Many landlords will pass the burden of marketing and managing their property to a letting agent. The service comes at a cost, of course, but can make the process relatively worry and hassle free. It is an option particularly worthy of consideration if the landlord lives a considerable distance from their investment property.
Agents charge fees to undertake the administration and management of a property, and charges vary from one to another. Check the fees of several agents in the area to get as competitive a rate as possible and remember that in many cases these fees are negotiable. In general, an agent may take around eight per cent of rental income for finding a tenant and another eight per cent for property management services.
Find a Reputable Agent
If one thing is even more important than securing good financial terms, it is ensuring that the chosen agent is reputable. With that in mind, it is worth finding an agent that is a member of either the Royal Institute of Chartered Surveyors or the Association of Residential Letting Agents, as they will follow the correct legal procedures to find a suitable tenant. Nevertheless, get written confirmation of the agent's terms, conditions and costs before signing anything.
Once an agent has been chosen, the landlord has to sign an agreement that outlines the agent's fees and the length of the contract. It is important that the landlord understands the contract before signing it and avoids a lengthy tie-in.
Most tenants look for suitable properties through letting agents, and this ready supply of potential tenants means the agent can quickly find suitable occupants. Employing the services of an agent is also likely to reduce the length of time the property is empty once a tenant's lease expires, as there will probably be other suitable occupants waiting in the wings. In addition, an agent should:
- Advise on the length of tenancy.
- Advise on the rent to charge.
- Advise on whether to let out the property unfurnished, partially furnished or furnished.
- Handle the letting process.
- Prepare the tenancy agreement.
- Belong to a tenancy deposit protection scheme to safeguard the tenant's deposit.
The letting agent will discuss the best way to let the property, and whether it is suited to multiple or single tenants. When considering the rent to expect from the let, the age and type of property, as well as fixtures and fittings to be included will be taken into consideration. In order to find a suitable tenant, the letting agent will advertise the property and undertake the viewings.
It is the letting agent's responsibility to get written references for the prospective tenant. These will typically include a credit referencing check and confirmation of the prospective tenant's employment status and salary from current and previous employers. Current and previous landlords will be contacted to confirm that rent was paid on time and is not outstanding and that the property was kept in good condition. Where needed, the agent will secure a guarantor's references.
In addition, the agent should complete the inventory checks on the property, ensure - in most cases - that an Assured Shorthold Agreement is completed and obtain the necessary deposit and initial rent.