As a landlord, you will want to maximise the return on your investment, manage the risk involved in renting out property and minimise the amount of “hassle” involved in property management. To achieve this, you will need to find a great letting agent.
When it comes to renting property, there are a couple of common misconceptions;
Firstly, it’s a common misconception that renting out a property is very straightforward; indeed, many agencies will simply tell you not to worry as they have “got it covered”. Well unfortunately it’s not quite that simple as there are about 145 laws and over 400 regulations that you need to meet as a landlord to legally let a property.
Secondly, it’s another misconception that, if you appoint a letting agent then you “pass the risk to them”. Unfortunately, this is not how the law of agency works. When you appoint an agent, you authorise them to act on your behalf, but you remain liable for almost everything they do.
Therefore you can see how important it is to work with an agency that has the right experience, process, systems and “care” to manage your properties well. So how can you be sure that you are appointing a letting agent that will help you achieve your objectives as a landlord?
Experitse – given the significant amount of legislation applicable to renting property, lettings and management is a more technical and complex discipline than most people recognise. As noted above, to rent out property legally, you need to take into consideration about 145 laws and over 400 regulations. What is more, these rules and regulations are changing at a rapid pace. The consequences of breaching any of these laws and regulations can be significant and range from not being able to serve notice on your tenant for possession of the property, to fines and in certain circumstances, even imprisonment. Therefore, when appointing an agent, make sure that they are up to date with all of the legal and regulatory requirements. For further information on the legal requirements please see here;
Accreditation – one way that you can ensure that the agent is diligent and up to date in their knowledge and capability is to look at what accreditations they have. ARLA propertymark is probably the gold standard for letting agents and membership requires the agent to maintain educational standards and enforces strong process and procedure on the agent in key areas such as client money handling.
Memberships – in addition to ARLA Propertymark, you should ensure that your letting agent is a member of a Property Redress Scheme, is registered for data protection with the Information Commissioners Office, has Client Money Protection and is also a member of a Depository Protection Scheme. These accreditations go a long way to demonstrating your agents competency.
Tenant Management – while the landlord is the client of the letting agent, any good agency recognises that the tenant is paying the landlords income and will therefore provide exceptional service to tenants. Great tenant management results in long term retention, reduced costs for finding new tenants and fewer void periods between tenancies. To maximise rental return, be sure to select an agent that has an ethos of providing exceptional tenant management.
Quality of staff – a letting agency is only as good as the people that it employs. High staff turnover rates in some letting agencies can result in poor quality customer service. Also, dealing with junior and inexperienced staff members frequently results in poor selection of tenants, rent arrears, sub-standard property maintenance and non-compliance with critical legislation. The result is more hassle for the landlord. Make sure that any agency that you consider has a suitably qualified, stable and experienced team.
Reviews – one of the best ways to find out how good an agent is, is to look at the reviews that they receive on websites like Google Reviews and Trust Pilot. Does the agency have a policy of collecting customer feedback? If they don't, that will provide you with a clue that customer service might not be high on their agenda. Why not go even further and pick a couple of reviews that have been published and ask the agent if you can talk to the reviewer so you can dig a little deeper into the experience they had with the agent.
Insurance – make sure that any agency that you are considering carries an appropriate amount of professional indemnity insurance.
Terms and conditions – be careful to avoid onerous terms and conditions in an agency's lettings and management agreement. Some letting agents will require you to pay a fee if you terminate the contract and some even require you to pay them a commission if you sell the property that they are managing. Any letting and management agreement should be fair and balanced and be clear on the services to be provided and fees to be charged.
Crisis management – make sure any agency that you are considering has a process in place for dealing with crisis management. Ask them what they would do in the event that there was a major electrical issue or water leak in the middle of the night or on a weekend when their offices were closed. Out of hours maintenance can be expensive, but not remediating a problem quickly can turn an issue into a complete disaster.
Service mentality – choose an agent that actually “cares” about you as a client, the property they are managing and the tenant. You can teach people to manage property and understand the technical requirements, but you can't teach someone to "care" about what they do and how they do it.
Trust your gut – at the end of the day, you can evaluate all of the evidence and data, but you should also trust your gut a little. Is the letting agent someone that you feel you can trust and that you will enjoy working with?