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Find a Letting Agent – Top 3 tips

24/05/2010

 

1.Finding a reputable and reliable letting agent

The best way to find letting agents is through personal recommendation but this depends if you know any other landlords personally. There are other ways to receive recommendations however, a vast amount of information on the internet is available and it’s well worth an hour or so of your time in order for you to find the ideal and appropriate service.

But where do you start when looking for letting agents? When looking the best place to start is with who is a member of a professional organisation, such as the Association of Residential Letting Agents (ARLA), the National Association of Estate Agents (NAEA), the National Approved Letting Scheme (NALS) or the Royal Institution of Chartered Surveyors (RICS). All are bound by codes of practice and will be able to supply you with details of agents in your area that have their services independently verified.

The extent of the services may vary from agent to agent and much will depend on what your own requirements are. For example, do you just want an agent to find you a tenant, or do you want an agent to manage the whole term of the rental agreement from start to finish?

The majority of letting agencies will offer both letting and full management services, but talk to several and negotiate and understand their terms before deciding which agent or agents to instruct. Make sure you know which services you are getting and what you’re paying for, either as part of a package or as extras.

Some agents specialise exclusively in lettings, while others are linked to an established estate agency. Consider whether the agent has the right local or national branch network to market your property effectively

However, before you choose which agents you would like to market your rental property you need to decide if you will be managing the property yourself “tenant source only” or want the agent to do it “managed”. If you intend to manage the property yourself then you need not be concerned with the agent’s management services during the selection process only their marketing expertise and the robustness of their referencing procedures.

I recommend looking on the Rightmove website to see which agents have properties on their books that are similar to yours. If you use an agent that has a few properties like yours on their books they are likely to already be attracting interest from tenants looking in your area and price range. Tenants will usually look at a few rental properties in one trip so it helps if they are with a single agent. An agent that is already marketing properties like yours is also more likely to have a better idea about the current achievable rental value. You can search for agents in the area or click through from the properties that you have identified.

The next step is to invite your selected agents to visit the property and give their views on the current market. What you are looking for here is not just a figure but some idea of how the agent has arrived at that figure. A good letting agent should be able to give you details of at least a couple of similar properties that they have let recently which are comparable to yours. Having had your valuations decide on the best asking price, giving more weight to the figure quoted by the agent with the best comparable evidence.

Ask the agent how they market the properties and why. The largest property portal is Rightmove Agents use many of the other sites just because their competition does too! In my opinion, it’s vital that you get exposure to this wider market.

It helps to enquire about  To Let boards, waiting list of potential tenants, newspaper adverts, agency window adverts and any other novel marketing methods that an agent may employ with success. Make sure the agent gives you specific details i.e. your property will be advertised in the local paper weekly or fortnightly. All of the marketing services offered should be included within the fee.

Make sure that you are given a copy of the agents Terms & Conditions and schedule of fees when they visit you; this is the time to try and negotiate a better deal for yourself.

If the property is vacant you should provide a set of keys for the agent that you are using. Arranging delivery of keys can cause disputes and may mean that viewings are missed which could cost you money! Don’t forget to collect all the keys once the property is let unless you intend to use a managed service in which case the agent should retain one full set.

This means that your agent will have considerable experience and will understand not only the process, but any new legislation that affects the world of letting. As well as knowledge officially recognised agents will have some form of professional indemnity insurance, will be able to hold separate accounts for each of their clients and in most cases will take their fees from the landlord and not the tenant.

Ask your preferred agent if they have any landlord or tenant testimonials. Many smaller agents have lower fees than say a national chain however; level of service can very much depend on a local office. Any testimonials that are provided should be specific (i.e. not generic) and recent.

Once you have chosen your letting agent from the range of agents out there it is normal practice to sign an agreement. This agreement will usually cover factors such as the agent’s right to let the property on your behalf as well as manage the tenants throughout the rental period. It is vital to read through this agreement in detail so that all involved in the process understand the responsibilities both you and the agent must undertake. If you are unsure, it is advisable to seek legal advice, and if you disagree with any of the conditions, having them removed from the agreement should be a possibility, although some clauses will naturally be standard. If you are not satisfied, find another agent who will be able to draw up an agreement that you are happy to sign. Make sure that you let the agents understand the restrictions on the property so they can be related to the tenants; examples may be access to the loft or the use of an open fire.

Once the agreement is signed and you have a copy all of the responsibilities can be left to the agents. Ultimately you have hired them to manage the property so leaving them to do their job is highly advisable. Your interference will no be appreciated. If however you are unhappy with the service, changing agents is always a possibility, make sure to check the agreement so you know the notice you must give for the termination of the contract.

2.      What to expect from your letting agent and what they expect of you

As most letting agents operate on a ‘no let, no fee’ basis, It may be appropriate to appoint more than one agent to increase the chance of letting your property (some agents charge a fee to have a property included on their list). It is important to remember that agents offering low charges are not necessarily the best agents to use. Opt for those who provide a comprehensive service and can demonstrate success in the local market, with proof! Choose a letting agent which lets properties similar to yours, and which you think would attract the right kind of tenant with suitable references and achieve the highest possible rental price.

This service provided by an agent should include finding and vetting suitable tenants, obtaining references and credit checks, preparing a tenancy agreement and inventory. For a managed service the agent will also collect the rent monies, may pay bills, regularly inspect the property and oversee any necessary maintenance work

Provide your letting agent with as much information as possible about the type of tenant you want. For example, stipulate whether you want a young professional or married couple, a personal or a corporate let, and whether you are looking for a long-term tenant. Landlords benefit by having long-term tenants as it excludes ‘voids’ (periods when the property is empty).

Your preferred agent should be able to arrange to have Energy Performance Certificates “EPC’s” Gas Safety certificates & Portable Appliance Testing “PAT” testing on your behalf. Remember, that as they will be procuring these services on a bulk basis, you should in turn benefit from a good rate yourself. Shop around first and see what the “market rate” is locally. If the agent is substantially more expensive, arrange these surveys/tests yourself.

If your property is a new build or not local to you, the agent can also sometimes arrange for carpets, curtains or blinds to be fitted on your behalf as well as collection of keys. These supplementary services are not usually included within any fee but chargeable either as a commission on actual cost or on an hourly rate. It’s important to discuss these and incorporate them into any agreement that you enter into with your preferred agent.                                                                                                                                           

You agent should undertake regular inspections of the property; ask to be sent copies of the reports to make sure that they are being undertaken!

Make sure that you provide the agent with a full set of keys, alarm code, details of any appliances that are to remain in the property along with instruction booklets (if the originals are lost, copies are usually available for download, check the manufacturers website). Also advise the agent of the current energy suppliers and importantly, if you have any objection to the tenants changing suppliers during the course of their tenancy.

Ensure that the agent has a means of contacting you in writing, via email and in emergency on the telephone.

Any reputable agent will have an established network of local tradesman who will be able to undertake routine repairs and maintenance as well as emergency works on your behalf. It is advisable to agree a limit with the agent whereby they can instruct the works direct to the tradesman rather than obtaining your permission first. However, discuss this process with the agent at the outset and ensure that they are not using their favourite tradesmen and then earning a hefty commission on top at your expense.

Remember that the agent is there to provide you with a service but you should always respect that this does not necessarily mean that they are exclusively yours 24/7. Even when opting for a fully managed service, keep in regular contact with the agent.

3.      Fees

It is normal to pay a fee once a tenant has been successfully secured by the agent. You should never be expected to pay a registration or up-front fee. This fee may be a fixed sum or based on a percentage or proportion of the agreed rental sum. If you have opted for the tenant sourcing service only, this will be all you need to pay. Remember, if you only opt for six-month tenancies each time, this means you could have to pay twice in a year although if your agent charges a renewal fee, this should be considerably less as it would only involve admin time in drawing up a new agreement.

Ongoing fees for a managed service are normally a percentage of the rental income over the letting term, usually starting from 10% of the rental price achieved although fees can be as high as 15% of the rental.

Other services can be arranged with your agent and you should consider these prior to entering into an agreement as they may not be included within the fixed or ongoing fees.

Disclaimer

The author is not regulated by the Financial Services Authority or any other body to give financial advice and the information herein is an expression of opinion by the author. The author recommends that you seek independent legal and/or financial advice before entering into any agreement in relation to property investment.

This article assumes that you have the correct and adequate funding in place for your acquisition. We are able to make referrals to an IFA for further information on financial products related to property purchase.

About Walker Fox

Walker Fox Land & Property Ltd acts as professional property sourcers working with investors to add to their property portfolio in West Yorkshire.

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