Some landlords are happy to manage their own properties, but if you lack the time or the experience, you might want to consider employing a letting agent.
Types of agent
There are various types of letting agent. A small, independent company might have a good reputation and knowledge of the local area. An agent that is part of a bigger chain might be more appropriate if you let a number of properties or you are dealing with company lets.
Some landlords prefer letting agents that are owned by an estate agency as they might have access to more marketing resources.
Letting agents normally operate on a ‘no let no fee’ basis. You should contact more than one firm to get a true sense of what’s on offer. First impressions count so check out the offices, the website and the marketing literature. Look at the firm’s advertisements in the local paper and online - and use your common sense. If an agent is impossible to contact, disorganised, or rude, the relationship is unlikely to be happy.
Do you know any other landlords who employ letting agents? Personal recommendation is often a great way to select an agent. You should also do some research on the internet. If an agent has performed poorly or acted dishonourably, a disgruntled landlord might have vented his feelings online.
Find out when the business was established as experience is valuable. It’s also sensible to select an agent with experience of similar properties in your area. It’s no good employing a firm that manages high-end properties to professionals if you rent out shared accommodation to students.
Similarly, an agent that specialises in rural homes is unlikely to have much luck with a city centre apartment.
Some agents charge prospective tenants an admin or registration fee. It can help to prevent time-wasters, but it can also put off some tenants. Find out about any tenant fees so you can make an informed decision. If the fee is high, you might want to cross the agent off your list.
It’s a good idea to make sure the agent is a member of a professional association such as the Association of Residential Letting Agents (ARLA) or registered with The Property Ombudsman. They should then be bound by a code of practice and be kept up to date with any changes in legislation. Associations also usually ensure that agents have in place professional indemnity insurance and comply with any laws to safeguard client money.
Watch out for extra fees. Many firms make an additional charge to draw up an inventory.
Finding a tenant
Letting agents normally offer three different levels of service. You might, for example, simply want the agent to find the tenant. A letting-only service such as this is usually the cheapest and should include preparation of the property particulars, marketing the property, conducting the viewings, checking the tenant references and sorting out the tenancy agreement. You might also agree that the agent will collect the first month’s rent, plus the deposit, and check and hand over the property.
Some agents offer a letting service, plus rent collection. They will then find the tenants and collect the monthly or weekly rent.
Or, you can opt for the full management service, where the agent is responsible for finding the tenant as well as the day-to-day running of the property. In other words, the agent would be the main point of contact with the tenant and would regularly inspect the property and oversee any routine repairs and maintenance.
Letting agents either charge a flat fee or a percentage of the rent. You should expect to pay between 10% and 15% for a full management service, though you should obviously negotiate with the agent.
Watch out for extra fees. Many firms make an additional charge to draw up an inventory. They might also levy a fee when the property is vacant. Repeat fees are another common add-on and allow the agent to take a commission if the tenant renews the tenancy, even though there is almost no work involved.
Some contracts also include a clause that gives the agent a percentage of the price if the landlord sells the property to a tenant.
Always read the contract carefully to make sure the agent’s responsibilities are clear. Managing agents, for example, are usually authorised to carry out repairs up to a certain amount without permission from the landlord. You should also check whether the agent is responsible for the gas safety checks. To find out more about the responsibilities of being a landlord, read our landlord responsibilities guide.
If you aren’t happy with your agent, you are of course free to switch to another firm or simply go it alone. But you will have to give notice. The typical notice period is two months, though some contracts tie you in for six months.
Don’t forget to take a look at our list of landlord insurance providers to make sure you get the right policy for your property.