There’s no definitive answer to the question, ‘Do I need a letting agent for my buy to let property?’
A lot depends on your personal circumstances and whether you want to pay someone else to run the property on your behalf.
It has to be said that not every property investor will be interested in becoming a landlord and they will have little or no interest in dealing with tenant queries on a regular basis and even property maintenance issues.
However, all rental properties in the UK will need to be managed to some degree, and while there will be lots of property investors doing this, there are alternatives including finding a reputable letting agent.
Question of whether you should use a letting agency
So, let’s look at the question of whether you should use a letting agency or whether you should manage your property investment yourself.
The reasons to manage your buy to let property yourself include:
- Keeping your costs down
- Knowing how to fix household maintenance issues
- If you don’t, knowing those who can do such as electricians and plumbers
- Having the energy and enthusiasm dealing with tenant problems and queries
- Keeping up-to-date with legislation affecting landlords
- You will need to live close by to your investment property.
The reasons for not managing your buy to let property which may mean using a letting agent include:
- You do not live close to your buy to let property
- You do not have much spare time
- You are not aware of landlord legislation
- You would prefer a professional to deal with tenant issues and handle maintenance problems.
There’s also another good reason for using a letting agent and that’s their ability to find quality tenants and arrange the let on your behalf.
This will include carrying out checks to ensure the tenant is who they say they are and organising the signing of the tenancy agreement for the property.
They will also carry out an inventory of the property’s condition and its contents and also collect a deposit and ensure it is kept with a Government approved third-party.
In addition, a letting agent will also:
- Deal with rent collection: The agent will ensure your tenant pays every month and chase late payers
- Full agent management: You can sign up to a full management service, so the agent will deal with maintenance and repair work and handle any tenant queries.
Obviously, there is a cost to letting agents and these fees can vary depending on the level of service you are looking for and the location of your property.
You should be looking to pay around 10% of your monthly rental income to the letting agent and around 20% if you want the full service offering.
We should highlight that the competition between letting agents means you should compare quotes from several firms and haggle if necessary to get the best deal.
Manage your own buy to let property
You may decide to manage your own buy to let property and if so, you need to understand how to find the best tenants to ensure the tenancy runs smoothly.
Essentially, you will be looking to find a quality tenant who is looking to stay in your property over the long term, so you don’t:
- Rack up costly void periods, which is when no rent is being paid because the property is empty
- You won’t be spending money on regular tenant referencing checks
- Your tenant will look after your property investment.
Managing your rental property
Also, managing your rental property does not have to be hard work or take much time because you may go months without hearing from a tenant.
This means the tenant will have been paying their rent and there will be no issues, so you will have been paying a letting agent for providing a service that you never have to use.
You must also appreciate that you will need to be on-call permanently and you will need to give your tenant your home address.
And while you may be disturbed at unusual hours, the problem may have an easy solution – or you could call a tradesman to fix it for you.
There may be property investors worried about how they should carry out the referencing of their tenants, but this is a straightforward process and there are firms offering the service.
Sign up to a professional landlords’ organisation
In addition, you can sign up to a professional landlords’ organisation will also offer this service at a discount.
These organisations may also provide an assured shorthold tenancy agreement that is up-to-date and offer advice on where you will need to hold your tenant’s deposit.
Apart from conducting tenant viewings and dealing with the check-in and check-out process, you may never have to be involved on a regular basis.
Be aware, though, that you really should have a property inventory in place so that you and the tenant knows what is in their rental home and its condition which means using photographs; you can hire some to do this on your behalf.
Perhaps the only issue that someone looking to deal with their buy to let property without using a letting agent will be down to the marketing of it when you need to find new tenants.
Again, professional landlord organisations will offer tips and advice but you can advertise on various websites, including local ones to find quality tenants.
A letting agent for your buy to let property
Deciding whether you need a letting agent for your buy to let property means considering these issues:
- A letting agent will undoubtedly save you time
- The agent will also offer help and advice when necessary
- They may already have potential tenants on their books
- Some property investors may see the cost of having an agent as money well spent.
Essentially, a property investor needs to understand that should they employ an agent to manage their rental property investment, you are handing control to someone else who may not be as committed to the success of your investment.
As mentioned at the beginning of this article, only you can make the decision as to whether you’ll manage your investment property yourself or rely on the services of a reputable letting agent working on your behalf. And it’s not just a question of money because it will be hard work being the landlord of your buy to let property and you’ll need to do this to make your investment the success it deserves to be and that is the viewpoint you should take when deciding.