Should I be using an agent to let/manage my property?Make Text Bigger
I regularly give talks all around the country at landlord forums and property events. At the beginning of a talk, I usually ask landlords to raise their hands if they are using a letting agent. Over the last couple of years, there has been a noticeable shift where more landlords are beginning to self-manage their properties.
There could be number of reasons for this. However, self-management is not the right approach for all landlords – especially if they are not experienced in property management.
There are three main reasons why a landlord should not self-manage: Lack of knowledge/expertise; poor access to the property, and; emotional attachment. NOTE: Cutting costs is not a good reason to self-manage unless you have the experience of letting and managing property.
Lack of time, access and knowledge are self-explanatory. Landlords who choose self-management and lack time/knowledge will inevitably be the ones who will have to deal with some sort of problem during the course of the tenancy.
When it comes to emotions, landlords need to remember that running their property portfolio is a business. Emotional attachment often leads to poor decision making which usually surfaces when a tenant becomes problematic.
On the other hand, a good agent can be a blessing. Landlords can have access to a dedicated contact (for both the landlord and the tenant), local knowledge and industry expertise. Typically, an agent will charge up to 15% of your incoming rent as their fee, so landlords need to ensure they are getting the right type of service.
In any business, it is essential to be surrounded by competent and trustworthy suppliers. However, not all agents out there are. Recent cases where agents have stolen rent money from landlords are become all too frequent. Therefore, it is important that landlords carry out due diligence to ensure they are using the right ones.
We highly recommend that landlords use agents who are accredited by one or all of the following: ARLA, NALS or The Property Ombudsman Service (if not, all of them!). If they are involved with sales, then look for National Association of Estate Agents (mandatory for sales agents) and the Royal Institute of Chartered Surveyors accreditation.
These organisations have strict codes of practice that agents must adhere to. With the advent of CPD, many of these schemes require agents to attend regular training. This ensures that agents are up-to-date with the latest workings within the industry.
Some questions you should ask an agent before using them:
- Are they providing a full-management, or let-only service?
- How do their fees work? And: what is the contract length? How is the contract terminated?
- What support do they provide? (maintenance, documents, etc)
- What is their background? How long have they been operating for? Are their account published?
A good letting agent will have all of this outlined in their terms and conditions. Landlords should thoroughly read them through. This will ensure that problems with agents are minimised.
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