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Feb
01
2007
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Tips for Landlords that use Letting AgenciesCategory: Landlord Advice
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These are a few things Landlords should consider when dealing with Letting Agencies.
1) Choosing the right Letting Agency
A lot of letting agencies are clueless cowboys and carry no expertise whatsoever. Don’t just go with the cheaper option, your best bet is to deal with an Agency that actually knows what they’re doing. Do some research on Letting Agencies and find out what current and past landlords have to say. Every year landlords get their fingers burnt by letting agencies that are inefficient and unprofessional.
2) Packages
In general, a Letting Agency will offer you different levels of their services. The most basic involves them simply finding you a tenant and drawing up a contract, and for that you will give them a one off fee. Some Letting agencies may only offer that service, they are known as accommodation agencies. However, some offer more comprehensive services. The comprehensive packages involve the agency taking care of the entire Letting experience. They will act on your behalf by collecting the monthly rent for you, cover your legal costs (if there are any), and do regular checks on your property, and plenty more. You probably will remain anonymous to your tenants- you will have no dealings with them- the Letting Agency will act as the middleman. But remember, the comprehensive option is costly; the agency will take a certain percentage of your monthly rental income.
3) Work out your costs
Work out how much your Letting Agency will take from your monthly rental fee, and decide whether it’s cost effective. Some of you may be willing to pay the extra costs for the sake of having a less stressful landlord experience, while others just can’t justify the letting agencies costs. Essentially, you need to decide two things a) do you need the middleman (can you cope without their assistance) b) can you afford the middleman.
Letting agents can be expensive. In fact, from my experience too expensive. Just to find a tenant they charge in average 8-10% of your yearly rental income. For the full-management (premier) service, they can charge anywhere between 14-16%, that’s a huge cut of your profit. Of course, working with agents do have their advantages; they eradicate a lot of the stress. You just need to ask yourself if their pricetag is worth the service…
4) a)Accepting the right Tenant
Remember, this is your property, your investment, so you can have complete control over who stays in your investment. The agency will usually tell you when someone is interested in letting your property. They should do credit and reference checks on the potential tenant. However, by no means is their word gospel. Find out everything you can about the person/people they suggest. Find out why they�re renting, where they work, what they do, how much they earn, how many kids they have..etc.
b) DSS tenants
A lot of Letting Agencies are starting to help find tenancy for people on DSS benefits. This is basically when the government funds individuals accommodation expenses. You’re usually guaranteed payment through a DSS tenant because the council pays the rent directly into your account, or alternatively will send you a cheque. However, DSS are on a budget and sometimes they’re prepared to stay in a property that exceeds their monthly budget Consequently, the DSS tenants may decide to pay the shortfall. Now, this is where the problem could occur. If you take on a DSS tenant, you may receive two payments a month- the first payment will be from the council, and the second from the tenant to cover the shortfall. You�re letting agency probably won�t warn you about this- don�t let the letting agency try and make a DSS tenant sound like a jackpot find simply because the council covers their fees. That�s far from the truth. Find out all the details if you are offered a tenant that is on benefits. Firstly, will the council cover the entire rent, or will there be a shortfall that will need to be covered? Waiting for two cheques per month is unnecessary hassle in my opinion.
5) Letting Agencies subcontractors
If something needs fixing in your property that you’re obligated to fix, like electrical failures or plumbing problems, the Letting Agency will inform you. They will suggest their own sub-contractors to do the work. They are often extremely expensive, and have a hefty callout charge, let alone service charge. I recommend you use your own reliable contacts, and refuse their subcontractors.
6) Contract
When you work with a Letting Agency, they will assign a contract between you and your tenant, and they will also draw up a contract between you and the agency. Make sure you read the contract carefully, and make sure you’re happy with it. Most Letting Agencies are willing to compromise with the terms if there is a dispute on the landlord�s behalf. Letting agencies have a nasty habit of biting you when it comes to the contracts, they rely on amateur landlords to simply sign the dotted line without reading things over carefully. DO NOT make that mistake.
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A Little Introduction 
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Can I ask a question?
Where do you go if you have a dispute with the letting agency?
specifically - if they return your property to you in a mess?
Hey Josie,
Did the letting agent hand it back to you in a mess after a tenant had occupied the property?
Kind regards.
yes -
Well, esentially, that’s what the security deposit is for.
If the property isn’t in the same condition as you handed it over in, you’re entitled to use the security deposit to get it back in shape.
Do you still have the security deposit?
We took out a full package with them - handed every thing over to them. They ‘CLAIM’ to have been doing spot checks every 3 months - but there is mould and dirt over EVERYTHING. They now say they have fulfilled their end of the obligation by checking in on them. The neighbour says she had reported the tennants to the agency AND the enviro. health because of the smell and maggots, but the agency never did anything about it.
I am trying to get them to use the deposit (which they have) to employ profesional cleaners, but they are trying to get out of it - I just want to know where I can go to if things can not be resolved.
Unfortunately letting agents are as bad as estate agents- complete liars.
The majority of letting agents fail to do routine checkups on properties when they’re meant to. They charge an extortionate amount for extremely little work.
It’s been an ongoing problem, and that’s why the Tenancy Deposit Protection Scheme was introduced this April, to protect tenants and landlords. Unfortunately, that won’t apply to you, because your contract was formed before April. Landlords by law have to sign up to the scheme now.
Unfortunately anyone can be an estate agent and/or letting agent, and there is no legislation. So there is very little consumer protection. However, if the letting agent you used is a member of the National Association of Estate Agents (NAEA) or Royal Institution of Chartered Surveyors (RICS), you can make a complaint. More details here
I hope i’ve been of some help.
Good luck.
Thank-you for your taking the time to help.
Josie