Guide For Landlords That Don’t Want To Use Letting Agents
Written by The Landlord on 24 Jun 2009This guide is specifically aimed to help new landlords that don’t want to use letting agents.
A common misconception is that letting agents provide us with a skill set which can’t be duplicated by the average landlord. We assume that they have an advantage over us by having all the trade tools and resources. NOT TRUE.
All agents provide us with is a service which we don’t know enough about to confidently duplicate. But when you break it down, it’s really not that difficult or time-consuming to learn the essentials, which is what my step-by-step guide below will demonstrate.
Letting Agents charge between 8%-15% of the rental rate for their services. They’re expensive. Additionally, the landlord has to meet their legal obligations, such as acquiring Gas Safety Certificates and Energy Performance Certificates. Acquiring those products through a letting agent can be more expensive than normal because agents usually add their own premium. So it quickly becomes easy to see how being a landlord can be expensive when using a Letting Agent. However, their fees can be avoided, and that’s simply by taking the letting agent out of the equation. It’s not as difficult as it sounds.
The information below is a step-by-step guide on how a landlord can independently be a landlord without the aid of a letting agent.
1. Make sure the property is legal and in working order
- Ensure property meets all Electrical Safety obligations.
- Ensure the property has a valid Gas Safety Certificate is in place
- Ensure the property has a valid Energy Performance Certificate (EPC) is in place
- Ensure the property has a valid buy-to-let Landlord Insurance policy
- Check that all doors and windows lock properly
- Check that everything you provide with the property is in safe and working order
Aside from the non-obligational procedures that any Landlord with a bit of common sense would pay attention to, it’s important for the landlord to meet all legally required obligations. These are all necessary obligations; failing to comply with these could result in prosecution. Here’s a more detailed list of Landlord Obligations / Regulations – The Law
2. Make the property presentable
In this current market, with an oversupply of BTL properties, renters’ are spoilt for choice, so it’s crucial to make your property as appealing as possible, just to help shake off the competition.
3. Know your property
I know this point seems stupid, but it’s amazing how many small, yet important details are unknown by the landlord regarding their property.
The following information are just examples of what details you should be aware of, so you can pass on the details to your tenant, or letting agent (depending on if you use a letting agent or not).
- What council tax band the property is in
- How much the council tax is
- What day the garbage men do their round
- Which companies are currently supplying the property with gas & electricity, water and the telephone line
A more detailed guide on the issue: Know The Specifics Of Your BTL Property
4. Market your property to find tenants
There are tonnes of ways landlords can market their property to find tenants. Some of the better methods of marketing require a small budget, but there are plenty of free options.
Here are 17 Ways Landlords Can Market Their BTL Property For Free.
Here’s How Landlords Can Advertise on Rightmove by using Online Letting Agents.
For a comprehensive guide on how to find tenants efficiently and cost-effectively, go to the Finding Tenants Guide
6. Take viewings
During the viewing be sure to discuss all relevant information:
- Show tenants the Energy Performance Certificate (EPC)
- Discuss how much rent is, and the options of how rent can be paid (What’s The Best Way To Collect Rent? )
- Discuss who is responsible for bills e.g. council tax and utility
- Make it clear when the property is available
- Discuss how long the tenancy is for
- Make it clear that a guarantor is required
- The deposit required
7. Research the prospective Tenants
Once the offers start flowing in, get all the relevant information from each prospective tenant before committing to the deal:
- Current/past employment status
- Rental history
- Reference details from previous Landlords
8. Tenant References
Follow up each reference- call their place of work and their past Landlords.
9. Credit Check
Get a 3rd party to perform credit checks on the rascals.
Here’s a List Of Tenant Credit Check Services For Landlords
10. Pick the winner
Use your own intuition based on the references and the face-to-face encounter to determine which tenant is most suitable for the property.
I generally use the following pyramid diagram as a tool for assistance, The Best And Worst Tenants
11. Make Arrangements
Call the lucky applicant and confirm the arrangement. Agree on a moving in date, and arrange a time to meet at the property.
Remind the tenant that the deposit and first month’s rent is required to be paid by move in day. Arrange how the payment will be made. Also, discuss the arrangements for a Tenant Guarantor. Ideally, the Guarantor will sign the agreement before move in day.
12. Prepare the documents
I always use the following documents with every tenant:
- 2 x Tenancy Agreement
- 3 x Tenant Guarantor Form
- 2 x Property Inventory Form
- A copy of the Gas Safety Certificate
13. Meet the Guarantor
Meet and greet the Guarantor so they can fill in the Guarantor Form and sign it. Make sure they’re aware of their responsibilities.
14. Keys
Ensure you have 3 sets of keys to the property. Keep two for yourself and one for your tenant.
15. Make a confirmation call
A few nights before move in day, call the tenant and confirm everything is still as planned.
16. Move in day
Meet the tenant at the property with prepared documents. Don’t hand over keys until the inventory is completed together, the contracts are signed and first month’s rent and security deposit have been paid. Only then hand over keys and allow for their belongings to be moved in.
17. Perform a comprehensive tour
Show the tenant the important specifics:
- Where the fire alarms are located
- Discuss the areas which were revised (point 3)
- Explain how the hot water and heating work
- Explain how any electrical items that come with the property work E.g. white goods
18. Contact details
Exchange contact details so it’s clear which is the best way to get in touch with one another.
19. Content Insurance
Remind the tenant that the building insurance only covers the building and not content. It’s their responsibility to get their content insured.
20. Tenancy Security Deposit
The deposit should be secured in a Tenancy Deposit Protection Scheme with in 14 days of receiving the deposit. Get that shit arranged ASAP!
21. Landlord Rent & Legal Insurance
I don’t ALWAYS get Landlord Rent Guarantor Insurance, but if I do, i’d do it at this point.
These insurance policies covers any rent losses if tenants fall into arrears. Additionally, if the tenant runs up any legal costs (e.g eviction costs), then the insurance company will pay for it.
22. Landlord Building Insurance
Landlord Building Insurance is NOT a legal obligation. However, it is highly recommended.
Buy-to-let home insurance is NOT the same as regular home insurance. So ensure you have the right type of insurance policy in place for a rental property, otherwise your policy can be deemed void.
If you currently have a landlord insurance policy in place, inform building insurance company of new tenants and update their records. Failing to do so could make your policy void!
23. Registering the new arrivals
Instruct the tenant to inform the following that they’re the new residents of the property:
- Council tax Office
- Gas & Electricity company (they’ll also need meter readings at hand)
- Water company (they’ll also need meter readings at hand)
24. Confirm registrations
Check for yourself by calling the council and utility companies that everything has been transferred over correctly.
Got anything to add? Let me know.
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11 Comments - join the conversation...
Firstly, great site, i have learned a lot from researching here in the past 2 weeks
Regarding Point 16; do you accept cheques on move in day or only cash?
I have a prospective tenant who is meant to be moving in on Sat 4th July
He has twice missed agreed meetings to sign the agreement [i used yours rather than my solicitors] and hand over deposit and sign the standing order mandate
If i accept the cheque, they move in, cheque bounces, am i stuffed?
Thanks
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I wouldn't recommend accepting cheques on move in day, because as you mentioned, they could bounce. If that happens, once tenants move into the property, you'd basically be stuffed. They'll be able to stay there for 2 months without paying rent before you can take legal action!
Kind regards
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Jools
BTW what the F*** is Charlee on?
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I think he's basically saying you should get tenants that already live locally. Right? RIGHT, JOOLS?!?!
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I had a 'full & frank discussion' with the propective DSS tenant today reminding him that i needed AST signed, deposit + advance rent before he even thinks of reversing his hertz rent-a-van onto my drive - turns out that meelado didn't, and never did, have the cash for the deposit - he hadn't even booked the van ffs - what a twat
Still, you live & learn
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I was just about to get into bed with a letting agency, but I really really dont want to pay them close to £3000 in fees and £1000s in rent upfront for doing very little, especially as it's a let-only arrangement.
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Yes you can but there may be a penalty to pay.
Depends on the terms and conditions of your agreement with the agent. Have a good read through, it should tell you in there.
If you feel the terms in it are unfair, you may have a case under the unfair terms etc act.
Even if not, it can be a starting point for negotiations.
Although it doesnt strictly apply to your case, if you mention the 'Office of Fair Trading v Foxtons' case, most letting agents tend to be more willing to do a deal.
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I initially started this website because I wanted to document my every step from property idiot to property landlord,
in hope that people would find my site and help me along the way. I literally didn't have a clue about being a landlord
when I started this website.
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