How Landlords Can Find the Right Letting Agent

 
Ross
·
10 min read
·
Jul 18, 2024
·
Updated: Jul 18, 2024

Managing rental properties can be a complex task, particularly for landlords who have other commitments or lack the necessary experience. Whether you're relocating, managing multiple properties, or simply don't have the time for day-to-day management, employing a letting agent can be an invaluable solution. Letting agents are experts who provide peace of mind by ensuring your investment is in capable hands.

Levels of Service

Letting agents offer a range of services tailored to meet the varying needs of landlords. Understanding these options can help you choose the right level of service:

Tenant-Find Only

  • Marketing the Property: Effective advertising strategies to attract potential tenants.

  • Conducting Viewings: Arranging and managing property viewings.

  • Reference Checks: Vetting potential tenants to ensure reliability.

  • Preparing Tenancy Agreements: Drafting legally sound tenancy contracts.

  • Additional Services: Rent collection and inventory checks, often for an extra fee.

Tenant Find + Rent Collection

  • Building on Tenant-Find Service: Includes all the benefits of the tenant-find service.

  • Rent Collection: Ensuring timely rent payments and managing financial transactions.

Full Management

  • Comprehensive Service: Covers all tenant-find and rent collection services.

  • Property Management: Day-to-day management, including repairs and maintenance.

  • Handling Deposits: Managing deposits at the end of the tenancy.

  • Dealing with Missed Payments: Addressing late or missed rent payments.

  • Contract Renewals: Managing lease renewals and rent renegotiations.

Landlords should discuss the extent of the agency’s decision-making power, particularly for emergency repairs. Additionally, agencies often offer a complimentary rental valuation to help set an appropriate rental price.

Estate Agent Fees for Landlords

Costs vary based on the level of service and location, with fees generally higher in London:

Tenant-Find Only Fees

  • Flat Fee: Typically equivalent to one month’s rent or a percentage of the contract’s duration (usually 6-8%).

  • Additional Fees: Clarify if extended tenant stays incur extra charges.

Tenant Find + Rent Collection Fees

  • Monthly Fees: Typically 8-12% of the monthly rent, with a premium in London.

Full Management Fees

  • Comprehensive Service Fees: Generally 10-15% of the monthly rent. Long-term contracts may offer negotiation opportunities.

Most agents operate on a "no let, no fee" basis, ensuring you only pay if they successfully secure a tenant.

Additional Letting Agent Fees

Beware of hidden costs not included in the main fees, such as:

  • Inventories

  • Rent Reviews

  • Safety Certificates

  • Vacant Room Charges

  • Check-in Fees

Contracts might also include clauses entitling the agent to a percentage if the property is sold to a tenant.

Letting Property

Letting Agent Fees for Tenants

Tenants typically face fees for:

  • Inventory Checks

  • Tenancy References

  • Deposits (usually four to six weeks' rent)

  • Agreement Fees

  • Tenancy Renewal Fees

  • Administration Fees

It's crucial for tenants to thoroughly read the tenancy agreement to avoid surprises.

Pros and Cons of Property Management Services

Pros

  • Efficient Tenant Recruitment: Letting agents have the expertise to find and vet suitable tenants quickly.

  • Maintenance and Legal Compliance Support: Agents ensure the property is well-maintained and complies with legal requirements.

  • Emergency Handling: Agents can manage emergencies, providing immediate solutions.

  • Multi-Property Management: Ideal for landlords with several properties, as agents can manage them all efficiently.

  • Objective Landlord-Tenant Mediation: Agents can act as neutral parties in disputes, helping to resolve issues fairly.

Cons

  • Reduced Rental Income Due to Fees: Management fees can reduce overall rental income.

  • Potentially Higher Repair Costs: Agents may not always find the most cost-effective repair solutions.

  • Less Control Over Property and Tenant Management: Landlords may feel disconnected from the management process.

Choosing an Agency Size

The size of the agency can impact the service quality:

Small, Local Agencies

  • Personalized Service: Offers more tailored services and attention to detail.

  • Quick Response Times: Often faster in addressing issues and providing support.

Large, National Agencies

  • Extensive Resources: Larger agencies have more resources and tools at their disposal.

  • Marketing Prowess: They have broader marketing reach and can attract more potential tenants.

Advertising Strategies

Inquire about the agency's advertising approach, including:

Online Listings

  • Platforms: Utilization of major property websites like Primelocation, Zoopla, and Rightmove to reach a wide audience.

Offline Efforts

  • Professional Photos: High-quality images of the property to attract interest.

  • Tenant Databases: Access to a large database of potential tenants to find the right match quickly.

Agency Trustworthiness

Verify the agency’s membership in professional bodies such as:

Professional Bodies

Property Ombudsman

  • Registration: Ensures the agency adheres to industry standards and provides a route for dispute resolution.

Reading Agency Reviews

Researching reviews from landlords and tenants can provide insights into the agency’s reputation, influencing tenant attraction and retention.

Online Reviews

  • Landlord Reviews: Check feedback from other landlords to gauge satisfaction.

  • Tenant Reviews: Understand the tenant's perspective and how the agency manages their needs.

Switching Agencies

If dissatisfied, switching agencies is an option. Be mindful of the notice period, typically two months, though some contracts may extend to six months.

Notice Period

  • Contract Terms: Ensure you understand the required notice period before switching.

Agency Performance

  • Assessment: Evaluate the current agency’s performance to justify the switch.

Landlord Insurance

Consider landlord insurance to safeguard your investment. Most policies offer:

Buildings Insurance

  • Coverage: Protects against damage to the property structure.

Property Owners’ Liability Insurance

  • Liability Protection: Covers legal liabilities if tenants or visitors are injured on the property.

Additional Protections

  • Optional Coverage: Includes accidental damage, loss of rent, and re-homing tenants in case of disasters.

Reviewing a list of landlord insurance providers can help you choose the right policy.

Conclusion

Choosing the right letting agent and insurance policy can make all the difference in the world of property rental. With the right support, landlords can ensure their properties are well-managed, their tenants are happy, and their investments are secure. Ready to find the perfect letting agent? Start your search today and safeguard your rental property investment.

Frequently Asked Questions

What is the average property management fee in the UK? The average property management fee in the UK ranges from 10-15% of the monthly rent. Fees can be higher in areas like London.

What is a fully managed tenancy?
A fully managed tenancy is a service where the letting agent handles all aspects of property management, including marketing, tenant vetting, rent collection, maintenance, and dealing with tenant issues.

Do property management companies need a license in the UK?
No, property management companies in the UK do not need a specific license. However, many register with professional bodies like ARLA, NAEA, or RICS to ensure high standards and compliance.

What is tenancy in property management?
Tenancy in property management refers to the legal agreement where a tenant rents a property from a landlord. It includes rent collection, property maintenance, tenant relations, and end-of-tenancy procedures.