How to choose the right letting agent
Choosing a letting agent is a very important decision. If you pick a good one, your rental property will be protected, your income security will be improved and you will be saved a great deal of inconvenience.
If you sign up to a bad letting agent, however, you can suffer a series of issues: bad tenants who may damage the property or not pay rent, unreasonable fees and frustratingly slow responses to your queries. In a worst-case scenario, the letting agent might leave you in legal trouble by failing to meet their obligations to keep the property in a safe condition.
What do letting agents do?
Most letting agents offer three levels of service. The most basic is a tenant finding package, which means the agent will advertise for tenants, conduct viewings, arrange the tenancy agreement and carry out necessary checks on credit history, identity documents and employment status.
The next level up is a tenant finding plus rent collection service, while a full management service means just about everything is left to the agent: finding a tenant, collecting rent, inspecting the property and taking care of routine issues such as leaky taps, broken windows and faulty boilers. The landlord is only involved if a major decision arises, such as whether to replace a faulty kitchen.
The advantage of using an agent is that it saves you time and hassle. The agency will have local knowledge, sector expertise, and contacts that you do not, plus economies of scale may result in savings, for example in repair work. The agent can help you meet your legal obligations to obtain electricity and gas certificates, hold tenant deposits in a security scheme and avoid risks to the health and safety of your tenants.
However, ultimately legal duties remain your responsibility so you should be sure to check you are compliant. If you do not ensure the safety of your tenants, you could face large fines or even prosecution and imprisonment. Taking care of tenants is not just the morally right thing to do, it also makes practical and financial sense.
How to find a good letting agent
You need to carry out research before choosing an agent. Opting for an agent who is a member of a membership body such as ARLA or NALS will give some reassurance, as these agents are bound by a professional code and additional guarantees. Look at how the agent markets properties: where do they advertise? Do they use professional, high-quality photography?
Responsiveness is also vital. If an agent takes time to get back to you, chances are they will do the same for prospective tenants, who may have found an alternative property in the meantime. Carry out an internet search to see if the agent is associated with a long list of horror stories from former tenants, and don’t forget to trust your instincts – if the agent seems untrustworthy, it’s best not to trust them with your investment.
Agents are supposed to always act in your best interests, but unscrupulous agencies will prioritise their own financial rewards over providing a good service. For example, if you use a tenant find service, you should have the opportunity to meet tenants and make the ultimate choice about their acceptance or rejection.
A good letting agent wants to help you find a long-term reliable tenant, whereas a bad agent simply wants to secure their placement fee with the first applicant that comes along. If you set out written rules about your requirements, for example whether you accept tenants with pets or children, smokers or on housing benefit, this will help to keep things clear.
Don’t be caught out by the small print
If an agent seems to advertise properties well, has a good reputation and comes across as professional and polite, you may have found a great service. However, don’t be too hasty to sign up without being crystal clear about their terms of the service.
Many agents use contracts which are heavily weighted in their favour, giving them a get-out clause if they fail to meet their obligations, or imposing unreasonable fees. Renewal fees are notorious for this – the fee that was charged for the work of setting up the tenancy is charged again, each time the tenant renews. You should also know if tenants have to pay the agent anything, as these fees may put off prospective tenants.
Does your rental property have the insurance protection it needs? Talk to Stride Direct about how we can help.