Letting agents, who needs 'em?

[Anthony]

How necessary an evil are letting agents, even if I am moving abroad soon?

I've just purchased a property as a buy-to-let in Colchester and am really reluctant to cough up the 60-85% finder's fee plus 10-15 percent management fee quoted by agents there.
If I followed the advice of Landlord Zone on seeking, screening and vetting tenants (quite comprehensive advice), set up a standing order for rent, paid 100 pounds a year for rent guarantee/legal action insurance, and engaged a local contractor to be on stand-by for any call-outs, I'd save a packet. My mortgagee doesn't insist on an agent, and I find it hard to see value for money in their fees.
So, would I be fool to avoid them except when it came to reletting? What's the worst case scenario?

[Tax Accountant]

It helps if you have someone locally to instruct and attend to minor ongoing repairs. Subject to this, you don't really need the agents once you have found the tenants. At most use them to find the tenants.

But remember to avoid false economy of leaving your property vacant for far too long as this may cost you more in lost rents than the agents fees in finding you a tenant quicker.

I think that it is best to offer your property for less than the going rate. This attracts a tenant quicker and avoids long void periods. Also helps in retaining tenants longer than would be the case otherwise. If a tenant has been good, don't be greedy at renewals as it will cost a lot in finding new tenants and the loss of rents during the void periods.

As they say, retaining an existing customer is cheaper than attracting a new one. Also better the devil you know than the one you don't know.

Ramnik

[Anthony]

Thanks for that. One problem with no having an agent when living abroad (I am likely to be away for a couple of years at least) that springs to mind is how to assess any damage done at the end of a tenancy and how much of the deposit to withhold. While I have someone lined up who can do day-to-day maintenance and repairs, this task might be out of his ken. Are there companies out there that would do just this for a reasonable fee?

[dazalock]

I would go and speak to a few agencies and discuss your requirements and fears, if I were an agent I would do the bits you want with the knowledge that at some point in the future you might consider it all too much hassle and hand over the management to me.

[oaktree]

Agents are a bit like insurance, they seem too expensive until the time you actually wish you had one.

Managing it yourself from abroad is possible, you just need to put aside the time to do it properly. You should be able to find an inventory cleark in the area that would produce and check the inventory at the end of each tenancy for a fee; usually it would be upto you to decide how much to deduct and negotiate with the tenant though. They might even carry out inspections for you.

You can probably find someone to advertise for a tenant for you and vet them to if you really don't want to pay an agent. Be aware that there are lots of people who use the private adds because they know they won't get past an agents (most agents) scrutiny.

If you're going abroad you need to give some consideration to the NRL scheme and how that will be operated; if there is no agent the tenant will need to comply.

[Paul_f]

As I keep posting - DO NOT USE ANY AGENT WHO DOESN'T BELONG TO:


1. National Association fo Estste Agents. (NAEA)
2. Associaiton of Residential Letting Agents (ARLA)
3. Royal Institution of Chartered Surveyors (RICS)

All three bodies have compulsory client money protection and members can be disciplined and/or fined for unprofessional conduct. A redress system is also in place for the last two and the NAEA will have theirs in place soon.

[justaboutsane]

Agents are a bit like insurance, they seem too expensive until the time you actually wish you had one.

Managing it yourself from abroad is possible, you just need to put aside the time to do it properly. You should be able to find an inventory cleark in the area that would produce and check the inventory at the end of each tenancy for a fee; usually it would be upto you to decide how much to deduct and negotiate with the tenant though. They might even carry out inspections for you.

You can probably find someone to advertise for a tenant for you and vet them to if you really don't want to pay an agent. Be aware that there are lots of people who use the private adds because they know they won't get past an agents (most agents) scrutiny.

If you're going abroad you need to give some consideration to the NRL scheme and how that will be operated; if there is no agent the tenant will need to comply.

Oaktree, I have just read your post and would appreciate if you could explain or point me in the dirction of some information on the NRL scheme you mentioned. We look after two properties for an Ex Pat landlord who lives in Taiwan and he called the other day asking about this! We do not have a clue! Anyone shed any light on it please!

[oaktree]

Try here for information on the NRL scheme. You should find all you need to know here

http://www.hmrc.gov.uk/cnr/