Key questions to ask a letting agent are:
- What lettings training have you and your staff had?
- How do you credit and reference check tenants?
- How do you keep up with all the lettings legal changes?
- What help would they give if a tenant stops paying the rent?
It’ s also worth checking the letting agreement they use and their terms of business before you agree to give them your property or properties. If these aren’ t written in plain English, then it’ s unlikely that the tenant will understand them either, so think twice before using them.
If the terms of business are more than 10 pages long and don’ t include all of the charges on one page, then you are probably going to be charged lots of fees throughout the tenancy that you didn’ t realise you had to pay for.
Poor agents typically advertise and charge a small management fee percentage, such as 5%. This might seem a great deal, but often isn’ t as it’ s virtually impossible to run a good service for landlords based on this level of income.
For example, if you are renting a property out for £600 per month x 5% monthly management, that’ s £30 per month. Take it that someone on £30,000 per year earns around £15 per hour, that’ s about two hours worth of work on a property every month, but a letting agent would also need to pay for staff, office and business running costs.
The answer to this is that they typically charge a high set up fee which may include very little, so you end up ‘ overpaying’ for disbursements such as inventories, EPCs, tenancy deposit costs or paying for tenancy agreements and renewal fees. And it’ s likely that they will be the type of agent that just passes on tenant problems to you to sort as opposed to proactively sorting them out for you – which is what they should be doing!
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