Does “Oh yes, sir the cost of changing that light bulb for £185 is entirely reasonable” … or better still “You really must buy a furnishing package, it will only cost you £10,000 for your one-bedroom apartment” sound familiar?
When investing your hard earned cash in any other forms, be it stocks, shares, gilts etc you are normally given somewhat of a professional opinion from someone with experience and qualifications.
Investing in Buy-to-Let? Make sure you’re considering the following.
Sadly, the UK property market and the advice that comes with it is something of a minefield. Having worked in this colourful industry for over 25 years I really have seen it all – from studio apartments with nine occupants, to fires being lit on the floor of a Knightsbridge apartment to keep it warm as the tenant did not know how to work the thermostat.
Just as sadly, the typical overseas landlord who had the very best intentions to strategically acquire a UK investment property is ripe for the picking, as his eye is generally off the ball being thousands of miles away. To be an estate agent in the UK requires few qualifications short of the desire to don a shiny suit and walk with a swagger.
Not wishing to generalise of course, as there are some excellent firms, however they are a minority in their field.
Typically when appointing an agent to acquire from or indeed let and manage your valuable asset has been a process of recommendation from the developer who sold you the property (and dare I say it has a vested interest). Alternatively you may have appointed an agent purely by their location to the property itself. STOP! Press pause and inwardly digest if you will …
Property held as an investment should be treated like any other asset class and be managed in the same fashion with a commercial approach. Can you honestly say if you asked your agent what the ROI (return on investment) was on your property in the past 12 months, and if so, did they have the faintest idea what you were talking about?
Before I started my own business, I put this very question to a newly appointed property manager. This was just after they had just spent £500 of my money on a replacement microwave which cost more to install than the product itself. She blinked and asked me if I was on Facebook.
This is a very typical experience I hear about day in day out, mostly from investors, predominantly those living outside the UK, when having to interface with the dreaded estate agent.
But that’s not to say you can’t change anything about that. Here are five questions to ask yourself before appointing your letting agent:
- Is my agent’s rental price suggestion appropriate? Compare your rental prices with those surrounding you online and see whether your agent’s suggestion is what you actually should charge, or whether you should ask for more.
- Have I got the most up-to-date tenancy agreement? As changes in legislation occur frequently, it’s important to make sure your agent stays on top of what’s most relevant at the moment.
- What kind of fees will I be charged? Letting agents charge their fees differently. The most important part is: are you happy with what you’re being charge and how it is charged?
- Will my agent offer rental guarantee insurance? This is an offer that takes some of the headache out of property investment as it gives you cover – and an income – even if there’s no tenant in your investment property.
- Are there regular property inspections planned? Having an independent inventory clerk inspect the property regularly limits risks of any damage happening to your property.
- Can I get access to all important info online? In this day and age, getting all the important info online is more than just luxury, it makes managing your own time and efforts easier – especially if you’re an overseas investor.
This article is part of our “Expert Advice” series and features advice from Rupert Smith, founder of Complete RPI. For more help get in contact with CRPI here.
