The ultimate guide to using a letting agent13-01-2023 | Other
Being a landlord comes with a high level of responsibility, and it can be fairly demanding at times. A landlord’s responsibilities include taking care of repairs to the structure and exterior of the property, heating and hot water systems, basins, sinks and baths, ensuring the safety of gas and electrical appliances, the fire safety of the furniture and furnishings, and looking after the common areas in multi-occupancy dwellings.
Landlords are also responsible for maintaining garden areas that tenants cannot be reasonably expected to maintain themselves, such as weeding, guttering, or repairing outdoor sheds. In other words, you’ll always be busy and have a fair amount on your plate.
Using a letting agent to take care of things can help to lift some of the burden from landlords. You will pay the agent a fee to act on your behalf. The agreement between you will require the agent to ensure your legal responsibilities to your tenants as a landlord are fulfilled. Choosing a letting agent is a crucial decision for landlords, and it doesn’t always come cheap.
So, we have have taken a deeper look into what landlords can get out of hiring letting agents in our ultimate guide to using a letting agent.
Why use a letting agent?
If letting agents charge a fee and you could actually do it all yourself, why use them? Well, there is a great deal that goes into being a successful landlord who takes good care of their tenants, and it can be better to assign this long list of tasks to a dependable letting agent. A decent reputable letting agent should provide helpful responses to tenants’ queries and ensure they are fully content with their living conditions in your property.
Here are some key examples of useful things letting agents can do on behalf of landlords:
- Working to keep your rental property safe and free from any health and safety hazards
- Asking permission and giving tenants in situ 24-hour notice for a property inspection
- Showing prospective tenants around your property
- Handing tenants sufficient notice if you want to evict them
- Dealing with checking in new tenants and also checking out tenants when they leave. This includes giving out and collecting door keys.
Letting agents charge a fee for dealing with vital certificates and documentation that landlords are required to have in place by law in order to rent a place to tenants. Certificates and documentation that agents can help you provide tenants with include:
- Gas safety certificate
- Electrical safety certificate
- Energy Performance Certificate (EPC)
- Proof of tenancy deposit protection
- Fire safety measures
- A house in multiple occupation license (HMO) from the local authority if you’re renting to five or more tenants from two or more different households.
- Landlord insurance
You may need to provide your tenants with your landlord insurance details so that you can inform your tenants of any items they will need to cover themselves. At CIA, we offer landlord insurance packages that cover the vast majority of the rental market and will help to safeguard your investment. Our prices are affordable and reasonable.
Responsibilities of letting agents
Just like landlords have certain responsibilities to fulfil, so do letting agents. Letting agents control managing the letting of your property. They take on responsibilities such as corresponding with the tenant(s) throughout the duration of the tenancy, arranging maintenance and repairs, inspections, check-in, check-out, and mediating deposit disputes.
A letting agent is responsible for always working in the best interests of the landlord. After all, you are paying for their services. Agents should also treat tenants with respect and fairly. Should a letting agent fail to fulfil their responsibility to take adequate care to protect your rental property, you can sue them for damages due to loss of rental income.
You can choose to manage some areas or the whole of your rental property as a landlord. A let only means a letting agent finds you tenants and deals with the paperwork to help move them in, and you then take over the rest of the management of the property from there. A fully managed rental property means the letting agent takes care of everything from start to finish, including the collection of rental payments from tenants every month. This arrangement allows you to sit back and relax as a landlord!
The benefits of using a letting agent
The reason why many landlords decide to use a letting agent is that doing so comes with some clear advantages. Here are a few of the different benefits of using a letting agent.
A letting agent will make sure you get your rent
Many would say having to worry about constantly having to chase tenants for rent is one of the main bugbears that puts them off becoming a landlord. However, using a fully managed service with a good letting agent means that they do the chasing for you. Their professional and proactive approach should minimise the risk of late rent payments and ensure that your tenants are being kept in check with any outstanding bills.
They can help you find the most suitable tenants
Letting agents can help you find the most suitable tenants through their extensive screening and referencing process. So, having the support of a letting agent to find new tenants can put your mind at rest. With that said, it’s impossible to completely remove the risk of any problems occurring with tenants down the line – no matter how extensive the screening process is.
They provide their own tradespeople for emergency maintenance and repairs
If your property is run by a fully managed letting agency, all maintenance and repair matters are taken care of as part of the service. This will include a 24-hour emergency call-out service. So, you won’t ever have to worry about getting a call in the middle of the night to come and sort out a broken boiler.
To help you comply with regulations
An agent can help you ensure everything is 100% in line with regulations. There are legal requirements that rental properties must meet in the UK, including gas and electrical safety certificates, fire and safety regulations, and Energy Performance Certificates. Letting agents can carry out these essential tasks for you and all legal costs will be covered in the fee you pay them.
To continue building and expanding your portfolio of rental properties, you want to make sure you fall in line with all the regulations. Falling foul of the regulations and putting tenants at risk can lead to landlords receiving heavy fines, having an HMO licence taken away, and even imprisonment. In a recent survey, 56.4% of landlords questioned admitted to using letting agents to ensure they are compliant.
A real time-saver
Being a landlord can undeniably be a time-consuming venture. Time is precious in adult life, particularly if you have a family and close ones to look after. In addition, time is money!
Letting agents and everything they do on your behalf can save you spending a great deal of your time doing maintenance and repairs on your property and redressing any grievances from tenants. Therefore, time is also another key factor that can push landlords towards opting to use a letting agent.
Allows a thorough inventory to be carried out
If you have kitted out a rental property with furniture for tenants, you want to have an in-depth inventory for backup. Letting agents, as a third party, provide in-depth inventories with photographs prior to tenants moving in. Of course, this is something you can do yourself as a landlord but let’s face it – it’s a pretty tedious task. Including it as part of your letting agents’ service means it’s one less thing for you to worry about.
You’ll always have a middleman!
If you already lead a busy life, it can be handy having a letting agency acting as a middleman and helping you manage your property. Don’t underestimate just how much peace of mind using a letting agency to deal with rental tenants can give you.
The disadvantages of using a letting agent
So, using a letting agent sounds pretty good, right? However, like with everything in life, using a letting agent comes with its pros and cons and there are some downsides to using a letting agent as a landlord.
They can be costly
Using the services of a letting agent is all very well, but don’t forget that they don’t come free and can be pretty pricey! Letting agents can charge up to 15% of the total monthly rent. So, be selective and picky when choosing a letting agent. Have a good think about what they can offer you and compare it to the fee they’re asking for.
They charge additional fees for repairs
Yes, one handy part about getting a letting agent is they have their own emergency contacts of professionals to take care of your maintenance and repairs. However, when the letting agent arranges repair work on your behalf, they will often charge you an extra fee for this service.
You may have to cover lots of administrative costs
If there are issues such as damage to your property from flooding or evicting tenants, this may come with extra paperwork for the letting agent to process. The agent taking care of mountains of paperwork and administrative tasks for your properties could come at an extra cost.
Your own knowledge and experience may be higher
Of course, all letting agents claim to be experts in managing tenancies and the letting game. On the other hand, if you’re an experienced landlord, you could feel that you know how to deal with tenants and maintenance and repairs issues etc better than any letting agents out there.
Have a long think about how much in-depth knowledge you have about being a landlord, and whether you could realistically do it solo. Ask yourself if you’ve got enough time if your life to make it a successful business venture.
You won’t get to build a rapport with tenants
It depends on your personality and the approach you prefer to go for as a landlord, but you may prefer building a personal rapport with tenants. However, using a letting agency will mean you won’t get to form a relationship with tenants quite to the same extent.
How do you deal with a bad letting agent?
Like in any industry out there, some letting agents provide a much better quality service than others. So, how do you deal with a bad letting agent?
Start with writing a polite complaints letter to the letting agent
All letting agents will have a complaints procedure as a company policy, and you can most likely find it on their website. So, start off with writing a clear and concise yet politely mannered complaints letter addressed to the letting agent to make your point. Then, wait up to 8 weeks maximum to see if they respond.
The next step is sending your complaint to an independent complaints body
Have you waited 8 weeks and not received a reply for a pressing issue with a letting agent that needs addressing ASAP? In that case, contact an independent complaints body, such as The Property Ombudsman or The Property Redress Scheme.
Remember to explain your complaint in detail. You should be able to do all this through an online form on the complaint body’s website. If not, send them a letter by post. If you have lost money due to the incompetencies of the letting agent you used, these bodies should be able to help you get compensation.
What do letting agents charge?
The fees letting agents decide to charge landlords can vary quite a bit. The fee you will pay usually changes depending on the services you go for. Here is a summary of the letting agent services you can get:
- Let only – finding tenants and organising referencing, collecting deposits and then composing a tenancy agreement. This tends to include a one-off fee
- Rent collection – the agent will collect rent monthly and follow up on any arrears if any rent payments are late. you can expect to be charged a fee of around 5-10% of the monthly rent for a rent collection service
- Full management – this includes all of the above, plus the agent arranging maintenance and repairs and being the point of contact for tenants. This all comes at a price and the fee for full management can be as high as 15-20%.
If you feel a letting agent is overcharging you for their services, there are plenty more options out there in the vast UK letting agent market. So, don’t be afraid to walk away if you aren’t satisfied with the service you will receive relative to how much it will cost you.
Which letting agent should I choose?
Are you a landlord that has decided to use the services of a letting agent? Now it’s a case of you deciding which letting agent to go with, bearing in mind that you’ve got profits to make. The importance of picking the right letting agent to work with is paramount, so do your research and think logically.
Try and decide the best letting agent for you based on factors such as:
- Looking at accreditations and insurance
- Making sure their services meet your specific needs
- Reading all of the small print in any literature on and offline about the services they offer
- Checking whether they vet prospective tenants properly. If they don’t, this could cause you headaches down the line.
Regular home insurance policies simply aren’t designed to cover rental properties. Although using a letting agent will help you keep on top of things like chasing up rent and keeping on top of repairs, certain circumstances, such as fire and flood damage, require you to have landlord insurance to protect you.
You need a robust landlord insurance policy to cover yourself, your property, and your tenants. As a result, taking out adequate landlord insurance is a worthwhile investment all modern-day landlords should make, without a doubt. Get in touch with us at CIA today to learn more about our landlord insurance and landlord contents insurance.
We won't be beaten on any like for like landlord insurance quote.Get a quote