letting agents
Other important things to remember,
whether you are using a letting agent
or not, are tenancy agreements and
deposit schemes. Tenancy deposit
schemes were introduced last year
and require landlords to place deposits
received from tenants in a protected
scheme meaning they don't have access
to the funds (see page 34). Failure to do
so can result in a fine for three times the
amount involved.
On call
How close you live to your property may
dictate whether you need to use a letting
agent or not. If your property is not local
to where you live and work, attending
to problems that may arise could prove
difficult. And it's not just location that
could be an issue. If you are in full-time
employment, you are unlikely to have
the time to attend to tenant requests
immediately. As Harrison puts it: "If you
are just about to go into an important
meeting, the last thing you need is a
call from a tenant complaining that the
washing machine has just broken. Letting
agents can be on call to resolves such
issues and keep tenants satisfied � a
happy tenant is a good tenant."
When you are considering taking on
more properties, or drawing up your
budget before taking the plunge with
your first property investment, decide
whether you will need the services of a
letting agent and remember to factor
the attendant costs into your plans. For
finding, vetting and performing credit
checks on suitable tenants, you can
expect to pay a fee of around a month's
rent for the service. Recruiting a letting
agent on a full management contract
will set you back more, traditionally
around 10 per cent of the monthly rent,
but could be over 15 per cent. Don't be
tempted to cut corners though. Paragon's
Heron adds: "You have to be careful who
you put your money with. Letting agents
will be handling large sums of money on
your behalf, so it is important to use an
accredited agent. Don't just be tempted
by the letting agent with the cheapest
fees as they are unlikely to be approved."
You don't have to use a letting agent
and if you only have one property and
know what you are doing, chances are
it won't be a cost-efficient arrangement
for you. But in the vast majority of cases,
letting agents will make your life a lot
easier and keep your tenants smiling.
A
s a stagnant property
market forces a percentage
of those who previously
intended to sell into the
lettings market, there is perhaps more
demand than ever for the services of
letting and managing agents. But it's not
just relatively inexperienced landlords
who call upon their services. Portfolio
landlords with a number of properties
can't be in more than one place at the
same time, so may need to recruit letting
agents to help them find tenants and
maintain the contracts on a permanent
basis. So what exactly do they do?
This depends on what level of
involvement and assistance you are
after. You can use them to advertise
for tenants, arrange viewings and find
suitable inhabitants for your property.
Along with tracking down reliable
tenants, the letting agent will also
take up references, make credit checks
and help with administration such as
changing utility accounts. If you are
new to buy to let, it may prove hard to
find tenants off your own bat, whereas
letting agents will not only have a
reputation and profile in your area, but
will be able to advertise your property
through their offices, online and in the
local press.
If you want to use a letting agent's
services in the long run, then there is a
lot more they can do for you. This more
comprehensive level of service involves
carrying out an inventory and condition
report at the outset of the lease,
collecting rent as it fall due and being
responsible for any maintenance, repairs
or problems with the property. A letting
agent can act as a conduit between the
tenant and the landlord, meaning you
don't have to be constantly available
which can be a problem if you have a
number of properties.
Malcolm Harrison, spokesman for
the Association of Residential Letting
Agents, says: "Letting agents are useful
across the board, from newcomers to
buy to let through to more experienced
property investors. First-timers may
think that letting property isn't rocket
science, but there is a lot of detail to
keep on top of and agents can help you
learn the ropes. It is important to use
a regulated, qualified agent with the
proper insurance."
John Heron, managing director at buy
to let lender Paragon Mortgages, says:
"Our anecdotal evidence suggests that
around half of all landlords use letting
agents. Of those that don't, the majority
are experienced, professional landlords
who do it themselves."
going solo
Of course, you don't have to enlist the
services of a letting agent, but you may
well have to if being a landlord is not
your full-time job as you may not have
the hours in the day to resolve any
problems that arise. If you are going it
alone, you will also have to be aware
of a range of issues from ensuring
electrical appliances have been safety
tested through to complying with
legislation concerning Houses in Multiple
Occupation (see page 15), all things an
ARLA-approved letting agent will be fully
up to speed with.
23guide to buy tO let
Where to find a
letting agent
When choosing a letting agent, it is
best to opt for one who is a member of
the Association of Residential Letting
Agents (ARLA) as they are governed
by a code of practice that ensures
professional standards. All members
are also required to have professional
indemnity insurance cover and are
covered by a bonding scheme which
provides financial protection for client
monies. The Association also has
its own complaints and disciplinary
procedures so that all disputes are
dealt with efficiently and fairly, giving
you, the landlord, peace of mind.
Examinations are held regularly and
membership rules require all member
offices to have professionally qualified
staff. Members' accounts are required
to be audited annually ensuring they
conform to stringent accounting
practice.
With 3,500 member offices
throughout the UK including large
multi-branch national companies as
well as smaller single office practices,
it shouldn't be too hard to find an
ARLA member in your area and the
trade body's website has a search
tool where you can hunt for agents
by postcode. Alternatively, you may
like to use an agent who has been
recommended to you, but make sure
they have suitable accreditation.

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