Whether you are an experienced landlord or just starting out on your property investment journey, one key decision to be made along the way is which letting agent to use when marketing and managing your property.
With so many letting agents to choose from, it can pay to compile a checklist of questions to ask so you can make an informed decision on the best option for you.
There are a whole host of questions landlords should ask letting agents, and we’ve listed 10 of the most important here…
The questions you need to ask a letting agent
1. What accreditations do you have?
When considering a letting agent to look after your property, make sure you find out which trade bodies they are members of.
All letting agents in the UK are required to join one of two property redress schemes:
• The Property Ombudsman
• The Property Redress Scheme
Letting agents in England who hold their landlords’ money are also legally required to join a client money protection scheme, so ask your agent which one they are members of.
The six approved schemes are:
• Client Money Protect
• Money Shield
• UKALA Client Money Protection
You should also ask if your letting agent is registered with the Association of Letting Agents (ARLA), the Royal Institution of Chartered Surveyors (RICS) or the National Association of Estate Agents (NAEA).
2. Can you prove you have a track record of success?
Peace of mind is everything when running a successful property portfolio and when handing over key areas of the operation, experience is key.
When looking for a marketing or managing agent, you should put longevity right at the top of your list of must-haves.
The agency itself should demonstrate a track record of lettings and property management success in the local area, while you should also seek clarification that you will still be dealing with a dedicated person throughout your management contract.
Who is this person, can they demonstrate a sound knowledge of the local market and how many years have they been with the agency?
3. How many rentals does each property manager look after?
Huge numbers of managed properties on the books of a letting agent can look very impressive on paper.
But if they manage hundreds of properties and don’t have enough staff to look after them, the chances are the service you expect won’t be forthcoming.
Find out from your agent how many properties each manager looks after and how long their landlords have been using their management services.
You should be looking for a letting agent with a superb reputation for holding on to managed properties, but also one that has a high level of strong customer service.
4. How much will my property earn in monthly rent?
It sounds obvious and it is, but you'll clearly want to know an agent's valuation of your property's rental potential.
When they give you a figure, ask them what it is based on.
The agent should be able to provide details of other properties in the area, both on their books and others, and what these are earning in monthly rent.
If they can't provide that insight, perhaps their local knowledge and attention to detail is questionable.
5. What marketing techniques do you use to attract tenants?
Just like you would want an agent selling your home to attract solid buyers, you want a letting agent to bring in good, reliable tenants.
How will they market your property and how do they conduct viewings?
The last thing you want is someone poking around inside your investment without the guidance of a knowledgeable agent.
How many prospective tenants are on their marketing database and how will they contact those potential renters?
Most importantly, though, find out if their office is open at weekends.
For potential tenants who work during the week, often the weekend is the only time they’re able to view properties.
And, of course, you'll want to know on which platforms your property will be marketed.
A good agent should be using at least one of the major online property portals, but you should also expect a professional 'To Let' board outside the property and advertising within the agency or group of agencies.
And with social media a huge platform, ask your agent which channels they’ll use to give your property even more online exposure.
6. How do you screen and reference potential tenants?
Of course, this is easier said than done but you should be safe in the knowledge that your agent has done all they can to ensure your tenant is right for you and your property.
Ask them what kind of systems they have in place to 'screen' potential tenants.
Do they subscribe to a tenancy database and undertake analysis of a person's credit history, employment status and past rental history?
Do they use an external referencing agency and who do they use?
7. How do you deal with tenants in rent arrears?
The last thing any landlord needs is a tenant in arrears but appointing a solid managing agent can help to take the strain away.
When considering an agent to run your rental property, find out what action they take if a tenant falls into arrears.
How many of their current tenants are in arrears and what are they doing about it? What is the company policy on tenants who pay late, or don't pay at all?
In terms of your own money, how often will a tenant's rent be paid into your account and how is it collected from the tenant?
And does the agent offer rent and legal protection insurance?
8. Which contractors do you use when dealing with maintenance issues?
When something goes wrong, that's when you expect your managing agent to step up and take control.
Find out if they have a list of reliable contractors to deal with emergency situations like heating or plumbing failures.
How do they ensure the tenant is not overly inconvenienced by any work?
Do they organise quotes for repairs and project manage work from start to finish?
9. How much are your management fees?
Make sure you are fully abreast of everything that will come out of your pocket when it comes to managing agents' fees.
What is the cost of the management, including all fees, and is VAT added on?
Most agents will offer a range of management services at a variety of costs so fees can vary.
Make sure you know what you are getting for your money.
Read the contract fully before you sign and make sure you understand the cancellation period.
Does the agent charge a fee when the property is empty and what is that fee?
Ensure you are up to speed with fees for inventories, tenancy agreements, and Energy Performance Certificates - are the charges for these reasonable and fair?
10. How do you protect my tenant’s deposit?
By failing to protect your tenant’s deposit in one of three government-approved schemes, your tenant can take you to court and apply for compensation.
The approved schemes are:
• Deposit Protection Service
• Tenancy Deposit Scheme
You’ll also be unable to issue a section-21 notice to regain possession of your property.
Ask your letting agent which scheme they’ll be protecting your tenant’s deposit in and ask them to confirm they’ll issue the tenant with all required prescribed information, which includes:
• How much they’ve paid as a deposit
• Which scheme it’s protected in
• How they can apply to get their deposit back
• What to do if there’s a dispute over the deposit
How do I find a good letting agent?
If you’re a landlord looking for a letting agent to manage your rental property, the best place to start is locally.
A good letting agent should know their market area and have a great reputation with local people.
Look for reviews online and ask other landlords for recommendations.
What do letting agents charge landlords?
How much a letting agent charges a landlord will largely depend on the service they’re providing.
Most agents either offer a tenant find service or a tiered management service.
For a tenant-find only contract, landlords are usually charged a fixed fee, while full management services usually see the letting agent take a percentage of the property’s monthly rent as payment.