There are two types of landlords; those who let their properties independently and those who rely on letting agents. On either side, there are those who are thinking about crossing over. For new landlords, trying to decide whether to employ a letting agent or take care of renting yourself can be tricky. With so much conflicting information out there, we wanted to present to you a list of pros for hiring a letting agent, and the cons that sit alongside them.
Pro 1: Someone else will deal with the rules
There are over 400 rules and regulations around putting your house up for rent. If you breach these rules and regulations, you could be slapped with a fine of up to £30,000. When you outsource to a qualified letting agent, you’re giving them the responsibility of making sure your home is fit for tenants to rent, so there’ll be no reason to worry about forking out a fortune should something go wrong.
Pro 2: No late night phone calls
Many tenants see the convenience of calling someone else to deal with a leaking roof, broken boiler or damp problem as a pro to renting. If someone is paying you to live in your house and something goes wrong, then they’re going to call you to fix it, even if it’s 2am.
Letting agents will take these calls for you, so you’ll never have to worry about calling boiler companies while you’re on a family holiday or leaving a wedding because your tenants have had a break-in.
Pro 3. They’ll do all the checks
Letting agents are likely to have a strict vetting process in place, which means they won’t take it at face value that a potential tenant is clean, tidy and able to pay their rent. This means you’re much less likely to have someone living in your home who trashes it or doesn’t pay you on time.
Pro 4. They’re a buffer between you and the tenant
Maybe you need to evict someone because you want to sell your home or they are no longer a suitable tenant. Perhaps they’re just the type of tenant who calls their landlord three times a week. Maybe they’ve left the house in a state when they moved out, and you need to keep some of their deposit. A letting agent will speak to the tenant on your behalf. You never need even meet them if you don’t want to, which means, in theory, all the perks of letting your property without any of the hassle.
Now for the cons…
Con 1. You have to give them some of the rent
If you’re managing your property as a landlord, then you can take home all of the rent you earn each month, which means maximising your profit. Most letting agents take 10% – 15% of your rent for a full management service, plus there’s often additional fees for finding tenants and an annual tenancy renewal fee. For a 12 month fully managed service on a 2 bedroom home rented at £750 a month, you’ll be paying around £1,830 to your letting agent.
Con 2. There can be other fees, too
Make sure you know what you’re getting for your money because if a letting agent needs to evict a tenant or arrange repair work, some of them do not include this in the original agreement, which means they’ll charge you even more.
Con 3. There are horror stories
There have been instances in which tenants have been paying letting agents and letting agents have not passed rent on to landlords, either because they’re con artists or because they are in financial difficulty and on their way out. These instances are few and far between but they do happen, and when they do it’s difficult to get your money back. Make sure you check the reputation of your letting agent thoroughly. How long have they been around? Do they have good reviews? Can you speak to any of their other landlords about the service they’ve received? How long to their landlords employ them for on average?
Currently letting agents don’t have to be licensed to practice, so there’s nowhere officially to check for quality.
Con 4. They’re a buffer between you and the tenant
We know we used this as a pro, but it’s a con, too. If there are any issues between you and your tenant and they have to be relayed through a letting agent, it can mean it takes longer to resolve. You might also be tempted not to meet your tenants, which can be a bad thing. It’s always worth knowing who is living in your house.
Whether you employ a letting agent or not really depends on the type of person you are. If you’re organised, pay attention to detail, and have a lot of free time then you’re likely to be capable of managing your property yourself, which means more profit for you. If you’re like the rest of us, it’s probably worth investing in someone who can handle the small stuff, so you don’t have to.
Do you have the right Landlord insurance in place to protect you and your property? Check out our useful Landlord insurance policy here.