The Advantages of Using A Letting Agent
As a landlord, opting to use a letting agent can save a large amount of stress
, time and money. Without the backing of a letting agent, it can take a long time to find tenants through private advertising or through word of mouth. By marketing your own property you leave yourself open to dishonest individuals who may not be who they say they are. Many letting agents have access to large customer bases, encompassing quality tenants. Your property will get a lot more coverage because it will be listed on top property websites and publications. Detailed background checks by the letting agent on behalf of the landlord results in fewer complications such as rent arrears and other tenancy issues. A letting agent, an expert in their field, they will be aware of the relevant legislation that affects a landlord and your letting agent may offer advise on tax and legal issues.
Is it possible to manage my rental property myself ?
Landlords certainly may manage the property themselves, but it should not be underestimated just how much time and experience is required to successfully manage both a property and its tenants. By far the best option for landlords would be to employ a letting agent who will handle virtually every aspect of the tenancy, providing a useful mediator between tenant and landlord at a fee only marginally higher than the letting service. A letting agent will deal with all the associated paperwork with renting a property, relieving a landlord of this burden.
How will I receive rent payments?
Typically a direct debit is established from the tenant's bank account, ensuring that the rent is paid in advance. The letting agent will then pay the rents to you using BACS transfer, following the deduction of their fees and any expenses.
What sort of agreement is used?
Depending on your circumstances and period that you plan to rent the property there are different types of agreement. An Assured Shorthold Tenancy is the most popular type of agreement used for rental properties, these are for letting terms of at least six months.
What happens if the tenant doesn't pay the rent?
The vetting and referencing procedures employed by many letting agencies significantly reduces the risk of this, however a letting agent can provide advice should this happen.
What about a deposit?
Usually a landlord will ask for a deposit of at least a months rent, in some cases slightly more. At the end of a tenancy the deposit is usually returned to the tenant in full provided the property is left in an acceptable state.
What happens when my property is empty?
Upon the vacation of the property, the landlord's insurer must be notified of this change in status according to the insurance policy. While the property is empty the letting agent will be striving to find new tenants as they only charge commission on rent from the tenant.
What are my outgoings?
Outgoings for the landlord will usually include a mortgage, buildings and contents insurance, property maintenance and repairs, ground rent and service charges (if leasehold), agents fees and council tax, utilities and services while the property remains empty.
Will I need to pay tax?
A landlord will be liable for tax on the profit from any rental property in line with UK tax legislation . Any landlord who is resident abroad for a period of time in excess of six months is classed as a non-resident landlord. The letting agent acting on behalf of a non resident landlord is required to deduct tax at the basic rate from any rents received, however a landlord can apply to HM Revenue and Customs for approval to have their rental income paid to them before tax is deducted. Where a rental property is jointly owned, both landlords will need approval for rents to be paid before tax . The landlord should seek advice both from HM Revenue and Customs and the letting agent.
Do I need to tell my insurance company?
As with all insurance it is vital that the insurance company is told of any change in circumstance, including a change in occupancy. Your insurance cover may lapse if you don't notify the company that the property is being rented, the company may not provide a service suitable for your requirements.
Can I rent my leasehold property?
The buildings insurance will be held by the owner of the freehold or their management company, they should be told of any changes. In addition, the freeholder or managing agent's consent must be received prior to letting the property and the letting agent should be advised of any restrictions within the headlease which the tenant should be made aware of.
Who is responsible for the garden upkeep?
Generally, the maintenance and upkeep of the garden is the responsibility of the tenant but properties with particularly large gardens or valuable plants may require the attention of a gardener, the cost of which should be incorporated within the rental value. It would be to the benefit of the landlord to provide the materials required to maintain the garden even in unfurnished properties.
Do I have to provide furniture?
The landlord is under no obligation to provide furniture, particularly as there is very little difference in rental value between a furnished and unfurnished property. Any furnishings should also be chosen to suit the property, a letting agent can provide guidance on this. Even if your property is to rent as unfurnished, you will be expected to provide carpets and curtains and possibly white goods. If you are looking to rent your property as furnished, furniture will need to meet certain regulations, a letting agent can advise on this.
Is it a requirement to fit smoke alarms?
It is a legal requirement for smoke alarms to be fitted in newer properties.
What am I responsible for repairing?
Due to the 1985 Landlord and Tenant Act the landlord is under legal obligation to maintain the structure of the building, the sanitation and the supply of services. Moreover, in accord with the terms of the Tenancy Agreement the landlord would be required to replace any item worn out or broken through fair use.
Am I required to notify my mortgage company of my intention to let my property?
As a landlord you must notify your mortgage company, and obtain their consent when you are considering renting out a property
The Advantages of Using A Letting Agent
By: Rick Flay
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