As a landlord, choosing the right letting agent is important, because the liability for your properties ultimately falls to you.
Having someone responsible for managing them on your behalf ensures you remain within the law and maintain a good relationship with your tenants.
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It’s crucial to choose a professional who knows their role inside-out and isn’t going to let you down.
Choosing a service level that’s appropriate for your needs is important too; it all depends how much you wish to involve yourself in the properties’ day-to-day management.
What is a letting agent?
Whether you’re an established private landlord or you’re considering renting your home out to tenants for the first time, employing the services of a letting agent can take the strain on your behalf. It can make life much simpler, especially if you have a number of properties that take up a lot of time.
Every agent is different, but in simple terms, they are facilitators who enable an agreement to be drawn up between a landlord and the tenants to rent any residential property.
It has become common practice in the UK, where the number of letting agents increased by 10.6% between 2022 and 2023, bringing the total to around 24,000 nationwide.
What does a letting agent do?
Every agent is different, but in general terms, there are three different levels of service.
The most basic level is finding tenants for you, as the letting agent will ensure the best tenants are secured for your property. This includes taking professional photographs inside and out to advertise the property where it will receive the most interest. They will also set up and attend viewings, carry out reference checks and complete Right-to-Rent checks, ensuring the potential tenants can legally rent your residential property. Once a suitable tenant has been found, the agent will draw up and finalise a tenancy agreement and arrange a date for them to move in.
The second level of service is employing the letting agent for rent collection. Their fee will be higher in this case than it is for simply signing up new tenants, as they will take responsibility on your behalf for protecting the tenants’ deposit and collecting rent on a regular basis. They will chase for rent arrears and offer you advice for cases of serious arrears, serving legal notices if required. Some agents provide insurance to protect your regular income should rent arrears occur.
The highest level of service is fully managed, when the letting agent takes full control of looking after your portfolio. This includes finding suitable tenants, collecting the rent and communicating with the tenants as long as they live in your properties, organising regular inspections, ongoing or emergency maintenance, handling the end of each tenancy and dealing with deposit disputes.
Is the letting agent responsible for furniture?
As the landlord, you’re responsible for providing the fixtures, fittings and furniture for your portfolio. This includes essential white goods, such as a cooker and fridge-freezer, for properties advertised as unfurnished. It also includes full furniture packages for every room for your furnished buy-to-let and HMO properties.
If you rent to students, you’ll still need to provide student furniture for each room and communal areas. However, once you’ve provided any contract furniture, you can then delegate the responsibility of carrying out checks on its condition to your letting agent if you’ve signed up for their full-service package.
If there are any issues such as tenants damaging your furniture, items needing replacing or repairing, or complaints about the fixtures and fittings, a letting agent can mediate between you and the tenant. This can make life easier, especially if you have a lot of properties to manage in your portfolio.
How much do letting agents charge landlords?
Letting agents must display their service fees by law both on their website and in branch. This enables landlords to compare costs and work out the best deal.
The service to find tenants normally has a one-off upfront cost that equates to about one month’s rent. Collecting rent normally costs a percentage of the month’s rent. Often, this is 5%, but it can vary depending on each individual letting agent. The fully managed service can cost you around 15% to 20% of the month’s rent.
As with anything else, it’s worth shopping around and comparing prices to get the best deal.
Pros and cons of letting agents
It can benefit you as a landlord to have a letting agent carry out many of the required duties, especially paperwork and organising maintenance and repairs, and considering there are more than 400 regulations that govern renting and managing properties in the UK, it can seem like a no-brainer to employ someone else to do it for you.
Agents are employed to carry out the most stringent reference checks and vetting procedures to ensure you get reliable tenants. They will also be up to date on the newest legislation, providing an impartial link between you and the tenants to help deal with dispute resolution negotiations.
Their involvement will help to reduce your workload, and this normally goes a long way towards combating stress levels. However, it comes at a financial cost, especially if you choose to use the agent’s full services. In today’s economic climate, this may not be something you can afford.
Be mindful; there may be other costs, such as an arrangement fee for organising maintenance and repair work on your behalf, on top of the expense of the jobs. This can include an additional agent’s fee for organising regular services from third parties, such as gas safety certificates and electrical checks, so it’s important to always check the small print to understand what you’re signing up for.