Renting out my property: Private rent or use an agent?

therealslimcj

Hi

I'm planning on buying another property but keeping my current one and renting it early next year.

Does anyone have any advice on doing it privately versus using an agent? Out mortgage repayments are such that I'm not sure we could use an agent and still cover the costs.

All thoughts appreciated...

olly300

If you are living near to your rental property it is better to learn how to manage it yourself as it's a business.

If you use a letting agent while you may not be managing the property yourself, you will still have legal responsibilities towards the tenants including returning deposits and sorting out maintenance.

littlesaint

As a tenant, I prefer to deal directly with landlords and avoid agents. I've had much better experiences dealing directly with agents.

mlz1413

About 4 years ago I rented out my house whilst I moved to another town for a new job. I've learned about renting out from scratch and will say if you do one thing Get A Guarantor!

I had a women not pay and when I chased her she moved out (midnight flit) so I had no one to chase for the owed rent, damage and cleaning. With a guarantor at least you have another name and address to chase for the money.

If you have a neighbour you like and trust give them your number and ask them to ring you if the tenants are causing a problem (music/parties/fighting). This can backfire as my old neighbour watched my tenant do her midnight flit and didn't say a word!

Ensure you do a comprehensive inventory and walk the tenants through it, ie double glazed front door to hallway, wallpaper painted green, paper lampshade, green carpet no stains, rug 6' long one stain noted. That way they can't argue that the carpet had stains / burns on it or that the cooker was dirty etc.

Do meter readings with them, type out a sheet with all meters listed (gas, 2 rate elec meter, water) and get them to sign that with the inventory form.

Do a check after 3 months and see how they are treating the place, are you happy with the way things look?

I used a standard rental form from WH Smith cost was about £5 ish. Read it and see what rights you have, tenants have, notice terms etc. Remember if your not sure you can always use an agent.

Good Luck!

therealslimcj

Hi mlz1413 and the other 2 moneysavers who have helped me here.

I am keen to get myself set up for the future as soon as possible and would prefer to keep control over the rental by lookin after it myself.

So this WH Smith form is to get them to sign? Or is it a guide?

How did you go about advertising your place and did you get decent levels of interest?

Sounds like you had a bit of a nightmare mate!

therealslimcj

boyse7en

We did a let to buy 5½ years ago and have rented our house out to the same people ever since! For me, it has been a doddle as they pay rent by Standing Order, we get very few calls of problems and there is no agent taking 15% every month for nothing.

I live in the same town, and would probably use an agent if the house was further away. As it is close, I go down and do any minor repairs (leaky taps, re-seal bath, new electric showers, so save on the agents commission on finding tradesmen too.

therealslimcj

Ah I see, cheers boyse7en. Do you have any tips for me as a future 1st time landlord? How did you find your tenants? The house I have is a fantastic location for students and a superb size and area for a family, so not sure what I'd do after moving into my other house.....

mlz1413

The form you need is an Assured Shorthold Tenancy, comes with advise on how to fill out. probably available from loads more places than just Smiths.

I advertised in local press and interest varies so if you can advertise as early as possible. Agents do offer a finding service.

It was a nightmare in the beginning as I wasn't prepared, but now I get a reference from the place of work, get a guarantor and take a deposit.

A handy hint if someone says they will take your place tell them you won't stop showing people around until the deposit is paid in full.

boyse7en

Used the local paper for advertising. We decided to advertise the house for 2 weeks and if we hadn't got anyone signed up then we would put it with an Letting Agency. We had 6 phone calls the day the paper came out and the second people to see it had it and moved in a week later.

Make sure that you do a good inventory, check the meters, leave instructions for anything you can (oven, central heating) and a typed list of 'helpful' instructions (e.g. what day the bins are collected, where the water and gas stop-cocks are, etc) and make sure that they have ways to contact you in an emergency - phone, mobile, email, work phone etc.
To judge the rent, compare to other properties in the area, you may be able to go a bit cheaper (remember you will be saving 10-15% over the people using LAs) if you need to haggle to get tennents.
I would go for a family over students, as they will be more likely to stay long term.

A_Nice_Englishman

How much do you know about the property rental business?

Starting a property rental business is like starting up any other business. You need a business plan.

Do void periods, bad debts, repairs, redecoration, legal fees,insurance, agents fees, costs of evicting bad tenants, rises in interest rates to, say, 8% and possible falls in property values figure in your business plan?

Are you familiar with the 50 Acts of Parliament and 70 sets of regulations which may apply? Did you know you can be held responsible for the anti-social behaviour of your tenants?


Then you need to look at the taxation side. Any profit you make will be taxed at your highest rate of income tax and if you make a profit when you sell you will have to pay Capital Gains Tax. though there may be reliefs especially as you have lived in the property.

Finally, is this 'investment' part of a balanced portfolio? In other words do you have substantial amounts in cash, employer's pension scheme, equities, government bonds etc. I wouldn't want to have all my money (plus borrowed money) in residential property, especially with prices at an all time high.

mlz1413

A Nice Englishman,

a question raised by your post about being responsible for tenants behaviour, if you use an agent does that responsiblity fall to them? or to the property owner?

Thanks
MLZ