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Should I use a letting agent to manage my rental property?

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Say you’ve invested in a buy-to-let London property, or you’ve become a landlord by accident with an inherited place to rent out. Working out how you’ll manage your new role is probably your first big decision.

 

Should I use a letting agent to manage my rental property?

You might decide to place the property in the hands of a letting agent. This option can take many of the stresses of being a landlord off your shoulders, but are such management companies worth the fees?

The answer really depends – on how much time you have to spend on the day to day running of your property, your level of knowledge and how involved you would like to be.

To help you decide it’s worth getting to know the different levels of service you can expect from your letting agent and the pros and cons of using one compared to going it alone.

It’s also important to choose your letting agent wisely – get this wrong and you could find the process even more stressful than managing the rental yourself.

What does residential property management involve?

Depending on the package you opt for, property management services or letting agents keep residential properties well-maintained and legally compliant. They make sure that vacant homes are filled quickly and that tenants find the right properties for them.

Agents can act as the main point of contact between landlord and tenant, helping with everything from collecting rent to managing repairs – their level of input will largely depend on you, your needs and your budget.

The pros of putting your property in the hands of a letting agent

Dealing with tenants

  • They can find tenants for you, helping you avoid the awkward and time-consuming process of showing people around and carrying out credit, background and identity checks.
  • Their experience means that they should be able to find you reliable tenants who will pay their rent and keep your place in a good condition.
  • They can collect the deposit and on-going rent on your behalf; making sure it’s transferred to your bank account and that you receive regular statements.
  • They can also deal with missed payments and re-negotiate your rent.
  • If you want to end the tenancy, the managing agent can give notice to your tenant and carry out the necessary end-of tenancy checks.
  • They can also ensure the place is re-let as quickly as possible, avoiding any loss of rent through void periods.

Dealing with repairs and legal issues

  • With their legal know-how, they can draw up a tenancy agreement for you. They can prepare an inventory and state of repair assessment of your property to protect it from damage.
  • Depending on the level of input you agree, your letting agent can manage the day to day repairs and maintenance for you, helping keep your property investment in good condition.
  • They can carry out inspections periodically and respond to reports of issues from tenants. If you aren’t local, being able to authorise your agent to carry out emergency repairs without bothering you at all could be a big advantage.
  • Property managers will usually have their own contractors and tradespeople to call on if needed – so you won’t have to worry about finding a plumber to fix a burst pipe on Christmas Eve, for example.
  • Agents need to keep on top of the latest legal and health and safety requirements for landlords, so they will make sure your property complies with the law and good practice at all times.
  • And, if you’re unfortunate enough to have problem tenants, an agent can deal with tricky issues, such as eviction, harassment or squatting, on your behalf.

The cons of putting your property in the hands of a letting agent

  • The main downside of using an agent is that you will need to pay fees. These are usually between 5% and 15% of the rental income, depending on the level of service you use.
  • If you have plenty of spare time, live locally to the property, understand the duties of a landlord and don’t mind carrying out maintenance, you may feel you’re paying for things you could have done yourself.
  • Fail to choose the right letting agent for you, and the working relationship might be as difficult to manage as a problem tenant.

How to decide

Think about how much time you want to devote to managing your property. Also, think about how much experience and knowledge you have regarding the practical and legal aspects of being a landlord.

As letting properties becomes ever more complex, the need to keep on top of the latest rules and regulations is growing. You should be able to ask your agent about anything – from gas safety certificates to spotting a fake passport or knowing where to find a good plumber.

Choosing an agent

Get personal recommendations from friends or colleagues. Then get in touch with agents working in your area. Talk to them and make sure you understand the services they are offering and their terms of business.

Be clear about their fees and what will be included in your package. Look for best value, not the cheapest rate – be wary of anyone offering you a bargain to secure your business.

If the agent is managing the tenancy for you, there are certain things they must do to comply with the law. These include safeguarding your tenant’s deposit in a government-backed scheme, so make sure you ask which scheme the are using.

By law, letting agents must also belong to a national approved letting scheme, which will resolve any disputes with tenants. The approved schemes are the Property Ombudsman Scheme, safeagents or the Property Redress Scheme(PRS).

It is also a good idea to choose an agency, which is a member of a professional body; ARLA Propertymark, the National Association of Estate Agents (NAEA) or the Royal Institution of Chartered Surveyors (RICS).

We can help

If you’re not keen on being a hands-on landlord, we can help. Get in touch with us today to find out about the services we offer and our Guaranteed Rent Scheme.

Neil Jennings

Neil background is in marketing and business development and has over 20 years experience in the field. He runs Asset Grove and is involved in the marketing strategy for most of our campaigns.

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