This year is expected to present the greatest challenge to the letting agent business model in years, when the tenant fees ban is introduced. Therefore, landlords and investors may be considering letting their properties without an agent.
It has been claimed that some letting agents will increase costs for landlords when they are prevented from charging fees to tenants. As a result, some investors may decide that using an agent is too expensive, and choose to go it alone.
Although landlords can gain an essential service from letting agents, there are still some top tips that should be followed if you do decide to let your property without the help of a third party, says Just Landlords, a specialist Landlords Insurance supplier.
If you’re unsure of whether to continue using your letting agent, or don’t use one at all, then make sure that you follow the top tips below:
Invest near your home
Using a traditional letting agent can be helpful when investing in a property in an area that you don’t know very well, as they usually have an in-depth knowledge of the local housing market. This will help you charge the right rent price (therefore supporting your yields) and target your property to relevant tenants.
If you don’t know the market very well and aren’t using an agent to help, then it’s wise to invest near your own home, as you will likely already know the local area quite well. Sometimes, investors will chase high rental yields and look across the country, but those managing their properties alone should stick close to home.
This will also be useful when it comes to checking tenants in and out, and general maintenance of the property.
Conduct thorough referencing
Choosing the right type of property to invest in is just one piece of the puzzle; if you don’t have the right tenants living in your rental, then you could be left with no rental income, damage to the property and, subsequently, void periods.
Letting agents typically find tenants for your property, reference them and sign all of the appropriate documents. If you don’t use one, then you will have to complete these tasks yourself. It’s vital that you don’t scrimp on this kind of thing, as you could be left in a mess if you accept anyone.
Always conduct thorough referencing checks on all prospective tenants, before signing any contracts.
You may also not realise how much paperwork is involved in letting property. With so many regulations and checks to complete (from Right to Rent to gas safety), it can be confusing to remember what was done and when. Keeping all documentation safely filed away and organised per tenancy will be a massive help to staying on track.
You should also have written copies of all communications with your tenants, in case you need evidence in the future. The last thing you want to happen is to have a dispute and have no confirmation of agreements that were made.
Also, to prove that you’re a responsible landlord, you must have copies of all certificates and documentation relating to the property, in case they are required.
Put procedures in place
Letting agents will generally have plans in place for dealing with any issues with a property, such as rent arrears or maintenance. If you’re managing the letting yourself, then it’s a good idea to have your own procedures in place.
These plans will ensure that you deal with problems in the correct manner, especially when interacting with your tenants. For example, making the wrong move when a tenant falls into rent arrears could result in issues with getting the money back in the future.
If you know exactly how to deal with a situation if it does arise, then you can be as prepared as possible.
Keep up with the law
If you decide to stop using a letting agent due to the cost, then you must pay particular attention to this point. Failing to comply with your legal responsibilities as a landlord could cost you dearly, with hefty fines and even prison sentences on the cards for rogues.
Not only should you stick to the law for your own sake, but the rules and regulations in place are designed to protect the health and safety of your tenants, so it’s essential that you don’t ignore them. They may also serve to keep your property in a good condition.
Regularly research the latest legal changes, so that you understand how to comply with your duties.
Complete regular inspections
Landlords may not realise that letting agents (should) complete regular periodic inspections of their properties. Although you may have seen reports from your agent, you may not have considered what actually goes into visiting the property.
It is advised that you visit your property, with your tenant’s consent, once a quarter. This can reduce to bi-annually if you’re happy with your tenants. You should complete a thorough inspection of the interior and exterior of the property, as well as discussing any issues that your tenant is having.
Afterwards, create a report and send a copy to your tenants for their records. This will help you ensure that your property is being kept in a good condition, which can be invaluable over long tenancies.
Create a good relationship
Without a middleman, you will be relying on yourself to create a good relationship with your tenants, in order to make sure that the tenancy runs smoothly. Therefore, always try to be available and approachable, so that your tenants feel comfortable coming to you when needed.
Having an amicable relationship with your tenant should help both parties stay on the same page, and encourage them to look after your property and pay the rent on time.
If you don’t use an agent, then you will have to undertake all communications yourself – make sure that your tenant feels that they can approach and trust you.
Although using an agent can be incredibly helpful, it is possible to create a successful lettings business by yourself. Use these top tips to get a head start and good luck!