How do I choose a letting agent to manage my rental property?

I’m moving out of my home to move in with my partner. Instead of selling my flat, I have decided to let it out just in case things don’t work out.

I don’t want the hassle of finding tenants or managing the property myself, so I’ve decided to use a letting agent. 

I would love some advice on how I should set about choosing the best one. 

For example, should I invite a few of them over to meet them? What questions should I ask when they do visit and what sort of fee should I expect to pay?  

Hand over responsibility: Using a managing agent enables landlords to take a step back and allow someone else to manage everything on their behalf

Ed Magnus of This is Money replies: Being a landlord is often lucrative – but it can also be a time-consuming and demanding role, riddled with ever-increasing responsibilities and tedious compliance.

On top of finding suitable tenants, you have to consider other factors such as regulations and safety checks, maintenance costs, void periods and rent collection to name just a few.

Using a managing agent enables landlords to take a step back and allow someone else to manage everything on their behalf.

They will handle everything during the letting process and the tenancy, including rent collection and organising repairs.

But it can come at a considerable price, on top of what landlords already pay in tax and maintenance costs.

Traditional high-street letting agents will typically charge anywhere between 10 and 20 per cent of the monthly rental income, depending on the company, the location and the service level on offer.

In some cases they may even charge more than 20 per cent, particularly when managing short lets as this involves more work.

I asked some property experts to help explain how you should go about choosing a letting agent.

I spoke to Harriet Scanlan, lettings manager at Richmond estate agency Antony Roberts, Angharad Trueman, group lettings director at Andrews Estate Agents, and Katinka Hill, regional lettings director at Chestertons.

How do you choose a managing agent?

Harriet Scanlan replies: When looking for a letting agent to manage your rental property, a good starting point is to opt for someone local. 

If a tenant enquiry comes in, they should be well positioned to carry out a viewing swiftly, reducing potential void periods as much as possible.

If you are seeking a fully-managed service, it’s also worth finding out where the management department is based – is it local? This is important in terms of getting issues resolved quickly and keeping tenants happy.

Angharad Trueman replies: Research is key when deciding which letting agent should manage your property, so be sure to check out their website and reviews.

A good candidate will have demonstrable knowledge of the local market and positive reviews from landlords.

Agents need to know their legal requirements and the laws affecting landlords, so industry qualifications are critical.

Many agents operate on a 'get it on, get the price down' approach, so picking the agent offering the highest rent won't necessarily mean that is what you end up with

Many agents operate on a ‘get it on, get the price down’ approach, so picking the agent offering the highest rent won’t necessarily mean that is what you end up with

Look for accreditations like membership of ARLA Propertymark, which means they are already qualified.

Finally, carefully consider how a prospective agent communicates with you. Their manner and how they make you feel before, during and after the valuation is a good indicator of how they will present to future tenants.

Katinka Hill adds: When compiling your shortlist, consider how long the agents working in the office have been specialising in lettings in your area.

The longer they have been present, the stronger their knowledge, their network of potential tenants and the necessary experience to manage your property well.

Don’t just pick the agent who promises the highest rent

Harriet Scanlan says: Many agents operate on the ‘get it on, get the price down’ approach, so picking the agent offering the highest rent won’t necessarily mean that is what you end up with.

 Unlike sales, the relationship between a letting agent and a landlord could go on for years – so trust is essential

You also need to consider the bigger picture. If they are starting your relationship with them by acting dishonestly, this doesn’t bode well for further down the line.

As a landlord, you are essentially entrusting your agent with what is likely to be one of your greatest assets, so it’s not a decision to be made lightly.

Unlike sales, the relationship between a letting agent and a landlord could go on for years, so a relationship based on trust is essential.

What about the agent with the cheapest fee?

Angharad Trueman replies: It’s tempting to gravitate towards the agent with the cheapest fees, but this can be a false economy.

Would you rather have an agent with 100 properties that charged £10 a month, or 50 properties that charged £75 a month?

A good fee means the agent has funds to invest in training, technology and staff to help you later down the line.

What should you ask a letting agent when they visit?

Harriet Scanlan replies: When you meet a letting agent for the first time, you should discuss safety regulations so you know what is entailed in getting your property ready to let out.

There are various safety rules and regulations which need to be adhered to, and it’s a crucial part of the agent’s job to explain these to you.

Check agents know their compliance: For example, all rental properties now need an electrical installation condition report

Check agents know their compliance: For example, all rental properties now need an electrical installation condition report 

Angharad Trueman replies: Any agent worth their salt should be able to answer most of your questions off the top of their head, so don’t be afraid to put them on the spot.

It’s important you also understand what happens after your tenant has moved in, not just the process leading up to finding them.

Some standard questions would be: 

  • What is your process for pre-qualifying tenants? 
  • After you have moved my tenant in, how will the ongoing management of my property be dealt with? 
  • Who will be my property manager?
  • How quickly will my rent be paid and when should I set up my direct debit for my mortgage payments? 
  • What is your process for chasing arrears? 
  • When should I expect you to be in touch with me? 
  • How will you communicate with me and how often will you be in touch? 
  • How often will property inspections happen, and who will do them? 
  • What if there is a maintenance emergency and you can’t get hold of me? 

Katinka Hill replies: Once you meet with your potential agent, clarify exactly what kind of tenant you are looking for and use this opportunity to test your agent on their knowledge about your area’s property market.

Ask them how the market is performing, what rents are usually generated for properties similar to yours, and which tenant demographics they attract.

It’s also crucial to discuss your responsibilities as a landlord and the latest regulations including the Renters’ Reform Bill.

Last but not least, don’t shy away from asking for a detailed breakdown of the agency’s fee structure. The level of fees and payment of fees varies outside of London compared to in London, as an example.

Other fees that landlords should be aware of are tenancy agreement fees, deposit registration fees, safety checks, inventory and check-in fees as well as reference fees.

Should you haggle the agent over their fee?

Angharad Trueman replies: Typically, management fees range between 10 and 15 per cent of the monthly rental income.

You can haggle, but as all aspects of an agent’s management are generally necessary, you wouldn’t want them to cut corners to meet your required fee.

When it comes to looking after what may be your biggest investment, remember the old saying, ‘pay cheap, pay twice’.

The agent's terms and conditions should clearly set out all of their costs, but there are third-party costs to bear in mind such as pre-tenancy cleaning, safety certification and inventories

The agent’s terms and conditions should clearly set out all of their costs, but there are third-party costs to bear in mind such as pre-tenancy cleaning, safety certification and inventories

Are there any additional costs to watch out for?

Harriet Scanlan replies: When landlords are exploring the potential of letting their property out, it is beneficial to have a good grasp of costs.

The agent’s terms and conditions should clearly set out all of their costs but there are third-party costs to bear in mind such as pre-tenancy cleaning, safety certification and inventories.

Many agencies add a referral fee to their contractors; in turn contractors build that into their invoices, thus passing the cost onto the landlord.

Not all letting agents act like that, so look around for one who doesn’t.

Angharad Trueman adds: Ensure you ask about extras on top of the management fee so you are not surprised later down the line.

There is often an extra charge for inventories and check-out reports as these are often conducted by external impartial companies.

Property inspections take a lot of extra manpower to organise and complete so these often incur an additional fee too.

Traditional high-street letting agents will typically charge anywhere between 10% and 20% of the monthly rental income

Traditional high-street letting agents will typically charge anywhere between 10% and 20% of the monthly rental income

What makes a good letting agent?

Harriet Scanlan replies: A good letting agent should invest in their marketing, especially when it comes to professional photos and property portals. The online presence these days is vital so getting it right is important.

Angharad Trueman replies: A good agent is one that acts with integrity, honesty and is a great communicator.

Many things can go wrong with property and it’s important to be with an agent who informs you promptly and won’t sugarcoat things.

If problems do arise, you should feel confident working on a plan to solve them together.

The legislative landscape for lettings shifts quite often so you’re looking for an agent who keeps their knowledge up to date and can always provide you with the most current detailed advice.

Cut costs: The cheaper 'let only' service is where the agent finds the tenants, moves them in and then hands everything back to the landlord

Cut costs: The cheaper ‘let only’ service is where the agent finds the tenants, moves them in and then hands everything back to the landlord

What does the full management service include?

Ed Magnus replies: In addition to finding the tenants, the letting agent will deal with day to day management including repairs.

They should also give utility suppliers meter readings when the tenancy starts and ends, organise safety checks such as the gas safety certificate, electrical safety tests, smoke and carbon monoxide alarms.

Full management should also include the agent visiting the property at least once a year, providing an emergency out of hours service, and managing the end of tenancy process and deposit return.

What if you don’t want to pay for full management?

Ed Magnus replies: Broadly, there are three service levels available. As the name suggests, the cheaper ‘let only’ service is where the agent finds the tenants, moves them in and then hands everything back to the landlord.

This can either be charged as a flat one-off fee or taken as a percentage of the rent.

The next cheapest option is for the rent collection service. 

Again this leaves the management in the landlords hands, but the agent will be responsible for rent collection and chasing up any rent arrears.

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