- Complexity
- Advantages
- Mandate
Buy-to-let property purchases have always been seen as a good investment and with the sluggish property market today, it is no wonder that buy-to-let investors are buying into this trend.
About 10% of home sales consist of properties that will be used for rental units, which means that the responsibilities of landlords are increasing.
On top of that, they might still have additional properties that need to be managed as well. It is estimated that there are over 75,000 rental homes in the formal property sector and most of these are in private hands.
Complexity
Managing these properties can become very complex, especially if there is more than one home involved. The truth is that there are not many private investors who have the knowledge or the time to manage these properties themselves.
As mentioned, most of these properties are in private hands, which means that a huge percentage of the owners still have full-time jobs they need to tend to, their own household they need to manage, and maybe even a family that they need to support.
It is easy to let a few things slip from the radar in a situation like this, but unfortunately, the consequences aren’t always easy to recover from.
This is why many people opt for professional letting agents and the services that they offer. They are able to offer the landlord with advice and insight, and they are knowledgeable about all the necessary legal requirements.
Depending on the situation, such a managing agent is usually paid about 10% of the monthly rental.
Most landlords don’t see this as a high price to pay for the service that they are getting. There is no price that you can put on the peace of mind you have when managing a property in someone’s absence.
Advantages
There are two major advantages when it comes to working with a professional letting agent:
Firstly, you will be able to dive into a pool of better tenant selection and secondly, you will have better and more consistent rent collection. Professional letting agents make use of different systems that allow then to pre-qualify tenants thus lowering the risk of approving risky tenants.
In addition to hiring a rental agent, you also put a buffer between you and the tenant: you, as the landlord, don’t have to deal with excuses, chase down rent, or have a sour relationship with them. Your agent will have the upper hand here because most tenants have respect for the type of job that they do.
The important question here is: how do you select the right agent?
A personal recommendation always helps but you have to decide for yourself. It would be a good idea to ask for the portfolios of rental agents already managing rental units.
Once you have selected your agent, you need to ensure that they are registered with the Estate Agency Affairs Board. It will also help if the agent is part of an already established agency group. It shows that they have many resources at their disposal and it boosts their credibility
Mandate
It is likely that you will have to sign an agreement with your agent that covers their rights to manage the property. Make sure you read it carefully before signing.
Also, ensure that you have a look at the lease agreement that they will be providing. Discuss any changes you would like to make beforehand. Clear communication is always important in these relationships.
Once you have reached an agreement, you can sit back, relax, and let your agent do the work for you.
