How can I find a good letting agent or property manager?
There are lots of agents around these days, especially with the rapid growth of property letting over recent years.
However, many agents that have sprung up through this, and some estate agents that have recently turned their hands to lettings when sales declined, have little or no real experience in the field, let alone proper training and qualifications.
Anyone can set themselves up as a letting agent in the UK as this type of business is not regulated, so caution is needed when you appoint your agent.
Despite the pitfalls mentioned above, there are some very good agents around if you know how to find them and select the best.
How do I choose a really good agent?
Generally in this life you get what you pay for and particularly when it comes to services: cheapest is rarely the best. If an agent does not quote you a realistic commission or fee then expect the worst. A let-only arrangement would usually be around 10% of the annual rent and full management would be around 10% of the monthly rent.
Any figures wildly away from those levels and the agent cannot make it pay if they have their normal overheads to pay. You may get a new business offering less to get started, but then you take the risk they are not experienced.
Watch out for those agents who quote you low prices but then make this up by adding on all sorts of miscellaneous extra charges. Always negotiate hard and pin your agent down to reasonable prices, especially on renewals. Be wary about paying too much by way of charges up-front. If the tenant or agent turns out to be a dud you will be way out of pocket.
Remember: an agent works for you – he’s your agent. Some agents really believe the landlord works for them, or at lease must do everything they say. That’s putting the cart before the horse. Just because an agent knows a lot more about letting than you do, it does not me you bow down to his or her every command.
If you only want the agent to find a tenant, a let only arrangement, try to negotiate a fixed payment, say £500 for the one-off deal.
Read the terms on any contract you sign with your agent very carefully, especially in relation to renewal fees. Clarify what happens if you wish to take the responsibility for management back to yourself – how much compensation does the agent need for you to get out of the contract? Every contract should have a termination clause which spells out exactly what happens on early termination.
The Benefits of Using a Good Agent
There are many situations were using a good agent is a must: if you live far away from your property, or you are abroad, then there’s almost no choice – you need an agent and a good one will save you a whole lot of trouble and heart ache.
Perhaps you have a very demanding job or you travel away a lot. If you can’t spare the time to deal with lettings and tenant management, or you are not available at times when tenants need help, then you need a good agent to do this for you.
Good agents come at a cost, but the benefits you will get from selecting a really good one should far outweigh those costs:
- If you live away from your rental property then a good agent will give you the peace of mind that the property and tenancy is being properly looked after, and you will not be troubled by contacts from your tenant with minor problems and repair issues.
- Agents have good tenant contacts so they will find new tenants quicker and they often have them on waiting lists, so you should have shorter voids.
- If you have a lot of properties or a demanding job an agent will leave you free to concentrate on your work, or investing, developing, refurbishing and growing your portfolio.
- The landlord / tenant relationship is often a difficult one and if you are inexperienced as a landlord you may find this difficult to deal with. The agent puts up a barrier between you and the tenant. This is a big advantage as it stops you getting too emotionally involved and keeps things on a business footing, which is exactly what’s needed.
- If you are a part-time landlord then agents and their staff are available all week to deal with new tenant enquiries and see to tenant problems.
Agent’s Professional Bodies and Associations
Good agents will invariably be members of one or more of these:
The National Association of Estate Agents – NAEA
The Royal Institution of Chartered Surveyors – RICS
National Approved Lettings Scheme – NALS
Association of Residential Letting Agents – ARLA
The Property Ombudsman service
Taking over Yourself
Landlords often start to manage their tenancies themselves because they have had bad experiences with agents and they realise that with a little bit of experience, by developing methodical mismanagement systems, and using some common sense, tenant management is not that difficult anyway.
However, with a bit of care you can select only good agents and reap all the benefits mentioned about:
What do I Look Out For?
Here is a checklist you may like to use when next choosing a letting agent:
- Look for evidence that they are members of one of the agent’s professional associations. This means they will be bound by professional codes of conduct and be obliged to carry professional indemnity insurance and bonds for rent collection and deposits.
- Ask then for evidence of their continuous staff training programmes.
- Ask them about their tenant vetting process and get documentary evidence – does it seem thorough and convincing.
- Do they have good references and testimonials from satisfied landlords and property companies?
- Find out how they will mange rent collection, where the money will be held (should be in a separate client account) and how and when it will be paid out to you.
- Find out how they will handle the tenant deposits they take and what scheme they will use to protect it. Ask what they will do with the deposit if you decide to take over management yourself. Ideally you want it paid to you.
- Ask how and when they will perform periodic property inspections and how often they visit the property to make sure everything is running smoothly with the tenants.
- Check out their offices and make sure these are well organised and business like and that it looks as though they are security conscious – they are dealing with a lot of personal information from tenants so make sure they are data protection registered and following the guidelines.
- Do some research, ask around locally and find out the reputation of the agents in your high street. How long have they been in business, how much experience do they have?
- If there is any doubt in your mind or if you see signs of trouble (especially financial difficulties) with a prospective or existing agent, you might consider doing business financial checks on them – this will show if they have debts or credit problems
By following these simple guidelines you should ensure that your experience with your agents is a good one. Even if you only intend to use an agent in the early years of your landlord career until you get experience yourself, it’s well worth being highly selective.
By Tom Entwistle,
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©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.