If you have bought a property in order to let it out, or you just decide that you have enough room in your current property to accommodate a tenant, you are going to have to do your homework, look carefully at your situation and prepare for what can be a bumpy ride.

Being a landlord can be as stressful, or as easy, as your personal situation, and attitude, dictates. It is no longer a lonely job of multi-tasking and excessive responsibility though, as help (offered by numerous agents and service providers) is at hand.

You can, of course, choose to take everything on yourself but be sure that you understand the amount of time and commitment involved if you do decide to go down this route.

It can be much more practical to enlist some professional help, this will of course come at a cost, but it can lead to a much more successful, smooth running venture.

Whether you get help with finding a tenant, organising the legal paperwork, managing/maintaining your property, or all three, it can be more fruitful than doing everything yourself.


Employing a Letting Agent

A letting agent can offer you the following services:

1. Introduction service: this involves the agent finding you a tenant for your property, for a commission, usually in the range of 10% of the rental income.
2. Introduction and rent collection: in addition to the service explained above this has the inclusion of the administering of rent collection every month; the commission for this service rises to around 12% of the monthly rental income.
3. Full management service: this service includes all of the above as well as offering the service of the general management of the property, including any necessary repairs. Approximate commission for this option is around 15% of the monthly rental income.
4. Full management with rental guarantee: this is essentially the same as the full management service but with the added incentive of a certain percentage of the rent being guaranteed, this is the most expensive of the options and usually sets you back around 17% of your monthly rental income.


A Landlord’s Responsibilities

It is important that you know that, whether you employ a letting agent or not, there are certain responsibilities, as a landlord, that lie on your shoulders. The following will need to be undertaken, often by law.

• You need to obtain a certificate that proves the safety of any gas boilers or appliances.
• You must ensure that there are adequate fire escapes and fire extinguishers and that all other fire regulations are met. Different rules govern different types of property so be sure to check with your council if you are uncertain as to what applies to you.
• You must make certain the compliance of your soft furnishings and upholstered furniture with fire safety regulations. Furniture should be made of non-flammable materials.
• You need to take out insurance to cover the property. It is also advisable to add additional clauses to protect your tenant against injury whilst on the premises as well as protecting the property from malicious damage.
• Another recommended undertaking, although it is not currently mandatory, is to have an electrician service any electrical appliances or plugs.


Finding a Good Managing Agent

For the money that you will be paying your agent you have every right to expect them to be proactive in your area and reliable to boot. An active, enthusiastic attitude along with a good sense of reliability is of paramount importance when you are entrusting an agent with such responsibility.

However, things are not that simple so it is important you do not just go with the nearest agent and enlist their services without shopping around a little.

Once you have got the role you would like the agent to take on clear in your mind, you should look to visit three local agencies and ask them the following questions:

• How do they go about marketing the lets in their area?

The agent’s response will give you an idea of lengths to which they will go to find you a tenant. It will also give you an indication of the company’s profile.

• How many potential tenants do they have on their books?

This will give you an idea of how likely they are to find you a tenant, and how long it is likely to take.

• Are they members of any of the national letting agent’s organisations?

Member agents of organisations such as ARLA (Association of Residential Letting Agents) or NAEA (National Association of Estate Agents) will be bound by the codes of their relative organisations and so you will have a certain degree of support from these organisations if you are to fall into any dispute with their members.

The NAEA has a particularly encouraging policy whereby its member agents that are involved in letting must hold ‘client money protection cover’. This guarantees your money up to a certain limit in the event of the company that you are using going bust.

• Have they got professional indemnity insurance?

A lack of this type of insurance could leave you exposed in the event of any malpractice on your agent’s behalf.

• Are there any surplus charges on top of the commission?

Make sure that you are certain of all of the costs involved in the employment of the service. Do not take it for granted that the commission will be the sole cost as there can be separate charges on top. Start-up fees, tenancy agreement fees, inventory fees and check in fees are just some of the methods used by agent’s to escalate the costs.

In short, lower commissions do not necessarily equate to a cheaper service! Ask for a clear list of all of the services and all the included fees so that you know exactly what you are letting yourself in for.

Finally you must check that the agent is able to provide you with the bare essentials outlined in the following list:

• A signed tenancy agreement
• Inventory references
• Employer’s contact details
• At least one month’s rent in advance from a future tenant
• Rent paid by standing order, straight into your bank account

Once you have made the decision to hire a letting agent you will need to organise for a valuation. It is advisable to get three valuations from different companies, as it is when you are selling a property, to ensure that you are getting reliable figures.

You should aim to bring in at least 130-150% of your monthly loan repayments in gross rental income, with your net rental income covering both your management fees and buy to let mortgage costs and still leaving you with ample profit to render the project viable.

It is always worth remembering that any profit that you do make will at some point, almost certainly, be needed to cover any repair costs or lack of income in vacant periods should your property lie unoccupied for any period of time.