Letting agents can help new and experienced landlords with every aspect of the letting process. Some landlords will choose a letting agent to simply market a property and then take over the management of their rental property once a tenant is in place. Other landlords prefer the entire process, including rent collection and emergency repairs, renewals, gas and electrical safety checks to be managed by a professional letting agent.
Agents usually charge letting fees on a monthly basis. Letting fees are usually payable in advance of the term of agreement. The size of the fee depends on the level of service required, and is usually a percentage of the rent.
The most basic service is the finding of a suitable tenant; this usually includes advertising, vetting the tenant and showing them around the property. A good letting agent will have prospective tenants already registered on their database. A letting agent will arrange credit checks to be carried out on any prospective tenant and also references from the current employer and previous landlord. This process is often carried by out by an independent specialist credit referencing company.
Full property management service
Appointing a managing agent to help manage your investment has many benefits. A full property management service will leave the letting agent to deal with all matters that arise, including any emergencies as well as manage the general upkeep of the property. This is an appealing choice for many landlords as the letting agent will deal with all the time consuming and often stressful day to day management of the property. This includes emergency repairs and scheduling property visits, liaising with utility suppliers and the local authority as well as arranging professional cleaning and deposit settlement, giving peace of mind that the property and tenants are in good hands.
This degree of service will typically cost around 7.2% of the rental income excluding letting service fees, which is paid in line with the way the rent is paid, e.g. monthly, quarterly, six-monthly, etc. Should ‘worst case’ scenarios arise such as infestations, leaks, gas, or electrical issues the managing agent will be available to deal with emergency work quickly.
Additional property management services
Your managing agent may offer other property management services charged at an additional cost to the previously mentioned full management service. These services can be more flexible and be tailored to suit your requirements:
- Pre-Let Service - for works to be carried out to the property before the tenancy starts, including decorating, safety checks and professional cleaning
- Caretaking Service - including scheduled visits to check that there are no obvious signs of disrepair or visual defects. Your insurer will often insist on such a service if the property is vacant for a period.
In order to attract the best possible tenants, it may be necessary to refurbish your property or carry out maintenance work – your managing agent will have access to qualified and vetted tradesmen and contractors.
You will need to pay income tax on the rental income you receive, and the expense of employing a letting or managing agent is tax deductible. Visit Gov.uk for more information.