Let’s Hear it for the Letting Agent
As the economic troubles persist, and from all indications this week it will be some time before all this is over, landlords will increasingly have to deal with tenancy problems.
Despite a relatively buoyant lettings market (certainly compared to sales), increasing redundancies, fewer temporary foreign workers and an oversupply of rentals in some areas, will mean that increased void periods and rent arrears will be inevitable for many landlords.
There’s evidence that some of the rental demand is being soaked-up by cash-strapped home owners taking in lodgers, and of course many youngsters will be returning to the nest in these troubled times.
Perhaps even divorce rates, a traditional creator of demand for rental accommodation, will be stifled in the face of limited family resources.
Commercial landlords are faced with similar problems. Most businesses are experiencing falling sales and therefore revenues, whilst costs, particularly business rates, stay the same or even increase.
Rent payments therefore are coming under pressure, with some tenants approaching landlords for reductions.
Dealing with these problems is tricky, especially for in-experienced landlords with nothing in the way of portfolio or financial resources to help them weather the storm.
Reducing voids may mean spending money to make sure the accommodation is up to a good standard, and unfortunately, taking a hit on income by reducing the rent a little.
In the case of arrears, you should try to establish lines of communication quickly—though experience shows that tenants in distress often don’t communicate well. Often they are not in a good state of mind, so don’t think rationally, and the sight of letters, or calls from the landlord, is the last thing they want.
Despite all this, you should persist and, where possible, try to establish the reasons why rent is not being paid.
It may be possible to help your tenant with claims for Housing Benefit, work out a re-scheduling of the rent payments, or in the worst cases, reduce the rent, though this can be risky if other tenants find out about it—they’ll want a reduction too.
If tenants don’t cooperate, usually the best strategy is serving notices and going for possession—remember tenants will not be re-house by councils unless they are evicted.
In the case of commercial tenants, especially where businesses were already shaky, rent payments will quickly go into arrears or stop altogether.
Again, try to communicate, but the issues are different: depending on lease lengths, and now 100% empty business rates. Tom Entwistle
Tom Entwistle, Editor
Let’s Hear it for the Letting Agent
At times like this there’s a strong argument that says, save money by letting and managing tenancies yourself.
That’s all very well if you have the time, the experience and the expertise that’s necessary and if you are located near to your property.
Letting property increasingly demands a businesslike approach, where an up-to-date knowledge of the law and all the other associated skills such as marketing, administration and people management are most important.
Yes, all this can be learned by the average landlord, and a site like LandlordZONE is here to help, but a good agent is worth a great deal—event if you do intend to DIY eventually.
Good agents are invariably members of one of the professional associations, with back-up insurance and deposit bonds to protect both landlord and tenant in case of difficulties.
Look for long established businesses with reputations to keep and staff that are well trained and experienced.
Drive a hard bargain right from the start, though remember—you get what you pay for—gaining concessions on fees can sometimes result is a lower standard of service—we’ve all got to live.
Read the small print in your agreement with your agent and watch for excessive renewal fees.
Content for this issue is supplied by Kate Faulkner, Managing Director
www.designsonproperty.co.uk
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