Should I use an agent or do it myself?
Like everything, there are pros and cons with regard to using a letting agent. It's very important to weighthem all up carefully.
is the rental property local to you?
If you don't live locally to your rental property it is almost essential to use an agent, to avoid hours spent travelling to show the property to prospective tenant - a good reason for investing locally!
Agents take most of the hard work out of the letting process. Also they can be there to 'hold your hand' when two weeks have passed and no one has wanted your flat!
Dodgy tenants are less likely to go via an agent mainly because of their stringent referencing procedures. And of course agents are more likely to be aware of 'well-known' rogue tenants.
These days, particularly since the regulations that came into force since 2015, there is a LOT of 'red tape' involved in letting a property and letting agents can usually organise all this for you.
There is a section of tenants, particularly those looking for more high end property who, despite the costs, seem to prefer to go through an agent. This is probably because they like to keep a distance between themselves and the landlord. Others may be concerned that the ongoing management of the property may be more reliable if they are going through an agent. This is sometimes true, sometimes not.
The cons of using an agent
Number one - agents are VERY expensive! They will charge you, the landlord between 7% and 10% for a let only option. Let's average this. Let's say you agree 8.5%, what does that actually mean in terms of hard cash? Say the rent is £1000 pcm. You will be charged £1020 plus VAT, making £1224 for the first year of tenancy. You may well be charged this although probably less each time that tenant simply renews!
On top of all this, agents often slip in other 'expenses' such as charging both the tenant and you for the Assured Shorthold Tenancy Agreement. They will also usually charge up to £40.00 just to register the deposit with the Tenancy Deposit Scheme. Sometimes they can take up to £500 in so-called admin fees from the tenants.
Also, you often have little control over the CHOICE of tenants.
The Great 'Full Management' Deception
Many novice landlords opt for the Full Management solution, whereby the agent not only finds the tenants, they 'collect the rent', deal with tenants' problems and check the tenants in and out. This can easily cost up to 15%. As for 'collecting the rent', all this means is you receive the money AFTER it has passed through the agent's account - in other words you get it late! If the tenant fails to pay, the agent will write to them but ultimately it'll be YOU who has to deal with the problem.
Incidentally, if you do go for the 'full management' option, always ensure that the agent is a member of ARLA.
How to let it yourself - properly
1) Chat to local agents and check the internet to establish a REALISTIC asking rent.
2) Make sure the property is very presentable and take decent photos.
3) Use an online only agent that allows you to post your ad on major internet property portals such as Primelocation, Rightmove etc, with equal status alongside agents' properties.
4) Once you've found what you believe to be satisfactory tenants, obtain proper ID and reference them properly.
5) Take out Landlord Rent Guarantee and Legal Expenses Insurance.
The cost should be about £15.00 per tenant to reference them (depending upon their employment status), plus £99.00 for our Rent Guarantee Insurance and about £60.00 to advertise on the main property portals, plus about £12.00 for an AST.
TOTAL COST - ABOUT £!87.00 - a saving of over £1000.00 on just the Let Only agent cost!
The point here is that by advertising on the premium portals, such as Rightmove, by referencing the tenants FULLY and by using Landlord Rent Guarantee and Legal Protection Insurance, you will probably be just as likely to find a good tenant as if you used an agent. I would however always advise against too much cost-cutting when marketing and letting your property as it can prove a false economy.