Being a property owner
Being a landlord is never easy. There’s more to being a landlord than moving in your tenants and watching rent roll in.
Are you considering using a letting agent? We will look at the pros and cons of that.
Letting out a property on your own can be a demanding job.
As a landlord, you have to keep up with property legislation requirements.
Have a series of certificates in place, be always on a call for tenant’s troubles, prepare contracts and not forgetting the most important bit.
Advertising your property to find eligible tenants who will pay you rent on a monthly basis.
It’s a time-consuming business, especially if you have more than one property to look after and make sure that your properties are always filled with tenants.
Advantages of using a letting agent
Services tailored to your requirements
Most letting agencies offer a range of services that can be tailored to your specific requirements, so even if you won’t be relying on them for everything they can help out where applicable. Services might include:
- Preparing property for rent
- Advertising and searching for tenants
- Referencing tenants
- Preparing contracts
- Collecting rental payments
- Organizing maintenance & inspections
- Providing legal advice
Legal requirements are taken care of
Letting agencies should be, in theory, on top of the latest property and tenancy legislation, which can be difficult to keep up with.
In other words, they help you to prepare your property to rent in accordance with the law, avoiding management problems throughout a rental period.
Quick and stress-free tenant search
Most letting agencies have rights to advertise your property on leading rental websites.
Which you won’t be able to access when renting on your own. It’s super convenient as by choosing a letting agent, you get more visibility for your property.
As well as, for an additional cost, providing marketing photography or neat descriptions of your property.
Letting agencies have various referencing processes set up in place to filter out bad tenants which don’t match your or letting agent requirements.
Therefore, you can relax assured that people renting out your property will look after it and commit to paying the rent on a set timeline.
Rental tenancy agreements should cover every single eventuality.
Letting agencies ensure contracts cover everything and will protect you if things go sideways.
Maintenance is looked after
Emergencies can feel like a headache, especially if you have to deal with them yourself.
When choosing a letting agent, depending on your agreement with them, you may never even be aware of problems until they’re sorted.
Good letting agencies have a large network of contacts who can be called upon 24/7 to remedy problems quickly and efficiently.
Disadvantages of using a letting agent
Using a letting agent can be costly, with agencies charging separately for tenants search and property management. Below are industry standards:
Tenant finder’s fee – around 10% of your annual rent.
Property management – up to 10% of monthly rental income.
Adding both costs, this makes a big dent in your rental income after all.
Some agencies also charge, on top, additional fees for inventories, inspections, contracts.
Maintenance plus legal must-haves such as Gas Safety Certificates and Energy Performance Certificates which can add up to a large sum.
Many agencies also charge tenants for things such as contracts renewals, name changes, reference checks which can be less attractive for tenants.
When renting out your property via a letting agent, you add an additional layer of communication between yourself and your tenants, which can cause issues if something needs to be addressed quickly.
This leads to a common issue, especially when letting agent’s customer support standards aren’t of good quality.
A report by the Shelter found that 72% of tenants were dissatisfied with the service provided by their letting agent when addressing a repair issue.
In those instances, tenants look for going to rent elsewhere (and costing you more in finder and property management fee’s).
Loss of control
Using a letting agent and being at the back-seat, means that you hand over your control to someone else. While this saves you stress and time, it’s not always an advantage.
Especially, when letting agencies start charging you large sums for quick repair problems, which you could fix yourself.
What’s your alternative to a letting agent?
There’s always an option to rent out and manage your property yourself, but is this the only option?
Lettings industry has been left untouched for quite many years, with customer standards falling and fee’s rising.
Especially in bigger cities like London, Paris or Amsterdam where renting demand is constantly growing.
The new type of letting agencies are entering the market and are completely digital, which offer the same service as a traditional letting agent.
Just for a bitesize of the cost, fuelled up with technology, automated services, and 24/7 customer support.
Stay tuned for my next publish on digital letting agencies.