Landlords are prioritising choosing the best letting agent to help them navigate the market, but 49% of landlords opt not to use one.
There are myriad reasons to appoint a letting agent to manage your property investment, yet there are also plenty of arguments for landlords choosing to go it alone instead. The decision can depend on your personal circumstances, such as whether you have the time and capacity to manage a rental property yourself.
Those who do use a letting agent are becoming more picky about which one they choose to work with, though, according to recent comments from Jo Eccles, founder and managing director of Eccord. As competition in the UK rental market continues to grow, ensuring you offer the best service is now paramount.
Eccles points out: “Many are choosing to move away from underperforming letting agents or property managers with high staff turnover, as they recognise the importance of tenant experience now more than ever, if they’re to achieve high rent increases.”
This is partly because of added cost pressures being faced by mortgaged property owners at the moment, including landlords, with many increasing their rents “by an average of 15% at renewal”. Of course, some landlords are exiting the market during this time, while others are reassessing their options but remaining in the space.
According to the latest data from the English Housing Survey, while 49% of landlords choose not to use an agent, 46% use one regularly, showing a fairly even split in the market. Meanwhile, a further 5% use an agent on an ad hoc basis, which could give landlords the best of both worlds.
What does a letting agent/managing agent do?
All letting agents do not come equal, just as all landlords will have a unique set of circumstances that determines whether or not their best option is to use a letting agent. Each agent offers a different level of service, normally for a percentage fee of the rental income, which can vary and can sometimes be negotiated.
For example, you could opt to appoint an agent to find tenants and arrange the let, which includes running reference and credit checks, collecting a deposit and issuing a tenancy agreement and inventory. Others will also collect rent each month, and deal with any late payments from the tenant.
For a higher level of service, some landlords appoint a letting agent to manage every aspect of their rental property/properties. This could involve all of the above as well as being the main point of contact for the tenant, and arranging maintenance and repair work.
Aside from this, agents stay abreast of the latest rules and regulations in the private rented sector, which are often subject to change. There are many things landlords must take into account to stay on the right side of the law, from health and safety requirements to eviction rules, which can be complex.
Well-known television presenter and investor, Phil Spencer, recently pointed out “just the everyday responsibility” that letting agents take on, not to mention handling “the unexpected” such as leaks, break-ins, and dealing with stressed tenants.
“There’s finding and vetting tenants; there’s the check-in process at which specific documentation needs to be handed over and, often, detailed inventories undertaken, in addition to a deposit being taken and secured in line with legal requirements,” he said.
“Next up comes rent collection; and possibly there’s full management covering all the health and safety checks, EPC inspections and management; and finally there’s check out – the final inventory reconciliation, return of deposits or part-deposits, and handling any outstanding issues or disputes.”
Should I use a letting agent?
Those with large property portfolios, or investment properties that are far from where they live, often appoint a letting agent to save themselves time and the need to travel. Of course, it does mean you are losing a cut of your rental income.
For landlords who choose to manage their own rental property, the benefits include being able to vet and meet your own tenants and have a relationship with them, as well as having the opportunity to carry out repairs and maintenance yourself, which can be cheaper.
There are numerous apps, websites and tools to help you with things like drawing up a tenancy agreement, staying on top of legal requirements and communicating with your tenants, making it easier than ever to self-manage. This option also means you keep more of your rental income.
