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

Neemi

I have bought a brand new flat which I was going to use an agent for the management etc. But people have said to me that why don't I do it myself.

I have moved cities and the flat is 80 miles away from me, but as it is a new flat there shouldn't really be any maintenace probs etc.

I was just wondering on what peoples thoughts/recommendations are on whether I should do it alone. ie. the letting/management or should I get an agent and pay them the 10%.

Cheers, in advance
Neemi

A_Nice_Englishman

Neemi wrote: »

I have bought a brand new flat which I was going to use an agent for the management etc. But people have said to me that why don't I do it myself.

I have moved cities and the flat is 80 miles away from me, but as it is a new flat there shouldn't really be any maintenace probs etc.

I was just wondering on what peoples thoughts/recommendations are on whether I should do it alone. ie. the letting/management or should I get an agent and pay them the 10%.

Cheers, in advance
Neemi

You may not have any problems with the property but you may have problems with the tenants (anythng from non-payment of rent to anti-social behaviour). As long as you're willing and able to deal with these and do the 160-mile round trip when necessary then self-management would be viable.

If your business is only marginally profitable (like many new BTL landlords) you may not have any choice.

rr01

Be very careful, you have already mentioned that your mortgage payments are tight before you even consider the costs that are involved with renting out your property regardless if you are renting privately or via a letting agent. Think about the costs, maintenance & repairs, tax on the earnings, periods where you may not have a tenant. You really should have a contingency in place of funds to cover this, else you may find that your income is less than your expenses. Property Rentals can all too often be taken on lightly without the bigger picture being considered.

If I was to recommend one then it would be to go with an agent, making sure that they are acredited to schemes such as arla (association of residential letting agents) or nals (The National Approved Letting Scheme). This will at least give you the comfort that they adhere to an industry standard for letting property. Look around in the area where you are looking to rent, take your time and do your research and financials well.

ms_fashionista

I used a letting agent to find tenants. They were fine to begin with and then when their tenancy ran out we renewed it privately. Couple of months down the line they were sacked (2 young guys), couldn't pay their rent. 1 left but the other was under house arrest!!! (apparently he was a drug dealer & the police raided the house & he was electronically tagged) and wouldn't leave the property. Started legal proceedings to evict him but after OH cut off gas & electricity (it was a cold November) he left.

This is the only bad experience I've had & I am about to rent my house and this time I will be taking out rent guarantee insurance (£52 for 6mth tenancy period) and the relevant credit checks in order to validate it.

Best tenants are generally ones with young children as they will not risk losing a roof over their heads.

I had a letting round that quoted that the best rental I could get was £1250-£1500per mth. I posted the house on Gumtree & was inundated with calls but am letting to a couple with 3 kids who go to school in the area & will be paying £1300 per mth.

ms_fashionista

Sorry got the last bit wrong. The letting agent quoted £1000-£1200 max for my area!!!

LittleYoda

Check out landlordzone.co.uk - packed full of useful info, although i have just checked and the site does seem to be down now.

If your margins are tight be wary, as if the tenant decides not to pay you will soon be eating into any other source of income, and cashflow wise it will soon become a liability rather than an asset.

Best to get any possible tenant credit checked and referenced - a company call Homelet provide this service. The rent can also be insured - well worth the money, but again eating into your profit.

With regards to doing it yourself or using an agent - if you just sticking with the one property i would use an agent as there is a lot to know, and you dont want to get tripped up. Having said that it is nothing that cant be learned, but it could be a tough and costly learning experience.

If you are looking at getting more properties do it yourself, as you need to be know your stuff. As there are tenants out there that surely do, and make it their business to know

Good luck!!!!!!