Letting agents provide a range of services for landlords that can help make it easier and less time consuming to manage your buy-to-let property - but is it worth it?
The answer depends on your background knowledge, the location of the property to rent, how many tenants you aim to have, and the kind of work life balance you want to achieve.
Letting agent benefits
Here are some of the main reasons to consider using a letting agent:
- They know the legal requirements for private renting and what to do to comply.There is a lot of legislation to get to grips with if you want to privately rent out a property. Letting agents can manage tenancy contracts, deposit protection schemes and safety regulations so you can be confident you're meeting all the necessary requirements.
- They can help with finding tenants. A reputable local letting agent will be a good source of potential tenants and may be able to reduce voids at your property. Letting agents will gather tenant references and make credit checks to ensure you have high quality tenants that fit your criteria.
- They may offer 24 hour support for tenants. A letting agent might have an emergency number for tenants to call at any time in the event of problems - this means no late night calls about leaks or boiler breakdowns for you!
- They can handle routine checks and maintenance issues. Letting agents can arrange inventory checks and ensure up-to-date gas safety certificates etc. They can also respond to tenants requests quickly using their network of trusted tradespeople to undertake repairs and maintenance.
- They can help if tenants go 'bad'. In the unfortunate event that there's a dispute or you need to evict a tenant, an experienced letting agent can manage the situation and advise on the legal processes involved.
It's clear that using letting agents can be a great way to reduce the more stressful and time-consuming aspects of letting a property, but the services come at a price. Letting agent fees usually range between 10 and 15% of the rent depending on the level of service provided.
Most agents offer a range of options from a 'let only' service that simply finds and signs up tenants, to 'full service' options that will fully manage your private rental too.
Choosing a letting agent
If you do decide that a letting agent is right for you, how can you choose which one is best? There are so many high street and online companies all vying for your business it can seem impossible to decide. This checklist should provide a starting point to help you find the perfect partner:
- Choose a member of a professional organisation. The Association of Residential Letting Agents (ARLA), the Royal Institution of Chartered Surveyors (RICS) and the National Association of Estate Agents (NAEA) are the main ones to look out for.
- Go local. A letting or estate agent with many properties in your area is more likely to have the local knowledge to find good tenants and provide efficient maintenance services.
- Style and substance. Is the agent working hard to market their properties? Are the properties they work with in line with your property in terms of rental rates and tenant type? Where are they advertising and how professional do the listings look?
- Ask questions. Find out as much as you can about what's on offer. Ask prospective letting agents about average void periods, the number of tenant disputes they handle and why you should pick them over the competition. You can also read letting agent reviews on sites like Trustpilot, UKlettingagent.co.uk and Allagents.co.uk to see how well they are rated by their other landlords and tenants.
- Understand the costs. Go through the costs very carefully before signing a management contract. Look out for clauses regarding extra charges and be clear on the terms you are agreeing to. Most importantly, will your rental property make enough profit to pay for letting agent services?
If you have time to devote to landlord duties and live locally to your buy-to-let property, it is undoubtedly more cost-effective to let and manage your rentals independently. It gives you more control over costs and allows you flexibility to choose tenants you are most comfortable with.
However, if you decide to take a more relaxed role after establishing your buy-to-let property business, using letting agents to manage all, or part of the rental process, means you can enjoy income from your investments without the day-to-day stresses.
