The letting agent you pick for your buy-to-let property could have a big impact on your landlord experience. Follow our top tips to choose the right one.
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Choosing the best letting agent
While a bad letting agent could cause you lots of extra stress, a competent letting agent should make your life as a landlord much easier.
A good letting agent should market your property proactively, find you the right tenants, and handle the rental paperwork, all for a reasonable letting agent fee. If you choose a management service, your agent should also capably deal with any day-to-day rental issues.
Follow these seven steps to choose the right letting agent.
1. Decide on the services you need
First up, think about what level of service you’re looking for: tenant-find only, or property management?
Tenant-find only means that the letting agent will find the tenants and deal with the initial rental paperwork, but then leave you to manage the property yourself. They may also be able to collect the rent for you.
If you opt for property management, the letting agent will find the tenants and then deal with any day-to-day issues on your behalf for the course of the rental. For example, they’ll arrange for any maintenance issues to be fixed, and organise property inspections.
The option you choose will depend mainly on how much time you feel you have available to manage your rental property, and how involved you want to be on a regular basis. Bear in mind that if you live far away from your rental property or you’re often out of the country, it may be difficult to deal with issues yourself.
2. Research local letting agents
Once you know what you’re looking for, it’s time to draw up a shortlist of possible letting agents. Take a look at online listings, check forum discussions, and ask other local landlords for recommendations.
It’s worth checking whether agents are well-reviewed by tenants as well as landlords, as a poor experience with the letting agent could discourage a tenant from remaining in your property, or even from renting it in the first place. You can find agent reviews by location or agent name on the allAgents.co.uk website.
Next, speak to the letting agents on your shortlist to see if you get a good impression. Ask them how long properties are currently taking to rent, and whether they have any tenants on their books who are looking for a property like yours.
3. Compare letting agent fees
Of course, price is also an important factor when you’re choosing a letting agent. UK letting agent fees vary, but expect to pay somewhere around 10 per cent of the monthly rent for a tenant-find only service, and around 15 per cent for full management.
Bear in mind that as of June 2019, letting agents will be banned from charging fees to tenants for things like inventories and referencing. They may try to recoup their losses by charging landlords more, for example in the form of a monthly subscription charge. When you’re comparing letting agents, ask them about how they intend to deal with these new rules and whether you’ll pay any extra letting agent fees as a result.
4. Check memberships
Also find out if the letting agent is part of an accreditation scheme like the National Approved Letting Scheme (NALS), or a member of a professional body such as ARLA Propertymark. Accreditation or membership will mean that the letting agency meets certain standards and should comply with particular codes of conduct.
5. Review money protection schemes
The law requires landlords and letting agents to put tenants’ deposits in a government-approved tenancy deposit protection scheme. Ask the letting agent about which scheme they use to make sure they’re complying with the rules.
And as of April 2019, all letting agents in England that hold client money must belong to a government-approved client money protection scheme (CMP). There’s a list of approved CMP schemes on the government website.
Letting agents must have a certificate confirming their CMP membership, and display it prominently in their offices and on their website. The new rules also require letting agents to hold client money in an account with an FCA-authorised bank, and to have appropriate professional indemnity insurance in place.
If you can’t see evidence of the letting agents complying with these rules, ask to see their certificates.
6. Look at marketing strategies
Ensure that the letting agent has a proactive attitude to marketing rental properties, and that they will use a number of strategies to find tenants for your house or flat.
Check their property listings on a property portal like rightmove to see if they market rental properties well, and to see whether they’ve successfully rented out many properties in your area recently.
7. Ask about your future relationship
Lastly, make sure that you’re happy with the way the letting agent will deal with you as a client. These are a few things that are worth checking.
Some letting agents are only open during weekday working hours, which could be an issue for you as a landlord and for tenants and prospective tenants. Ask whether anyone at the agency will be available during evenings and weekends.
Confirm with the letting agency how they will handle rental-related paperwork, such as references, credit and employment checks, and tenancy agreements. For example, will they give you the chance to review any references they receive for prospective tenants? As long as they get the tenants’ agreement, they’re legally allowed to do this.
Repairs and maintenance
If you’ve chosen a management service, ask the letting agent how often they carry out inspections, how the tenants can contact them if they have a maintenance issue, and if they have a panel of trusted tradespeople who they use.
Speak to the letting agent about how they will handle the rental finances, including the rent received and costs and fees: how often will they transfer balances to your account, and will you need to provide a “float” to pay for any maintenance issues?
It’s important to find out how long the letting agent’s notice period is so that you know what happens if you want to end the relationship. Most letting agents require two months’ notice in writing to end a rental management contract.
Next steps once you’ve chosen a letting agent
Once you’ve picked your perfect letting agent, check the contract carefully before you sign it. In particular, look at the fees and the termination clauses. Keep a copy of all the paperwork, including the agency agreement and any correspondence.
Also make sure that the letting agent provides you with copies of the signed tenancy agreement, and any other important paperwork. They should also give you copies of receipts or invoices for any work that they organise.
What do you think makes the difference between a good and a bad letting agent? Tell us in the comments below.