18 Dec How to choose a good agent to manage your property investment
If you no longer work for a living and you have plenty of free time, you may wish to manage a property yourself but in a survey by Homelet of 2000 landlords, 87% preferred to use a managing agent to manage their property but how do you choose which one to use?
The decision comes down to service and cost.
Service covers many different factors. In our experience of managing properties, what we find time and again with people who manage their own properties, particularly inexperienced landlords, is that they have difficulty with their tenants because they haven’t chosen wisely in the first place or they have been generous with delayed rent over time, the tenants have taken advantage of the situation and ended up too far behind on their rent for it to be possible for them to catch up.
In our experience, finding a tenant for property in the UK is relatively straightforward as long as the property is priced correctly. We let and manage property all over the UK including London, Newcastle, Manchester, Liverpool, Nottingham and Salisbury and rarely find it difficult to find tenants if the property is well maintained. Finding tenants requires very little skill and experience but what does require skill and experience is choosing the best tenant when you have multiple candidates to choose from. Any good agent will check a tenant’s employment and income status and then obtain extensive reference checks but experience is essential in knowing which tenant is the best one to put forward. Many corporate letting agents have a high turnover of very young staff in their lettings departments because the job is often quite poorly paid and can be long hours. Many of these staff don’t have the necessary experience to work out which tenants will look after the property and be reliable payers long term.
What should an agent do to stop a tenant ending up behind on their rent?
- a) Choose the tenant wisely
- b) Chase, chase, chase, chase, If a tenant has passed income and referencing checks and doesn’t pay their rent, it could be that they are managing their money poorly. Every day that goes by without your agent chasing them for it, the more difficult it is likely to become that they will be able to pay it.
Our standard policy is to follow up with legal documentation if tenants don’t pay on time and we have never ended up with a tenant more than 3 weeks behind on their rent. Cloud Homes have never had to evict a tenant we have found for a landlord for non-payment of rent. We have only ever evicted a small number of tenants in the multiple occupation properties we manage because they weren’t fitting in well with the other tenants in the house. We have helped landlords with the eviction of tenants they have found themselves or where other agents have found for them and the landlord wants to change managing agent to us.
It is essential that your letting agent has the experience to know who the best tenants are for you.
On top of the above your agent needs to be organised ensuring you are on top of your regulations such as gas safety certificates and that they lodge your deposits with the necessary organisation.
Cost is not a difficult one to calculate, you can ask a managing agent for the details of their landlord fees and they should be listed in any contract you sign with them. Their tenant fees should be published on their website as it is a Property Ombudsman requirement for them to do so.
Do you know what your managing agent charges?
Most people know what the monthly management fee is, but do you know what the other fees are. In research we carried out recently these can be as much as £1500 a year in additional expenses. Many managing agents charge for everything on top, property visits, rent reviews, contract extensions. It leaves you wondering what they charge their management fee for because they’re charging for everything else separately.
Why switch agents?
It is rare for a landlord to switch managing agents. Often there is a ‘better the devil you know’ approach. If their property on the whole has been full and the managing agent deals with any issues then why change?
I urge anyone who has a property they rent or is looking to buy one to look at the charges and decide whether they think they can save a significant amount by switching elsewhere.
Look at the tenant fees charged because the government will soon be banning agents charging tenants fees. Many agents may pass this on to landlords so it is important to choose an agent with low tenant fees too. Also tenants are likely to prefer agents who charge lower fees increasing the rentability of your property.
If you have had a string of bad tenants or tenants in arrears consider switching to someone who knows what a good tenants profile is.
Cloud Homes cover 90% of England and Wales.
We charge 8% flat fee to landlords with no additional fees.
On a property with two adult tenants we charge £306 over a 12 month tenancy with no renewal fees for tenants.
Some of our property management department have worked in property for longer than many letting agency staff have been alive!