Becoming a Landlord (Choosing a letting agent)
The press is awash with articles about ‘accidental landlords’ or in other words people that are becoming a landlord because they just can’t find a buyer for their property. There are so many reasons for why selling their property is not the best way forward, but that’s another story for another day.
So what do you need to know about becoming a landlord for the first time?
Letting Agents Fees
Fees vary immensely from agent to agent. Most agents offer three distinctly different services to landlords, which are:
Tenant find: This is where the agent finds the tenant and often prepares the contract and then you are on your own
Tenant find and rent collection: This is where the agent finds the tenant as above, collects the rent and passes to the landlord less the agreed collection charge. The agency should handle any pursuit of rent arrears.
Full management: This is where the agent completely looks after the property and organises everything from the property inventory and check in – through to the check-out. The agent also deals with any minor maintenance problems that arise (however you should check the contract carefully to be sure of what it entails).
You need to decide firstly what kind of service you really need and your circumstances may influence this. For example it might not be very easy to self-manage your property and deal with any problems at awkward hours if you lived a distance.
However if you lived very locally, that might not be the case. In fact if you currently reside at the property or nearby, you may even be able to meet potential tents for viewings of your property (because we offer a generous discount to landlords who can assist with this part of the process). Other agents may reduce their letting agents fees if you can handle the viewings process. It also gives you a great opportunity to meet prospective tenants and use that protection device we have called ‘gut instinct’.
Generally high street letting agent fees range from 5% (of the annual rent amount) for tenant find right through to 20% for find and full management. At fishneedwater our best value fee is just £295 plus VAT however you still get a very thorough service.
Things to check with your agent (that may help you decide whom to use):
- Does the agent subscribe to any professional affiliations or public redress schemes (such as ARLA, the NAEA or The Ombudsman for Lettings)?
- Does the agent have a fully bonded client account (to protect your money)?
- Does the agent fully check ALL tenants and provide a copy of the report for you?
- Has the agent offered advice to help you to maximise your rental income and to find the quality if tenant you require?
- Has the agent offered advice on how you can protect yourself against losses made from damage to your property or rent arrears?
- Has your agent explained to you about how you need to comply with law?
- Do you think the fee being charged is commensurate with the service being offered?
Do it yourself (the free way)
There are low cost and free sites that allow you to post your property details to attract a tenant. Unless you are an experienced landlord with tried and tested processes to weed out the potential problem tenants we recommend you steer very clear. Many tenants use these types of website to avoid agents and the credit checking processes. You wouldn’t really want a tenant with a history of unpaid debts renting your property, would you?
You really don’t have to pay through the nose to receive a top quality service. Newer online estate or letting agents can offer very similar (and often as thorough) services to the more reputed agents, albeit at a far lower and better value cost. Ensure you check the credentials of the online agent as you should in fact any agent you intend to use as it’s your property and your money, if things go awry.