There are plenty of ways to choose a letting agent depending on what type of service you want or need. Some landlords like to be very hands on and learn the process themselves, whilst others just want the rent paid and the letting agent to handle the rest.
Here are 5 tips on what you need to know.
Tip 1: Fees
If you are a DIY Landlord that wants to handle the viewings, referencing and the move in process, then I would recommend an online company that uses the property portals such as Rightmove and Zoopla. You pay with OpenRent about £30 + for advertising the property, you will then have to deal with the pre-qualification, viewings arrangements, documentation, and compliance before referencing your tenants. Then afterwards the move in process. This is fine if you have the confidence, the time and you know what you are doing, but for most, if you have a day job then it is better to invest in the professionals.
A Professional High Street Letting Agency will usually be more expensive and charge for things such as tenancy setup fee, viewings, the lettings fee, referencing and putting it into a whole package. For a Finder’s Fee, this should be approximately £500-£1500.
You are paying for the agency to collect all the information, and the viewing process, go through the tenant’s financial credibility and affairs, and then put their application through referencing before making sure you as the landlord are compliant prior to the move in. Once the tenants have moved in, you should receive all the paperwork so that you can manage your asset.
If the agent is managing the property, then again, depending on the level of service, you will be paying approximately 7% – 15% of the monthly rental.
If you want to get more into the fees, then check out my blog on How a letting agent charges a fee.
Tip 2: Professional Bodies
Some agencies invest in themselves and align themselves with ARLA or NALS. Be aware that agents invest heavily, and it is generally quite a lot of money to be part of these professional bodies, there are courses online that agencies can do to make themselves compliant.
Unfortunately, the property rental industry is not very well regulated, and anyone can open their doors to become a letting agent, so being a member of a professional body does show that an agent works to a set of standards and has professional knowledge of the sector. The agency and its staff will have to pass tests to make sure they have achieved certain levels.
Please note that this does not necessarily mean that the agency is a good agent, even after they receive their results, they can still choose bad tenants and still have tenants that do not pay rent, it does not safeguard against these mishappenings but does mean that an agent has invested in their industry regulatory bodies to achieve a level of compliance that is recognised.
Tip 3: Location
I advise choosing a letting agency within a 10-minute drive away from the property, maybe even less if there are enough around. So if the property is in the Romford area, use a Letting Agent based in Romford, which will allow you to benefit from their local knowledge.
In addition to local knowledge, a negotiator at a letting agent more often than not earns a commission for every successful property rental, usually between 4%-10% of the total agency commission. As an example, if the commission of the agency is £1,000 for finding a tenant then the negotiator will be earning a portion of this, let’s say it is 7%, then it is £70 to the actual agent working within the agency.
Why is that employee going to waste his petrol and time to ‘maybe’ rent your property out for his £70 commission, it is a lot of work for something that doesn’t get rented straight away, whereas if it is within 10 minutes away and on his way home from the office, there is more chance he will go there more regularly. It must be the same with inspections and managing builders if they are also managing the property. So, the location of the agency is extremely important.
Tip 4: Reviews Online
You wouldn’t book a hotel or a restaurant without first looking at the reviews online. The same goes with a letting agency, you get good and bad letting agencies. I advise checking out the online reviews to make sure you see the experiences that other people have dealt with.
Tip 5: Expertise
Being a landlord is a huge thing, most people do not get to even own their own property, let alone a 2nd property, therefore, you need to protect this asset and do your homework.
Invite at least 3 agents round and even before that I would be bending their ears over the phone first. Do they know their onions?
Ask these questions:
• How do you look for your tenants?
• How do you vet your tenants?
• What paperwork do you collect? Or do you just leave it to the referencing company?
• Do you offer Rent Guarantee or Rent Protection Insurance?
• How does a tenancy qualify for this? What does the Protection Cover and how do I get paid out?
• What documents do I need to be compliant?
• What happens if my tenants do not pay rent? What is your process?
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