So you own another property that you don’t live in. You might have lived in it previously and are now moving on. You might have inherited it. You might have had some savings that you realised would be wisely invested in property for the future. It’s a good investment that will go up in value and can generate additional income for you. What do you do now?! Do you let it and manage it yourself, or appoint a letting agent? If this is you, here’s some information that will help you make a decision.
Reasons for doing it yourself – without a letting agent
- Save money – Manage the property yourself and you won’t have to pay an agent a monthly fee to manage your property. Great!
- You can meet prospective tenants before letting to them – while letting agents carry out credit checks and references on all tenants, you might think that your judgement, or gut instinct, is the most important part of screening a tenant. If you advertise the property yourself you get the chance to meet prospective tenants and interview them face-to-face before committing.
- Develop relationship with tenants – you’ll be the tenants point of contact for any maintenance or tenancy issues. This will give you a chance to develop a relationship which you would hope will mean that if you take care of them, they’ll take care of your property
- Maintenance work – by managing the property yourself you can take advantage of any friends or family who are tradesmen and will give you a good deal when dealing with any maintenance or checks.
Reasons to use a letting agent
- Marketing your property
- Advertising – A letting agent will be able to advertise your property on all the main lettings portals (including Rightmove, Citylets and all associated portals) to expose your property to a maximum number of prospective tenants. Go-it-alone landlords usually advertise on Gumtree as it’s free to use.
- Pricing – a letting agent will be up to date with the market rents to optimise the rent achievable. Rents are growing so quickly that it’s important to be on the ball with current rents. Rents achieved by professional agents on the major marketing portals will usually achieve a rent of around 10-15% higher than if the property was on Gumtree.
- Viewings – a letting agent will take care of all viewings so that you don’t have to. You might be inundated with enquiries when a property is on the market and you want to make sure prospective tenants can view as quickly as possible.
- More tenant choice – online review portals such as Google reviews and Allagents and regulatory bodies such as ARLA Propertymark give tenants a level of confidence and security that they do not have with private landlords. Consequently, many tenants prefer to rent from a regulated letting agent with good service ratings rather than take a risk on an unknown private landlord
- Credit checking & referencing
- A letting agent will have processes in place to credit check and reference tenants. Best practise for agents is to pass on all applications to landlords for final approval, giving a bit of a background to the applicant. Credit checking, employer and previous landlord referencing is the most reliable way to screen potential tenants.
- Maintenance & property management
- Maintenance & repairs – a letting agent will have a broad and tested network of local tradespeople to deal swiftly with any repairs required at the property.
- Emergencies – good letting agencies will provide an out-of-hours process and deal with late-night boiler breakdowns so you don’t have to.
- Insurance claims – most letting agencies should provide a block insurance policy for you and their other clients. This means they will deal with any insurance claims and repairs during a tenancy.
- Refurbishments – when it comes to upgrading your property, a letting agent will be able to project manage any refurbishments that are needed within the property and to make sure any works fit with tenant’s holidays or gaps between tenancies. They will also identify in advance (as part of routine inspections) when upgrading is required avoiding standards declining at the property.
- Safety Certificates – Your letting agent will keep on top of the ever-changing property safety legislation and will have reminders set up to take care of any certificate renewals
- Paperwork – A letting agent will know tenancy legislation inside out so can make sure the right paperwork is served at the beginning and end of the tenancy; this can be a minefield if done incorrectly!
- Rent – a letting agent will have processes in place to deal with late rent right away and will know the mechanisms to make sure rent comes in or to take steps towards ending a tenancy. Having a letting agent in place will ensure you don’t get caught up in the emotional rollercoaster and false promises of late rent by sticking to strict procedures and timescales
- Tax – The cost of your letting agent is ‘tax deductible’ in that this is seen as a cost when calculating your annual tax return. You would otherwise be paying tax on this amount so why not spend this money on instructing an agent instead?!
My final thoughts on this decision is it really depends on you as an individual and how hands-on you want to be. Letting and property management is a big job so don’t think it won’t be a lot of work – it will be! Letting agencies will usually pay for themselves with the increased rent and occupancy that they will create along with savings on things like legal certificates. Good letting agencies offer better value than being independent and significantly less hassle but if it’s a hobby or second-job that you’re looking for then becoming an independent landlord is sure to keep you busy.