What are the benefits of using a letting agent?16/09/20
Not all of the UK’s estimated 2.6m buy-to-let landlords use a letting agent to help them manage their properties.
However, if they do, they are usually rewarded with less hassle and stress as they juggle their lives, tenants, properties and legalities which come with the job.
While some landlords prefer the hands-on approach, many use a letting agent.
They may not have the spare time to be able to deal with what can be a time-consuming business, or they may feel a letting agent has a better grasp of what is involved.
Of course, as a landlord you may not necessarily live in the same area as your rental property.
Why use a letting agent?
- They can deal with tenants’ problems and questions on your behalf 24/7. You don’t have to be on hand all the time (this is especially useful if you are in a different geographical location than the property).
- They will have excellent relationships with traders and professionals like builders, plumbers and electricians, who may have to make urgent repairs to your property.
- The letting agent will find suitable tenants for a property on behalf of its owner.
- They will also complete referencing, inspect or maintain the property throughout the tenancy and maybe even chase up arrears on your behalf.
- You can tailor just how much you want to use a letting agent. For example, you could pay a one-off fee for them to find you a tenant, or you may want them to provide the full service. The choice is yours.
Of course the ultimate responsibility and liability of a property comes down to the landlord, even if they use a letting agent to manage their property.
How does it work?
The letting agent visits the property to work out how much you should charge the tenant.
This valuation is usually done for free, and it is up to you and the agent to agree on the rent.
Once that is done, the agent will advertise the property.
This can be achieved in numerous ways; they can advertise the property in an estate agent’s window, complete with attractive photography and floor plans, place ads in newspapers and magazines - both local and national - and feature it on property websites.
You don’t even have to meet prospective tenants, because the letting agent will do it for you. This makes things less personal.
Imagine if someone came along that you knew? Or someone you felt sorry for?
You might feel that you have to accept a lower rent, while an agent can negotiate in a professional way.
They will show prospective tenants around the property and inform you of any interest shown or offers made.
They can act as a go-between during negotiations before a tenancy agreement is signed.
For example, would-be tenants might try to offer a lower rent or ask for extra furniture to be provided.
Once you and the prospective tenant have come to an agreement, the agent will provide a tenancy agreement - a legal contract - for both parties to sign.
All of this can usually be done through the agent by phone or post, so there is no need to visit the property or meet the tenants (although you might want to).
A letting agent’s most basic job is finding tenants for your property and, because they have the expertise, it’s in their interests as well as yours to do the best job possible.
They can also arrange and attend viewings, conduct any referencing or right-to-rent checks, set up a tenancy agreement, and can even create an inventory of the property for accurate and fair deposit deductions at the end of rental period.
If you only choose this service, you will be able to find a tenant to rent the property then manage the ongoing aspects such as rent collection, maintenance, property inspections and deposit disputes yourself.
Probably one of the most stressful jobs you’ll have as a landlord is rent collection.
Sure, many tenants pay of time, but if you get one who doesn’t, or falls into arrears, then you as the landlord may find yourself in a situation where you have to confront them with a demand for money.
If you use a letting agent, the money is taken care of; they can do all the necessary rent collection on your behalf as well as chase rent arrears, serve notices or advise you about the tenants who don’t pay.
Some will even offer insurance that protects your income if the tenant is in arrears.
This is the Rolls Royce of letting services where you can expect much of the work to be taken out of your hands totally.
It usually includes:
- Finding the tenant
- Collecting and protecting deposits
- Referencing tenants
- Collecting the rent
- Preparing the property
- Booking and attending viewings
- Corresponding with a tenant directly throughout the tenancy
- Organising maintenance and repairs
- Inspecting the property
- Negotiating contracts and agreements
- Inventory creation and deposit disputes
- A tenant vetting service, which could include taking up references or a credit check on prospective tenants, carried out in-house or by a sub-contracted company
Which service do I need?
Find me a tenant
If you are only renting one or two properties and live close by the chances are you won’t need the full service - although of course you can choose to have it.
You could just engage the letting agent to help you to find a tenant and then opt to use a rent collection service if you don’t want the hassle of having to chase payments.
A fully-managed service will be of benefit if the property you own is at a distance from where you live.
For example, if you live abroad for all or part of the year, or you may have a large property portfolio that means you cannot manage every single property yourself.
These will vary, but agents will usually base their charges on a percentage of the monthly rent.
Fees for agents can range from below 10 per cent of the rent to above 20 per cent, depending on the service.
Full property management can cost anything from 12 to 20 per cent of the total rent, depending on the area and which managing agent you choose.
Spending money on a letting agent may even save you money in the long run because your property shouldn’t stay empty for too long and it will certainly save you something equally precious: time.
To find out more about how a letting agent can help you as a landlord, get in touch with us at growproperty.co.uk