By Calum Brannan, CEO of No Agent
Finding good tenants and managing your property successfully doesn’t mean you have to pay through the nose anymore.
When you ask a landlord about their lettings agent, the most common answer you’ll get is a frustrated groan. Most complaints have to do with the high costs of using an agent, with a fully managed service costing between 8-15% of the annual rent. Then, there’s also the sub-par services these agents are notorious for, with complaints highlighting lack of communication and transparency.
Despite the issues, over two thirds of the two million private landlords in the UK use lettings agents to fully manage their properties. For most landlords, especially new ones, finding a lettings agent to manage their property seems like the only natural step after acquiring it. But landlords must learn that they now have other options beyond paying a small fortune for mediocre services.
- Get over the fear
Most landlords have busy lives and fear they can’t cope with all the extra workload. A fully managed service package typically covers advertising, viewings, referencing of prospective tenants, inventory, preparing all tenancy agreements and documents, registering the tenancy deposit, rent collection, regular property inspections, maintenance handling and co-ordination, notice processing, final inspection and deposit dispute handling.
While it seems like a lot, most of these tasks are completed at the beginning of the tenancy. So, if you’re willing to put more time at the start to find a good tenant, the management won’t take up that much of your time on an ongoing basis. If you want to have a go at finding a tenant by yourself, there are separate services, such as online tenant finders and credit checkers, that can really help to save you time in completing these tasks.
- Know how to spot a bad tenant
5 Steps to Ditch your Lettings Agent
Finding a good tenant has more to do with common sense and a thorough checking process, things which you don’t necessarily need an agent for. It is vital to carry out the right credit check as well as getting hold of references from previous landlords and employers. Among the telltale signs of a bad tenant are not wanting to disclose too much information about themselves, and delaying references. There are various tenant screening services out there that can help do this for you and make this process much easier.
- Manage repairs
Unexpected repairs are what cause a landlord the most grief. Most lettings agents will add pain to injury by charging a markup for repairs and will use the contractors that give them the best kickbacks.
But if you decide to handle repairs yourself, finding the best contractors and the best prices can be a bit of a struggle. The best way to find a reliable contractor is by asking around for recommendations from people you trust. There are also online services, which will put bids out for contractors.
It’s good practice to have a reserve fund in place to deal with any unexpected damage. Keep at least a month’s rent aside for unknown repairs.
Also, regular inspections on your property can be the best way to spot an early problem before it becomes a much bigger, thousand-pound expense.
- Go digital
There are cases when a landlord simply cannot take up all of the slack from a letting agent. If you are simply much too busy to conduct regular inspections and go hunting for good repairmen, if you’re a portfolio landlord or an overseas landlord, you might think you’re stuck with your lettings agent forever. You’d be wrong.
New technology is challenging the traditional over-priced and under-serviced lettings model. High-street lettings agents need to cover their own property rents and rates, have high marketing costs and rely on people and manual processes, so they offset their costs on landlords (and tenants). Their online counterparts have much lower running costs and automate most of the processes, which often results in a smoother and much cheaper service.
One example is No Agent, which provides all the essential property management services – from finding a tenant right through to rent collection and managing repairs and inspections for a flat fee of £35 per month (or £45 per month in London). Landlords have complete visibility of their property status via the online platform, which solves the communication and transparency issues most common with traditional agents.
- Keep informed
Landlord law changes so frequently that many landlords are reluctant to give up using managed services for fear of failing to keep compliant with the law. But agents are not necessarily the best source of information and ongoing support and guidance. To begin with, they are not always up to date themselves and, more often than not, they will turn a piece of new legislation into a new reason to charge the landlord.
You will get more accurate and reliable knowledge by joining a landlord association. The Residential Landlords Association and the National Landlords Association are great for support from fellow landlords, advice and need-to-know news, and you will also get access to their free advice helplines too.
As well as talking to other landlords, the web is full of useful info created by landlords, for landlords. Take a look at Landlord News and sign up to its free monthly newsletter, which includes all the latest updates you need to be aware of.
Last but not least, the gov.uk site has a lot of great information for landlords, sadly not presented in a very friendly manner. However, there’s not a lot you can’t find there if you look hard enough.