Should we use a letting agent?

blizeH

We've just purchased our first rental property, and we are currently decorating it with the hope of letting it out within the next month or so.

Since we're new to this, we decided that using a letting agent to manage the property (at the cost of 8-12%, depending on the service and extras) would be a good idea, however, having spoke to family members they have recommended that we do it ourselves to save paying every month for what usually amounts to fairly little work.

Letting it ourselves is tempting because it would be a huge saving in the long run, and I do quite like the idea of being in direct contact with the tenants - we're very keen to be good landlords, and it would be good to pick the tenants ourselves. We're also quite lucky that our families have experience of doing this too and have offered to help out where possible.

But I'm wary because there are certain things that I'm not sure I'd feel comfortable doing - are house inspections usually really awkward? I wouldn't want to be overly strict, but would want to do quarterly inspections (which would be agreed when the initial contract is drawn up) and I obviously would want the house to be kept in good condition. I'm not sure I like the thought of dealing with tenants who aren't paying the rent either - I guess that's when letting agents really earn their money.

Any thoughts please? It'd be great to hear from anyone who has both managed properties themselves and used letting agents, but will gladly welcome any suggestions or advice from anyone, thank you

00ec25

for the duration of the contract it will be the tenants home, some of the language you use suggests your mind set is not yet right for being a LL...

- yes you can agree an inspection frequency as part of the tenancy agreement but all you are doing is looking for items in need of repair. "wanting the house to be kept in good condition" does not entitle you to pass comment on how the tenants live their lives in the property. If it is dirty then it is not your place or right to tell them to clean it

- you as LL pick the tenants whether you use an agent or not. The agent merely advertises your property's availability. The agent does not select the final tenant, you do

- yes dealing with rent delay/arrears is stressful and if you can't do that then you have no option but to use an agent as intermediary. You cannot of course use some big boys as your intermediary if you don't have an agent!

lavalamp

You may want to consider using an agent to advertise and help you find a tenant and then manage the property yourself as an alternative. That gives you added help at the outset (for an introduction fee) but no ongoing agency costs.

blizeH

Sorry, where exactly does the wording suggest that we're not in the right mind set for being landlords?

Thank you for the advice anyway. That's good news about being able to pick the tenants, we want people who are hopefully nice and long term (doesn't everyone!?) and would happily take a cut in monthly income for that... I don't care if the house is dirty as long as it's returned again in good condition!

Pixie5740

Just a few things that spring to mind...

You say you want to be in direct contact with your tenants. Some tenants are more self-sufficient than others. How would you cope if you ended up with tenants who call you at all hours for all kinds of things? What about when you're on holiday and the boiler breaks down or the roof starts leaking?

Just because you put quarterly inspections in the tenancy agreement doesn't mean the tenants have to let you in. Are inspections awkward? I don't know I've always just let the agency do the inspection when I'm at work but some tenants would want to be there. How would you feel having someone inspect your home every quarter?

Don't bank on agents taking the stress out of rent arrears. Ultimately you are the landlord so you would have to be the one to serve notice and then take the matter to court so the court can grant an eviction notice.

One last thing, protecting the deposit is the landlord's resonsibility even if you use an agency. There have been a few threads on this forum where the agency has been given a deposit and not protected it which could leave the landlord out of pocket should the tenant chose to sue for non-protection of the deposit.

Just my 10 cents worth.

ConfusedofYorkshire

Just wanted to say that as a tenant you wanting to inspect every 3 months would mean I wouldn't rent from you. And I'm an excellent tenant- always paid on time, never had anything deducted from deposit.

I suppose depends on what sort of let it is, if it was a house full of students then I could understand. But going into someone's home every 3 months is quite intrusive.

LEJC

I'm a new LL and opted for a managed agent.
Basically I had similar reservations to you but worked with the agent to find a tenant and whilst we have had minimal contact with both agent and tenant its workig well for us.


one thing I would try to do if I were you is negotiate a lower fee with the agent if you can we managed to get a fully managed package usually offered at between 12-15% for 8% because the property was newly refurbished and would need hopefuuly minimal management.
I understand your comments about wanting the property kept in good condition...i would hope mine is returned in good condition too...but you have to let go of it and take a step back from it being your house to it being someone elses home....
In the beginning I wanted to do quarterly inspections but was talkied ouut of it on the basis of you hand the property over to the tenant...they live there ....they can and probably will make some changes to it but providing its handed back to you in the same way you let it theres very little that you can do mid tenancy.


TBH how tidy they keep it is up to them and if they dont want to clean the kitchen and bathroom until the day before they move out then thats fine too....as LL we have no right to say how someone leads their life but we can insist that our properties are handed back in the same condition as when let out minus wear and tear.
I would strongly recommend an inventory we paid extra for one but it was a very comprehensive document that sets out the condition of the property on handover.
good luck with your rental.

blizeH

Thank you Pixie, fair points about being in contact with the tenants - it seems like for the most part the agents will just contact us if there is any problem anyway (or use their potentially over priced contractors) but you're right in that it would be tricky if we're on holiday. Family members would be happy to help out, but it wouldn't be fair of us to rely on them.

I know the inspections would be awkward, that's probably the thing about managing it ourselves that I dread the most, but I wouldn't really scrutinize the entire property; just briefly check each room to ensure nothing has gone really wrong, and as importantly as anything else ensure they're not having any problems and are happy with the property.

Thank you for the heads up on the rent arrears situation, I know some letting agents do cover legal costs but it does make sense that we'd have to do the legwork. Thanks for the heads up on the deposit too, we have already registered with one of the deposit schemes just in case we do go the route of managing the property ourselves.

blizeH

ConfusedofYorkshire wrote: »

Just wanted to say that as a tenant you wanting to inspect every 3 months would mean I wouldn't rent from you. And I'm an excellent tenant- always paid on time, never had anything deducted from deposit.

I suppose depends on what sort of let it is, if it was a house full of students then I could understand. But going into someone's home every 3 months is quite intrusive.

Thank you, interesting to know this - for what it's worth I highly doubt we would visit quarterly, however it would be put into the contract just in case we do have problem tenants who aren't looking after the house. I think more realistically it would be an inspection after 3 months, then 6 months after that.

I agree that it could be quite intrusive and that is the last thing I'd want... it was quite funny that my parent-in-laws were recently invited around by their tenants for tea and cakes as part of the inspection... if only all tenants were like that!

Thank you LEJC, some great advice there - the cheapest we have found so far is just 8% for a fully managed service, I think in part that's because it was the same company that we bought the house from so they offered a 2% discount. It's certainly a lot cheaper than the competition, and they're a good company.

Good points on the condition of the house too, like I said I don't really mind as long as there is no potential lasting damage to anything, and that the house is cleaned nicely before they return it (I'm guessing if it's very dirty and a real mess, we can take the cleaning costs back from the deposit anyway - within reason)

tiger_eyes

blizeH wrote: »

Thank you, interesting to know this - for what it's worth I highly doubt we would visit quarterly, however it would be put into the contract just in case we do have problem tenants who aren't looking after the house. I think more realistically it would be an inspection after 3 months, then 6 months after that.

Just wanted to second the previous poster. I've had a landlord who used frequent inspections (and I'm talking multiple times a week) as a form of harassment. Being inspected all the time was extremely stressful, intrusive and upsetting. I would never sign a contract that gave a landlord the right to inspect every three months - I'm sure you'd be extremely professional, but if anything goes wrong in the tenant-landlord relationship, it's open to abuse.

Prothet_of_Doom

ConfusedofYorkshire wrote: »

I suppose depends on what sort of let it is, if it was a house full of students then I could understand. But going into someone's home every 3 months is quite intrusive.

Why single out students ?

My son is a student, and (during my occassional visits) I have been quite rude to him and his house mates about their cleanliness, but put the mess into context

a) when the the exams were over they did a years worth of cleaning, in order not to loose the deposit, and b) a house worth £150K nets a student landlord £ £12000 to 15000 a year, so perhaps if the LL budgets a couple of days and £500 every 12 months, to keep his investment up to scratch, it actually makes good business sense. (Paint 1 room, fix the odd cupboard door etc)