If a landlord doesn’t want to find or manage tenants, they can use a letting agency for convenience; however, there are considerations to take into account. While agents have more resources for marketing, meaning that tenants may be found quickly, agency costs can mount up.
Different types of service
The agent markets your property, showing interested tenants around. As soon as someone makes an offer you are happy with, you take over.
The letting agent markets the property and finds a tenant, checks their references, draw up the tenancy agreement, carry out an inventory check, and moves the tenant in. They also secure deposits. When the tenant moves in, you are in charge.
Fees for this service are either a percentage of the yearly rent (usually five to eight percent) or a one-off payment (perhaps £300 to 600).
In addition to the letting service, the agent can collect the rent for you and chase any arrears.
The agent manages your property on an ongoing basis. This includes:
– Collecting the rent and chasing any arrears.
– Regularly inspecting the property.
– Looking after the legal obligations, such as gas safety certificates.
– Taking care of any maintenance issues.
– Responding quickly to tenant requests.
Fees are usually a percentage of the rent, typically between seven percent and 15 percent.
Landlords will find that property inventory software from providers such as inventorybase.co.uk can streamline administration.
Making the decision
Should you manage your property yourself and save money? Put an hourly value on your time and consider whether the agency can carry out tasks more quickly than you, saving you money. Remember that time spent on maintenance will vary from month to month. You should also consider how much you like being a hands-on landlord and engaging with tenants.
As mistakes can be costly, both legally and financially, you need to assess whether you have the confidence to take on all landlord obligations.
You need to be familiar with lettings law and landlord responsibilities, even if you go for full management, to monitor the agent. Remember that you can always change your mind about which arrangement you choose.
Read the letting agreement carefully, making sure it covers all costs and services.