Why Let a Property through a Management Agent
Using a good agent can cost landlord insurance policyholders a proportion of their rental income in return for saving a lot of trouble. A bad one will take the money but not provide the service. Most agents offer a range of services from ‘letting only’ (which costs about 10 per cent of the rent) and letting and rent collection (about 1 2.5 per cent) to ‘full management’- which can be 15 per cent or more.
The letting-only service should include suggesting a rental value, introducing and vetting tenants, taking a deposit, checking tenants in and out of the property. They may also collect rent and chase arrears, prepare inventories and ensure that bills are put in the tenant’s name.
The full management service should deal with urgent tenant enquiries and with routine repairs and maintenance. Agents may also make other charges such as;
- An administration fee at the start of the tenancy.
- A renewal fee every time a tenant renews their contract.
- A fee for carrying out an inventory.
- Some agents charge advertising costs.
Advantages of letting through a management agent for landlord insurance policy holders
They know the market: A good agent can advise a buy to let property insurance policyholder on preparing their property for the right market so that they have the best chance of letting it. A good agent will also be able to advise on what rent the landlord insurance policyholder can charge.
Legal responsibilities. Landlord insurance policyholders that have a good letting agent, should know the legal rules and regulations, keeping you and your property up to date and fully within the law. They can also keep the costs down if they negotiate favourable rates for landlords insurance and tenant problems.
They take care of marketing: Finding reliable tenants is the trickiest aspect of the rental market and a good agent will save landlord insurance policyholders the trouble of doing it. Their expertise should also help buy to let property insurance policyholders to minimise the dreaded void periods when they have no tenant and therefore no income. Tenants looking for larger properties, and corporate clients, tend to expect to deal with professional agents.
They have the expertise: If you are starting out as a landlord, you can learn a lot through employing a good agent so that if you choose to go it alone or save outgoings by taking on some of the responsibilities, you will have a better grasp of what to do.
You don’t have to deal with tenants: An agent can be a very useful buffer between landlord insurance policyholders and their tenants. This is particularly helpful if a let property insurance policyholder gets one who is difficult to deal with, or if the landlord insurance customer does not relish handling dealing directly with tenants.
They will deal with repairs: Landlord insurance policyholders may be stuck for a plumber or a roofing contractor. A good agent won’t be.
They will deal with the money: Having an agent handle money is simpler and takes away the responsibility of dealing with the deposit.
Disadvantages of letting through an agent for buy to let landlord insurance customers
Money: Fees vary, but they will charge a percentage of the landlord insurance policyholders rent plus other fees for renewing contracts or finding new tenants. Agents can also deal with sorting out repairs, but while some will have negotiated discounts to give you a good deal, others will make additional charges, including their own fees.