For first-time landlords and seasoned property managers alike, the lettings industry can sometimes feel like a complex and mysterious beast. As it is not currently regulated, there can be wide variations in the nature of services offered and the practices employed between agents. So with that in mind, allow us to shed some light on an industry which in fact offers many simple and cost-effective ways of managing your property portfolio.
What is a lettings agent? A brief history
Whilst the recent boom in buy-to-let is a relatively new way of doing business for many investors, the practice of renting has been around for thousands of years. The earliest letting agents were a form of rent collector, who circulated all the properties owned by the wealthy landlord (often royalty or a local dignitary) and demanded that the residents pay up. This wasn’t always a fair system of course – as whilst these collectors were paid a sum by the landlord for carrying out the work they often took more money than asked and accepted bribes from residents.
Nowadays, a lettings agent does a similar thing (without the unauthorised backhanders and bribes, of course!) and in very much the same way – yet with more structure and much more paperwork. Another point of difference is that modern letting agents also offer additional services, such as maintenance packages, dispute resolution and legal assistance.
How are lettings agents different from estate agents?
The practices of buying houses and letting houses are very complex processes which differ considerably from one another, although they both relate to residency in a property. Some estate agencies do have a lettings branch which enables them to deal with both the sale and the rental of properties. Sometimes they offer a full range of services, but often they may only deal with the initial rental set up and the collection of rental money. Specialist lettings agencies (such as The Property Man) deal only with letting properties, which means they can offer a huge range of services with plenty of industry-specific experience and expertise to back them up.
What services do lettings agents offer?
Lettings agents can tailor their services depending on what you need. For example, you may be a new landlord who has just acquired a property. You need it to be occupied fast – and by tenants who have been fully checked and referenced. Once the tenants are in, you need somebody to look after them should issues arise, and collect the rent on your behalf. A full management service may be best for you in this situation. On the other hand, you might have a few properties with long-term tenants which you maintain yourself. You just need some legal documentation sorting out and the rent collecting each month. For this you would simply select the few services you needed – some on an ongoing basis, others as one-offs as required.
How do lettings agents make their money?
A lettings agent will charge you a fee for the services they carry out for you, very much like any other business. For example, if they do detailed credit checks and references of your prospective tenants, this will be charged at a certain rate. If the agent is collecting your rent on a weekly basis and is your tenants’ first port of call should an issue arise, then you will be charged a regular pre-agreed retainer rate which is normally payable every month. Investing in a letting agent is a cost-effective way to help you manage your properties – as you are paying a small fee for the ongoing support of an expert who also has other services to offer you should you ever need them. Lettings agents should always be clear and upfront about their pricing with you.
How do I know I am dealing with a reputable agent?
A reputable agent should have a sizeable portfolio of happy landlords who they are currently carrying out a range of services for. They are honest and transparent – and whilst they can offer insider advice on savvy ways to save money and keep costs down long-term, they will never offer to illegally cut corners on your behalf, or advise you to do so yourself. You should always be able to get hold of them at all times. They should be happy to offer you advice without obligation, to a reasonable extent of course. You should also be able to request testimonials (if they are not readily available online on their website or an industry review site) – as these serve as proof that their current clients are satisfied.
Want to know more about lettings with The Property Man? Take a look here: https://www.thepropertyman.co.uk/.