Ditch your letting agent and save £1,000s

Rents are rising in many parts of the country and landlords have their choice of good quality tenants. Do they really need an agent to do the letting for them?
With rents at a record high and a recent report by The Association of Rental Letting Agents showing that 75% of agents had more prospective tenants on their books than property available, it’s definitely a good time to be a landlord.
Landlords who want to increase their rental yields further should ask themselves whether they really need a letting agent. By opting to let the property yourself, you can save the letting fee - typically 12% to 15% of the annual rent. With average rents in the UK recently hitting £700PCM, that’s a whopping £1,000+ a year in fees!
As well as saving the agency fee, by opting to let the property yourself, you have more leeway in negotiating the rental figure. This can make the property a much more attractive proposition for would-be tenants.
Here we list some of the main elements of the letting process. If you think you have the time to manage these things yourself, maybe it’s time to ditch the agent.
Advertising for tenants
OK, so you won’t have access to the estate agent’s website – but that doesn’t mean you can’t advertise online or that you’ll find it difficult to market your property. Many tenants prefer to deal with individuals anyway rather than a faceless agency – so make sure you say you’re a private landlord in your ad – it may well increase interest in the property.
In the past, landlords have tended to use agents to let their property because agencies have access to those websites that generate the most traffic among those looking to rent. However, with tenants in some areas clamouring for a place to rent, it’s worth thinking about advertising on free sites like vivastreet, tepilo and loot.
Alternatively for a small premium – typically £40 - there are companies like Landlord Direct which will place your property on the larger property portals like rightmove, ensuring maximum online visibility of your property.
Credit checks and references
Credit checking prospective tenants is crucial. While you’ll have to pay a fee (around £15) to the checking agency, there’s no reason why you can’t organise this yourself instead of paying an agent to do it. At Discount Letting, there’s a current offer for a free check if you open an account. These checks should come with a comprehensive report on the tenant with details of County Court Judgements, undisclosed addresses or aliases and credit scores.
The tenancy agreement
While it is possible to let the property by an oral agreement alone, it is advisable to enter into a formal contract or tenancy agreement with new tenants. For run of the mill residential lettings this will normally be an Assured Shorthold Tenancy (AST) and standard AST forms are available from law stationers like Oyez and are straightforward to complete.
Letting agents can charge up to £250 for the execution of the tenancy agreements so this is a definite potential saving. While the AST will contain lots of standard clauses you should ensure that you are happy that it accurately reflects your wishes regarding major aspects of the tenancy like length of agreement, the rent payable and what is and what isn’t allowed to be kept on the property.
Check-in and inventory
It’s critical that at the beginning of the tenancy the condition of the property is accurately recorded. You can employ a check-in company to do this – there’s a helpful list at the Landlordzone or you can do it yourself. If you do it yourself it’s important to be as thorough as possible – listing the condition of each room separately and noting down the state of walls, furniture and carpets. Disputes can then be much more easily resolved.
Deposit scheme
Most landlords will take a security deposit from tenants – typically 4 to 6 weeks rent. For ASTs landlords are now obliged to join the government backed Tenancy Deposit Scheme. This means, as landlord, you must nominate an authorised company with which to deposit the deposit and lodge the money within 14 days of the beginning of the tenancy. For the duration of the tenancy the deposit remains with the scheme. All of the recognised schemes are accessible to private landlords.
Legal checks
As a landlord there are a number of legal requirements and checks that you must carry out. While the list may sound onerous, it’s not that difficult to arrange these yourself. Checks include obtaining a gas safety certificate, an energy performance certificate, ensuring furniture complies with fire safety regulations and that electrical appliances on the property are safe.
After the let, what about management?
Once the property has been let, there’s the question of who deals with ongoing issues like maintenance and repairs, rent arrears and other potential breaches of the tenancy agreement.
Many landlords will opt to use an agency to deal with these problems but you should always consider managing the property yourself - there are now incredibly useful and comprehensive online resources to help you with this like Landlord Property Investment. If you take out landlords emergency insurance, you will be covered for emergency repairs, boiler breakdowns and locksmiths (typically £300 to £500 per claim). Best of all, it costs just a few pounds a year and the tenant can liaise directly with the insurer - you don’t even need to get involved. Find out more.
More: Insurance for landlords | Choosing the right tenant | Economics of being a landlord
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I so strongly agree with many of the enclosed comments – dispense the agent asap !! Firstly do some research on the net & go to an Exhibition for landlords - Consider becoming a member of the National Landlords Association (or similar) who have a helpline and advise you of legal updates via e-mail. Be confident it really is possible and so much easier (and better) to handle it yourself…..take control today!!! (http://www.landlords.org.uk/ NLA Landlord Membership packages start from as little as £1.34* per week!) In the mid nineties, as a single person, I first bought my first terraced property. I only used an agent for my first room rented then became aware of and used the "rent a room" scheme to achieve the income from my spare two bedrooms – I could choose my own housemates and their rent gave me a tax free income, companionship and security in the property – they were often at the property when I was not and we had an understanding that they were to be careful with the fuel bills. As a resident landlord – the law gave very favourable benefits to you; (although a written agreement / contact is advisable), an AST was not essential & those renting rooms were only due one week of VERBAL notice to quit – although I only once had to use this option, many of my tenants left voluntarily after living in the house for over two years or more in the house. I was very careful with the funds that I gained, kept within the law and still have some very good and valued friendships with past residents and gained a great insight into how people deal with their lives …. Most of all I became confident quite quickly and I paid off my whole entire mortgage in less than three years !! I learned very quickly that land agents are only interested in making money for themselves - not you. They provided incompetent workmen and had a very annoying inability to competently carry out the simplest of instructions on your behalf etc, etc, etc...AND THE LEGAL RAMIFICATIONS OF THEIR INCOMPTENCE OFTEN CAN MAKE YOU VUNERABLE !!! Ask an accountant to help you out with the Tax Self Cert although the Tax office offer help to you to do it on line. Just always bear in mind that time moves on & laws change, so keep reading up & be in the know, attend a couple of Landlord exhibitions, join the Association & begin to enjoy being in control & dealing with issues (well &) with confidence. Most of all……… When you get a good tenant, LOOK AFTER THEM WELL !! Good Luck !!
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Unless you know exactly what you are doing there are devious tenants out there who are specifically looking for the novice landlord to take for a ride. Been there, done that. Unless you really understand the system I advise you to become a member of the National Landlords Association who have a helpline and advise you of all legal updates via e-mail. I manage 30 properties for one landlord privately - this is my business. I am not an Agent. Be very, very careful as some of the advise given within this report is vague and not completely accurate (regarding a verbal AST - just dont do it! Everything needs to be in writing). The Agent may be expensive but could actually save you a fortune if you happen to inadvertently let to a professional rent dodger!
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I absolutely agree with what houstonstewart says, why should a landlord pay to secure the tenants deposit?,I paid an agent 3 times to secure a tenants deposit, because the tenant had 3 tenancy agreements ,even though the tenant didn't stay for 3 years. every time a new tenancy agreement was given the agent charged me a fee to register and on top I have to pay an admin fee to the agent. It was really working out very expensive. So I told the agent I am registered with mydeposits but he wouldn't accpet it. I and have paid a one off fee to register with mydeposits and after that every time you register a deposit you only pay £30.00. But the agent didn't want to hear this and wants to keep the deposit and for me to pay the costs. I rang ARLA and complained, but they didn't help me and didn't want to know about it. Also I did not get any of MY money back pro rata, when the tenant left early. The fee I paid to the agent was 10% of the annual rent but I did not get anything back. , when a tenant left early. and also the same with the fee they charge to secure the deposit. I have lost a lot of money due to this. another agent knowingly took 1 years tenant finder fee, when the tenant only wanted the flat for 6 months. they charged me 10% plus vat , plus other costs, like £150 for the tenancy agreement etc. When I asked for the 6 months fee back they didn't want to know you and found excuses and didn't return your phone calls. I like to know is there anybody I can complain to about these conn agents? . they should be punished. what they are doing is tantamount to theft. so please if anybody out there know where I should complain, please let me know. thanks
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30 September 2012