There’s no rule that you have to use the services of a letting agent when you decide to rent out your property. There are plenty of private landlords who decide to manage everything themselves rather than leave it to a third party. On the other hand, there are those property owners who don’t want to be involved in the day to day running of a house or flat and prefer to pay someone else to do it.
As a landlord doing all the donkey work, you will be on call 7 days a week and may find yourself fixing a blocked sink or organising an emergency repair on a Sunday morning when you should be in bed reading the newspaper. Renting out a house without using a letting agent may have its upside but it has some pretty important cons too. For instance, keeping up with the legislation can be a problem – Liverpool Council have recently introduced a licensing system for landlords which other regions may well be set to follow.
The good news is that most letting agents offer several layers of service which means you don’t have to go all in if you want to handle some of the administration of the property yourself. You can opt for let only where they help you with getting the right tenants in the first place, as well as handling payments and the legal requirements such as contracts.
If you do want the full service you can get them to manage the property for you which will include repair call outs and monitoring the tenants whilst they are in the flat or house, all for an extra cost of course.
The Benefits of Not Using a Letting Agent
One of the primary benefits of going it alone is that you get to choose your tenants personally, which is great if you have someone in mind. Letting agents who handle tenant selection may be in too much of a hurry to install someone in your property, particularly if they want to bill you for the service. Having said that, if you’ve chosen the right letting agent and built a good relationship with them, this shouldn’t be a problem.
Of course, not using a letting agent will save you money because you don’t have to pay them any fees and if you then get the right tenants in place this is a big bonus. Unfortunately, if you make a mistake in choosing those tenants it could cost you more in the long run through legal bills and damage to the property.
If you are deciding to manage everything yourself, then you have to keep tabs on the property as well as the tenants. Letting agents that handle this side of things through a managed service can keep assuring you they are on top of things but you can never be completely sure. Agents generally deal with a large number of clients and properties which means their monitoring could well be spread a little too thinly for your liking. Again, this comes down to the letting agent you choose – pick the right one and you shouldn’t have much to worry about.
Finally, the other side of letting out the property yourself is that you can build a stronger, personal relationship with the tenants. That means you can foresee problems more easily and keep control of the lease, managing everything more effectively.
Guide to Self-Letting
If you are heading out alone and you are a beginner landlord then you are probably going to be on a sharp learning curve for the first few months.
- A good place to start is with the current legislation that applies to landlords and what you need to have in place before you get a tenant in. The legal aspects are always under review and you will need to keep on top of these if you don’t want to fall foul of the authorities. For instance, landlords are now required by law to install smoke and carbon monoxide alarms in all properties.
- Before you rent out your property you need to make sure that it is in the right condition – the more you update the less likely you are going to have to call someone out to fix a problem. Whilst this may well cost a little more initially it could well save you money in the long run.
- You will also have to put together a contract for the tenant and for this you are realistically going to need to employ a solicitor. Letting agents handle this as a matter of course but for a DIY landlord it can be one of the more challenging pieces of the letting puzzle to get into place.
- Finding renters is less of a problem than it used to be with plenty of online platforms where you can advertise your property to potential tenants. It’s also a good place to check what other people are doing and how much you should charge for your flat or house.
- Checking the background of your future tenants is also more of an issue for landlords who are going it alone. Letting agents normally have the right processes and technology in place to do something like a credit check. The good news is that there are plenty of companies available online that can provide tenant checks for a small fee.
The Benefits of Using a Letting Agent
Whilst it may cost a little more, using a letting agent does have certain advantages over being a DIY landlord. First of all, they are going to save you quite a lot of time because they handle the selection and vetting of potential tenants as well as advertising on sites such as Zoopla and RightMove. This is a great advantage particularly if you are working and have little spare time to devote to your landlord duties. Although you are going to have to fork out as much as 10 to 15% of your rent collection to the agent, these are tax deductible, as is the money spent on repairs and management of the property.