A Brief Introduction To
Property Letting Agents

The Most Common Question
Asked By New Investors -
Should I Use A Letting Agent?

Property Letting Agents & Buy To Let

Buy-To-Let is the initiative of the Association of Residential Letting Agents (ARLA) with the support of mortgage lenders. It is designed to help private individuals to invest in property that is to be let to tenants.

The strong presence of these professional, bonded property letting agents has led to a change in lending criteria and the lowering of interest rates for private investors.

Should You Use A Letting Agent?

There are two approaches to managing your property. You can either manage them yourself or instruct property letting agents to manage them for you. The best approach to use is the option that best suits your abilities and needs.

Managing The Property Yourself

In the early stages, when they only have a few properties, many investors choose to manage their own properties in order to gain experience. However, you may want to consider instructing qualified property letting agents to manage your properties, trying to gain experience and knowledge from the agents before managing your own properties.

Remember, managing your properties will certainly be more time consuming, but it will provide you with valuable experience and insight into the property letting agents field. You may want to consider becoming a letting agent to further your education. Also, always make sure that there are no requirements to use property letting agents when sourcing a Buy-To-Let mortgage to finance the property purchase.

Hiring An Agent

Since property letting agents are not regulated and no license is required, you should thoroughly investigate potential letting agents. Always consider the following when hiring an agent:

• Verify that the property letting agents are full-time, specialising in letting property and management.
• The agency should also be a member of an accredited professional organisation and be VAT registered.
• Make sure the agency lets and manages properties similar to the property you own.
• Are the fees reasonable?
  - They should generally not exceed 5% of a month’s rent for managing a
     property and 10% for letting the property.
  - Remember that both fees are subject to VAT.
  - Also, normally, the letting fee is collected up front from the first month's 
     rent and the management fee is collected on a monthly basis.
• The agent and agency should also have inspection programmes in place as well as emergency procedures.
  - Are the inspections documented?
  - What about the emergency procedures?
  - Are they in writing?
  - Are emergency supplies on hand?
• Inspect property managed by the agent and agency.
  - Is it clean?
  - How are repairs handled?
  - Is a maintenance log kept?
  - Is the agent attentive and does he notice any items that need repair
     when inspecting your property?
  - If not, how can you rely on him to take proper care of your property?
  - Will tenant damage go un-repaired?
  - The agent should notice even minor damage and any potential areas of 
     concern.

Before you enter into any agreement make sure that you know how to end the relationship and if there are any penalties involved for terminating the agent early if your property is not handled effectively.

Finally, you will see a lot of articles in the press denigrating the small, local agencies, often accompanied by articles about people losing money and deposits, and ever so sincerely suggesting that you should only use the large property letting agents. Well, you'll not be surprised to learn that these articles are often written or sponsored by these larger agents or the associations to which they belong. As in most lines of business, you will often find that the smaller, dedicated property letting agents are very committed to their customers.

Summary

OK, that's the end of this introductory section on property letting agents, and I hope you found it to be informative.

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