There are two types of landlords:
- The professional landlord with one property or a portfolio of properties. Being a landlord is a serious business to them.
- The ‘accidental’ landlord. ‘Accidental’ because they didn’t set out in life to become a landlord but perhaps they inherited a house and decided to rent it out instead of selling it or living in it themselves. Or maybe they moved into their partners’ home and decided to rent their own property out instead of selling up.
Whichever type of landlord you are, your rental property and the service you provide to your tenant must meet any rules, regulations and laws that are there to protect you and your tenant.
There is of course a third type of landlord: the type that involves no more than taking a month’s deposit and a month’s rent in cash and handing over the keys. This may work in the tenant’s favour if they need a property without being asked for references or credit checks. The downside is that not doing everything by the book offers no protection to either the tenant or the landlord and results in unsafe properties and deposits never being seen again.
Still, we don’t need to worry about the third type of landlord in this article because they won’t be reading it.
So, whether you’re a first-timer who became an accidental landlord, a professional landlord with a portfolio of properties, or you’ve just bought an apartment in a new London development purely for the purpose of letting out, you’ve probably at some point pondered whether to manage it yourself or to hire the services of a letting agent.
What you decide will depend on your personal circumstances but here are some pros and cons of letting agents to help you decide.
Pros of letting agents
Everything is done for you
We say, ‘everything’ but that actually depends on the level of service you go for. A letting agent can simply find the tenant for you and do any necessary checks and then leave you to get on with it, or you can go down the full management route and leave everything to the agent to handle.
There is also an in-between service where the agent will find the tenant and collect the rent each month. Any repairs, inspections, etc., will still be your responsibility to organise though.
If you choose the full management service, as well as finding the tenant, collecting the rent and organising any repairs and maintenance issues, they’ll deal with the paperwork. This paperwork will include (amongst other things) credit checks, obtaining references from employers and former landlords, drawing up the tenancy agreement, arranging for an inventory, managing the deposit, organising the Gas Safety Certificate and the Electricity Performance Certificate. They’ll also deal with any eviction notices, court orders and bailiffs that may be needed in the event things go wrong.
They have expert knowledge
A local letting agent will know the local area and the market and will be able to set the rent at an achievable amount. They’ll also know the law and will be able to make sure you’re complying with everything and will update you on any new legislation you need to be aware of.
They’ll deal with any issues that arise
No matter how well-maintained your property is, there will be issues that will need to be dealt with promptly. A broken boiler, a leaking bath or a non-flushing toilet will all need to be fixed quickly and your letting agent will have a list of trusted tradesmen they can call upon to do any work required.
Of course, you’ll be consulted and you’ll still need to pay for it and this will usually be taken out of the coming rent.
Above are some of the pros of hiring a letting agent. Having a letting agent doesn’t guarantee perfect tenants who look after your property and pay their rent on time, but an agent can look after the mundane tasks for you and ensure you’re keeping within the law.
Cons of letting agents
You have to pay them
A letting agent’s services can seem expensive. Depending on the service you go for – a finder’s fee or full management service, you can expect to pay anything between 5% to 15% of the rent paid by your tenant.
You may feel you’re not in control
When you use a letting agent, you can sometimes feel as if the agent is on the side of the tenant, not yours, which can be frustrating when you’re paying the agent to work for you.
You may also feel left out of the loop as all communication goes through the agent, leaving you feeling disconnected from your tenant.
Letting agents are unregulated
Despite the myriad of rules and regulations landlords have to comply with, letting agents are unregulated. Although you’d have to be really unlucky to find an unscrupulous one who runs off with your deposit, you need to do your homework to find an established one in your area with a good reputation.
There’s a lot to consider when renting out a property, and whether to use an agent or not is just one of them. There are a lot of regulations to comply with as a landlord. Only you know if you have the time or the inclination to deal with everything yourself or if it’s more cost-effective for you to hand over everything to people who do that kind of thing for a living as you sit back and count your rent money.