scheme). To be a member of one of these schemes, the agent must adhere to minimum standards. It will also have Client Money Protection (CMP) in place, which means that, in the event your agent goes bust, the scheme would cover your losses.
2. Get a recommendation
Speak to experienced landlords you know, and find out who they use and what they look for in a good letting agent.
3. Find an agent that is experienced in letting property like yours
Choose an agent that knows the local market for your type of property inside out. This way, it will know how to attract the right tenants, and be able to advise you on things like setting your rent at the right level and getting your property up to standard.
An established agent is also much less likely to run into financial problems than one that has only been operating for a short time.
4. Price isn’t everything
Although of course you want good value for money, a rock-bottom fee may mean the agent is looking to cut corners. Poor service from an agent could cost you more money in the long run if it doesn't keep on top of maintenance or annoys your tenants so much that they move out.
5. Mystery-shop the agent
Call the agent or even go into a branch posing as a would-be tenant. See how it handles your enquiries – keeping your tenants happy is vital for ensuring a steady stream of rent, so you want an agent that will offer them good customer service.
Credit: M. Kemplay - which.co.uk