Do you have a second property you would like to let out? It may seem like an easy way to make money, but letting out a property can be a complicated business. You might feel tempted to cut out the middleman and let the property out privately. Not having to pay agents’ fees will maximise profits, but unless you have a lot of experience in letting out properties, are willing to do some leg work and are aware of the laws and regulations involved, it isn’t advisable to go it alone.
Whether you are a professional landlord owning several properties, or a newcomer to the ‘buy-to-let’ market, it is well worth the effort to get some professional help from a letting agent.
What is a letting agent? What do they do?
A letting agent’s job is to find suitable tenants for a property on behalf of its owner. The agent begins the process by visiting the property to determine its potential rental income. This valuation is usually done for free. Once you and the agent have agreed on the rent, the agent will advertise the property. This could mean anything from a photo of the house with relevant details in the agent’s shop window, to an ad in the local (or sometimes national) press or a property website.
The agent will usually show the property to prospective tenants and inform you of any interest shown or offers made on the property. They can act as a go-between during negotiations before a tenancy agreement is signed. The prospective tenant might offer a lower rent or ask for extra furniture to be provided.
Once you and the prospective tenant have come to an agreement, the agent will provide a tenancy agreement, a legal contract, for both parties to sign. All of this can usually be done through the agent by phone or post, so there is no need to actually visit the property or meet the tenants (although you might want to).
The services listed above are offered by most letting agents. Many also offer extra services, some of which might be included in their basic fees. Some agents offer a tenant vetting service, which could include taking up references or a credit check on prospective tenants, carried out in-house or by a sub-contracted company. Thorough tenant vetting is important – the last thing you want to worry about is whether the complete strangers you have rented to will be able to pay next month’s rent. Often, this service is either included in the basic letting fee or paid for by the prospective tenant.
Some agents also offer an inventory check service. This is a full list of the condition and contents of the property drawn up during an inspection at the beginning and end of the tenancy, in the presence of the tenant. This should help solve any disputes if you find the tenant has ripped your curtains or stained the sofa and is refusing to pay compensation. Some agents will offer this service for free, others ask the tenant and landlord to share the cost.
Most agents also offer to collect the rent and deposit on behalf of the landlord and arrange to renew a tenancy when the original period expires. They can also arrange for the property to be cleaned before the tenant moves in and at the end of the tenancy.
Many offer a management service, which involves general maintenance and organising necessary repairs over the period of the tenancy. This is useful if you live away from the property or don’t have the time or inclination to deal with plumbers, electricians and other tradespeople.