How to use a letting agent
If you are entering the buy-to-let market for the first time, or feel that you won’t have enough time to conduct much of the administration involved in letting a property by yourself, you may want to consider using a letting agent.
You can use them for as little or as much of the process as you want and the fees involved will reflect the amount of work they do on your behalf. For example, some people are confident in their ability to manage the property, but enlist the services of a letting agent to find and vet suitable tenants. Expect to pay around a month’s rent for this service.
This may seem expensive, but ensuring you have trustworthy and responsible inhabitants is the keystone to making property investment work for you.
Note that in the 2016 Autumn statement, the chancellor announced that lettings agents will soon be banned from charging any fees to tenants (they sometimes charge for references, credit checks and immigration status checks). This means extra costs may be passed on to landlords in the future.
What letting agents can do for you
Letting agents will be able to advertise your property and circulate its availability in the local area more effectively than you could on your own. Many also advertise on online property portals, meaning thousands of potential tenants can view your property at the click of a button.
Signing over complete management responsibility to a letting agent will see them take responsibility for a far wider range of activities, from compiling an inventory of the property before the tenants move in, to collecting the rent on a monthly basis. They can also draw up the tenancy agreements and arrange for any repairs or maintenance the property might need.
Whether you choose to use a letting agent can depend on a number of factors. It may be more cost-effective to carry out many of the simpler parts of the process such as compiling an inventory yourself to save money.
If you are just starting out, it may be worth using a letting agent the first time round to see how things are done, before trying it yourself if you go on to invest in more rental properties. Time is a big issue too. If you don’t intend to be a landlord on a full-time basis and merely invest to supplement your income, you may need to delegate some responsibilities to a letting agent as you won’t have the time to be permanently on call.
Convenience could be a factor too – if you don’t live in the area where you are letting property out, it may be difficult to resolve problems quickly. If you do decide to use a letting agent, ensure they are a member of the Association of Residential Letting Agents. This will give you extra peace of mind if any disputes arise.