How to decide on which letting agent to use?

SHARE POST

This guide provides details of potential areas that you need to look at to use a Letting agent.

The Letting Industry has had over one hundred and twenty five new laws in the last five years. Landlords are finding it increasingly difficult to keep up with the ever changing rules and regulations by the Government.

Letting a property to a successful, reliable tenant is the most important part of letting a property. But it can be time consuming. The increasing complexity of legislation and potential hefty fines for non-compliance can provide a huge amount of stress.

There are more restrictions in the current climate including Health and Safety measures that have been introduced to protect all parties involved. Landlords will in future be looking to be party to a Property Redress Scheme if they don’t use a letting agent.

If you are a landlord and you are short on time or don’t live near your rental property. The benefits of using a letting agent can quite outweigh the actual costs. A good local agent who knows the area will be able to rent out your property more efficiently for more rent and saving you time and hassle. You need to pick the right agent and have certain considerations of yourself. But please don’t hesitate to read our article on Rent Guarantee versus Guarantors when talking to a letting agent. Spend some time on your research and there is no such thing as letter forget when it comes to landlords as you need to pick the right partner.

We have tried to outline some guidance and help you to access whether you have the right letting agent for you and try and identify somebody that meets your requirements. It is important that you carry out your own due diligence on the agent and you are protected if anything goes wrong on the transaction.

Is using a letting agent the right path or direction for you?

The lettings market has now become complex and the ever mounting paperwork involved for landlords. We understand that it can take up to 75 pieces of paper with various documents that you have to give to tenants before they even move in. You may want to consider using a letting agent if you don’t have the following:-
  1. Spare time in which to deal with all the paperwork.
  2. You prefer not to deal with tenants queries you would rather have an intermediary between you that you can refer to.
  3. The rental property is a different area from where you live.
  4. You’re a new landlord and not familiar with the private rented sector legislation
  5. You don’t want the stress and would rather have peace of mind if something went wrong
If you did want to manage the property yourself you might want to consider these:-

You really want to keep your costs down to maximise your returns but are you creating yourself an

Issue that could cost you more money at a later date with the ever increasing legislation.

Want to be a hands on landlord and have time to deal with tenants and queries and any problems that may crop up during the tenancy.

Living in the same area.

You have a reliable network of professionals such as plumbers, electricians that you can rely on who will go round immediately.

Are an experienced landlord and keep abreast of all the regulations bearing in mind the 125 different rules in the last five years.

Need to consider both avenues and what you are particularly looking for.

What should I be asking letting agents when thinking about using one?

You have decided that you want to use a letting agent and the next thing is to identify the best agent that meets your requirements. It is always best to research the market and draw up a shortlist before making a final selection. Look at Google reviews and read these through as well as comparing different agents on All Agents. These are the sort of things you might wish to consider:-
What are you looking for from your service? There are three types:-
a) Tenant find only

This is where the agent only finds a tenant for you. Moves them into the property. Deals with the initial paperwork of the tenancy agreement. Any guarantors or reference and then leaves you to deal with them. It is unlikely that they would carry out an inventory for this type of service. Which is a record of what the property was like when the tenants first moved in. You would then have to deal with the registration of the deposit, all the paperwork and with the tenant once they have moved in.

b) Rent collection only service

The agent will also besides the above collect the rent from your tenants on a monthly basis and chase any late payments. The day to day management is up to yourself and the agent would inform your tenant to contact you direct if there are any works that are required. This can give you peace of mind to ensure that your tenants rent is not only paid on time but that they are chasing it if it is late or note received at all. This could give you huge peace of mind and not have to deal with a tenant that is late or a problem.

c) Fully managed service

The letting agent will take care of everything for you from start to finish. So you don’t have to worry about finding tenants or collecting the rent and any day to day issues. Obviously they may report to you any issues if you need and they can bespoke the service to what you want.

It is important that you work out what is the price of your time dealing with your property. If you don’t have the time to manage your rental property or don’t live near it then outsourcing the property to a letting agent makes commercial sense. You don’t want to be in a situation where you get a phone call right at the end of the day. Where you are a hundred miles away and have to try and attend the property late at night. It is something that you need to think about.

Do you want to get a landlord insurance quote? Want professional indemnity insurance? Get a quote from us within minutes (01273) 827090.

Don’t choose an agent just because they are the cheapest, but do ask about fees and check what agents are offering. You should never be influenced solely on price as it is so important picking the right letting agent.

Letting agents fees vary across the country and in different areas. Check what the agents are offering including whether they charge for anything else such as renewals etc. Do they charge a setup fee? You will find often that all agents have some form of add ones that they like to charge landlords but it is not always the case. Sometimes it can be said that you do pay for what you get. Make sure thus that if you do enter into a fully managed service that you are not being charged any extras.

Check that the agent complies with the legal requirements such as membership of a Property Redress Scheme, Client money protection and Deposit Protection.

It is vital that you carry out your due diligence to make sure that your letting agent adheres to the law. In September 2019 London Trading Standards claimed that almost half of letting agents were breaking the law. It is important that you check that your letting agent is part of a property Redress Scheme membership. This has been mandatory since 2014 and landlords should make sure that their agent is member of one of the current schemes. This enables you or your tenants to make a complaint against them through the Property Redress scheme who can make an award against them.

Client money protection has been mandatory since April 2020 and landlords should make sure that their agent is a member of this. It is often known as CMP. Letting agents must ensure that their CMP membership is in their offices and on their website. It is important that they also have professional indemnity insurance and a separate bank account where their money is held.

Tenancy Deposit Protection Law requires all landlords and agents to put the tenants deposit into a Government approved tenancy scheme. It is often the case that landlords are still not aware that they have to put the deposit into a scheme and without it you can be fined up to three times the amount of the deposit where it is not carried out. You can even have problems trying to get the tenant out if you have not put the money into a scheme.

There are different schemes where the deposits can be held and they are normally split into two types thereafter. The insurance scheme where it holds the money but it is backed by an insurance product and the other scheme which is custodial i.e. the money is deposited with the scheme involved.

It is important that you are aware of what scheme they are in and that they comply with the law.

Do you want to get a landlord insurance quote? Want professional indemnity insurance? Get a quote from us within minutes (01273) 827090.

Find out how the agent deals with the compliance that you will need to be involved in with all the private rented sector legislation.

A reputable agent should be fully up to speed with all of the latest legislation. This includes Homes (Fitness for Human Habitation) Act that came in in March this year together with the Energy efficiency standards for EPCs and capital gains tax changes. Since the pandemic has taken place you will find that the Government has listed out a huge amount of additional requirements for agents when dealing with tenants. Make sure that they are aware of the legislation and that they have policies that include it. You don’t wish to choose an agent and then find out that you are on the wrong side of a claim from a tenant. You may find that some reputable agents have a monthly newsletter that updates you on everything that is going on.

What marketing strategies will the agent be using to find new tenants and market your rental property?

Check that your agent has a proactive attitude towards marketing rental properties and that they have a number of strategies to find a tenant. Do they have a good prominent presence on the internet and know the local market.

Marketing for letting agents has changed dramatically over the years so that almost 95% of people now look on the internet to take a property.

Letting agents often rely heavily on word of mouth for their reputation and don’t hesitate to look through their website to see if they give you information on what they do.

Some letting agents will have special cameras and marketing procedures such as 3D cameras together with plans and exceptional photographs. There are always agents that are one step ahead of the market and they may even have tenants on their books already want to see your property. It is important that you understand their marketing procedures and how they let your property for you.

Does your agent know the local market?

It always makes sense to choose a letting agent that is located in the same area of your rental property or at the very least in the same town. Proximity to good schools and transport links that the local agent will know about can help with tenants.

A local agent is more likely to have a reliable network of contractors and deal with any maintenance issues promptly. See what their local knowledge is.

You should always find out how the agent will manage your relationship in future. Do you wish to call him or email and if you haven’t opted for the fully managed service you need to give him instructions of what you need from him in future so that he is aware. Do you wish him to carry out works up to a certain amount especially if there is an emergency rather than worrying you about it?

Once you have chosen a letting agent, check the paperwork. Why is this? You should always make it clear with your management agreement specifying and laying out what the agent has agreed to do for you.

Check the contract carefully and always read the small print before signing it.

Make sure that the letting agent provides you with copies of any tenancy agreements that you need.

It is important that you do your due diligence with your agent especially if you were looking to let the property long term. You want an agent who understands what your requirements are and whether it is income, looking after your property and/or what communication you want in future.

We hope you find the above article useful and if you need a landlord insurance quote and/or professional indemnity then don’t hesitate to contact us.

SHARE POST