Letting Agents – Should I use them?

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Letting Agents, Should I Use Them?

Although down to personal preference as some landlords make effort to avoid them, with others not being able to do their job without them – should a letting agent be used?

There are many benefits to using letting agents. One of the great things about them is they manage many of the trickier and lengthy aspects of tenancies which it can be said landlords would rather not deal with. However, for those new to letting properties or those just a little unsure, it can be a minefield finding the correct letting agent. This handy guide from CIA Landlord Insurance may prove helpful when laying out the basics.

Photo by Toa Heftiba on Unsplash

Who benefits from a letting agent

Landlords who benefit from a letting agent are ones who have a large property portfolio to manage and who may struggle to find the time to keep all their balls in the air, so to speak. A lot of landlords do not live close to where their rentals, which a more local letting agent would prove beneficial to keep tabs on their tenancies.

Letting agents can work well for first-time or inexperienced landlords, where opting for a letting agent provides much-needed security and support. This proves particularly useful when needing to keep on top of all the relevant regulations and legislation to prevent anything going wrong or getting missed.

Many landlords however prefer to take full control and handle the in’s and out’s of the tenancy process themselves. If this is the case, a letting agent is rendered fairly useless and would be a waste of money and resources, as letting agents are not cheap.

What letting agents do

With different levels of service available, deciding on one which meets your needs can become confusing without research. Is it a ‘let-only’ you require. A ‘tenant-find’ or a more comprehensive fully managed service for your property?

The two primary categories which can be expected are ‘let-only’ and full management service. A ‘let-only’ service requires the letting agent to take responsibility for things such as providing a rental assessment so that you have a good idea of how much rent you can realistically charge.This requires them to conduct viewings of the property on your behalf and performing the tenant referencing. A letting agent’s ‘let-only’ service can be expected to provide a tenancy agreement, credit check the prospective tenant and take the tenant’s first payment, in addition to setting up any direct debits.

On the other hand, a full management service will incorporate all the elements above but will typically also take responsibility for the day-to-day management of your property. This means if occurrences arise such as the tenant’s boiler stops working or they find they have locked themselves out of the house, the letting agent will arrange for one of it approved contractors to do the work.

How much is normally charged by letting agents

There are many variables to take into account regarding what letting agents will charge. This ranges from location to size of your property making it difficult to base your fee near the ‘guideline’ level you may have come across for your local area or the country as a whole.

Letting agents may be open to negotiation when it comes to fees, so if you are prepared to haggle you may land yourself a better deal. Request pricing from several letting agents in your area prior to negotiating.

If you hire a small independent letting agent, you could find yourself paying as little as £200 for a ‘let-only’ service. It is more likely that you will be charged the equivalent to two-four weeks rent, which may add a couple of hundred pounds to the price.

However, a full management service works slightly differently. This will typically be a 12-month deal with letting agent fees typically starting at about 7% and rising to as much as 15% in London. If you find rates lower than this, they should probably be avoided as the standard of service provided to your tenants may not be up to scratch.

So, should you use a letting agent?

A ‘DIY’ approach can be said to be attractive to many landlords, as in today’s digital age where a plethora of information is at your fingertips, saving money by doing it yourself can be attractive. With plenty of research and slowly walking yourself through the process, this can be done.

It is also important to remember that letting agents are unregulated and there are no statutory standards the service provided and fees charges, so if you do use a letting agent, be sure to go with only trusted agents who will look after your money, your tenants and your tenant’s money.

Being a landlord is a difficult task, particularly if you have a number of properties or are working on top of it. Doing all of your own property management can prove extremely stressful depending on the number and size of your property’s, your level of experience and the nature of the tenants who are living there. Although one hopes they can do everything which is expected of them to keep their tenants happy, this is not always the case. If the thought of dealing with unhappy tenants brings on a sense of dread, using a letting agent ‘s full service will mean they will be the ones handling them.

Ultimately, only you as the landlord can make the decision in accordance with your requirements and circumstances. By keeping yourself well-informed and researching, you will maximise the chance of a positive outcome through choosing the best option for you.