[Go Back]

First-time landlord

Are you a First time landlord? Don’t be afraid to ask a local letting agent for advice before you start. They are likely to help you because they will be aware that you might decide to market or manage the property through them. You search a good letting agent and ask for their rental lists to get an idea of local demand and prices. Most agents may offer a range of service charges 10 per cent of the rent for ‘letting only’ and 12.50 per cent for letting and rent collection or for the full management which can be 15 per cent or more.

The letting only service should include suggesting a rental value, introducing and vetting tenants, taking a deposit, checking tenants in and out of the property. They may also collect and chase arrears, prepare inventories and ensure that bills are put in the tenant’s name.

The full management service should deal with urgent tenant enquiries and with routine repair and maintenance. Agent may also make other charges on top of the commission on rent, agency may also charge landlords:

  • An administration fee at the start of the tenancy
  • A renewal fee every time a tenant renews their contract
  • A fee for carrying out an inventory
  • Some agents charge advertising costs.

Advantages of letting through an agent

  • They know the market
  • They take care of marketing
  • They have the expertise
  • You don’t have to deal with tenants
  • They will deal with repairs
  • They will deal with the money
  • Using a good agent will cost you a proportion of your rental income in return saving you a lot of trouble

Disadvantages of letting through an agent

There are many agents who are not regulated at all, working in a growing market with high demand in which people are likely to enthusiastically sign up to rent their new home without checking the small print which sometimes has outrageous clauses hidden away. It is better way to choose an agent who is a member of the National Approved Letting Scheme (NALS) or belongs to one of the professional bodies who support it: Association of Residential Letting Agents (ARLA), the Royal Institution of Chartered Surveyors ( RICS) or the National Association of Estate Agents (NAEA) and the UK Association of Letting Agents (UKALA). Helpful contacts: www.arla.co.uk, www.naea.co.uk

In addition, make sure you opt for an agent who deals with the market you want to serve as they will have the experience you need. The reason of this is so important that there is clear course of action if you have difficulties and can’t come to a conclusion yourselves. This can be an invaluable time and money saver, just when you will need support and help if things are not working out.

There are some KEY QUESTIONS to ask a letting agent

  • How many properties similar to mine do you have available for rent?
  • How many are currently NOT being let and HOW long?
  • How long does it usually take from advertising to gaining a tenant?
  • How many viewings normally need to take place and do you do this as part of your fee or not?
  • Have you anyone currently looking for my type of property?
  • Will you advertise the property in the local paper and in your window – using pictures or just text?
  • What online websites do you advertise on?
  • Are you a member of a trade body?
  • If not, why not?
  • If you are, can I see the code of conduct and what happens in case of a dispute?
  • What qualifications have you/your staff got in letting?
  • Can you provide a copy of your fees, charges and services?
  • Can you give me a copy of your contract between a landlord and your agency? You should then check this with your own lawyer.
  • What happens if the tenant leaves before the end of their agreement?
  • What happens if the tenant does not pay up?
  • What happens over repairs to the home?
  • Who/how does the tenant get checked up on over the tenancy?
  • How long does it take from the tenant paying to the money appearing in my bank account?
  • If the agency does the repairs, am I charged at cost, or with a mark-up? If the latter, by how much?

Contract Agreement with the Agent

This is where you must read and understand the small print. Terms for you to check on including:
  • The length of notice to cancel: One to three months for either side is typical, but some agents ask for more.
  • Any fees that will be charged in addition to the commission on rents - (see sub-para 2 above).
  • Exactly what the agent will deal with - for example chasing arrears and handling repairs.
  • Charging for periods when there are no tenants - the only time this is acceptable if you are on a full management contract, so they will still be responsible for maintenance, but the fee should be reduced during a void.
  • An 'estate agency fee' – if you put the house up for sale and the tenant buys it, Typically 1.5 per cent of the sale price, this is payable whether or not the letting agent acts as agent for the sale.