So you’ve had an offer accepted on your new buy to let property, conveyancing work is well underway and your due to pick up the keys in a few short weeks.
You’re well on your way to becoming a landlord but have you decided on the crucial question of whether you’ll manage your new property yourself, or will you employ the services of a local letting agent?
There are many elements to property management and we take a closer look at them here to help you decide the best route for you.
Generally speaking a letting agent should charge fees of around 10% of the rent each month to provide full management of your property. A Set-Up & Marketing fee will usually apply too which averages between £100 - £400.
Some agents charge low fees of anything between 7% - 9% but it’s very challenging for an agency to provide a comprehensive service at that level and you may experience a lower service level, or find that you’re being charged mark-ups elsewhere.
Of course if you manage the property yourself you’ll pay no fees but it’s important to be aware of the time cost to yourself to provide an appropriate level of management.
As part of their service your agent will promote your property on recognised property portals such as Rightmove, Zoopla, OnTheMarket and S1 Homes (Scotland) as well as within their shop window if they have a high street presence. This ensures that your property receives maximum exposure and gives you the best possible chance of finding suitable tenants.
Promoting your property yourself online on social media or sites such as Gumtree for example vastly reduces the amount of potential tenants who will see your advert. This may result in you taking on a tenant who perhaps isn’t ideally suited for the property or taking a reduction in your advertised monthly rent if you haven’t secured a suitable tenant for a number of weeks.
Pre-Let Safety Requirements
Your agent will keep you updated on all current legislation in terms of safety requirements at your property. There are a number of items to be attended to such as the installation of smoke/heat detectors, carbon monoxide alarm(s), gas/electrical safety assessments, energy performance certificate and legionella risk assessment.
A good agent should have partnerships with suitable contractors in all of these areas and can co-ordinate this work for you ahead of your first tenancy.
Ongoing Property Maintenance
At any given time there can be maintenance requirements at your property and it’s important to be able to attend to these in a responsive manner to ensure your tenants continued enjoyment of the property.
Some items such as loose door handles, touch up painting and broken appliances for example will be relatively low urgency, whereas boiler repairs, broken showers and electrical issues will require prompt action.
Again a good agent will organise any such repairs in a responsive manner with their team of tradespeople and should also provide an out of hours service to prevent you taking such calls from tenants in the middle of the night or at the weekend.
Collection of Deposit & Monthly Rent
In most cases a deposit which matches the monthly rent will be required before your new tenant moves into your property. This in turn should then be registered with a suitable tenancy deposit scheme, which again your agent will do for you.
In addition they will take receipt of monthly rental payments from the tenants on a specified date each month before then transferring this to you, minus deductions for their fee and any maintenance costs that have occurred throughout the month.
Additional Benefits of Professional Property Management
Outwith the key elements above there are also a number of other notable benefits of using a letting agent and it’s important to mention them here.
Local Knowledge: An experienced local agent should have intimate knowledge of the marketplace in which they operate and can guide you in terms of what monthly fee you should expect at your property. They can also advise on any necessary improvements at your property to ensure you achieve the desired rent.
Professionally Trained Staff: There are certain training requirements of a professional letting agent and this in turn will benefit you as the staff dealing with your property assist you with crucial decisions throughout your tenancies. This can be particularly important in the case of any tenant disputes.
Financial Reporting: A good agent will be able to provide a monthly/annual report on all income and outgoings at your property which will assist when it comes to filing your annual tax returns.
In our opinion the benefits of working with a trusted local letting agency fully justify the relatively small monthly fee. As a professional investor you should be looking for a passive income from your property investment and utilising the services of an agent allows for a completely hands off approach.
It’s vital of course to select an agent that’s well matched to your needs so take the time to do some research on the top performers in your area. Online reviews are a good place to start and any word of mouth recommendations can certainly be beneficial.
We work closely with a variety of professional partners here in Glasgow, including solicitors, tax experts, mortgage brokers and of course letting agents and if an introduction would be useful just click the link below and we’ll be delighted to provide one.