Letting Agents and Tenant References and Checks by LettingFocus

Landlords using letting agents to find a tenant for them need to be very careful that they set out EXACTLY what references they expect the letting agent to obtain from the tenant as part of the reference checking process.
Those of you who have read my book “Successful Property Letting” will know that I tend to go a little bit further than most letting agents do in terms of the kind of the references I wish a tenant to provide.
Where the property in question is close to me I still tend to do the “finding tenant” job myself using websites like Upad -see the link at Services and Products for Landlords
I do the viewings myself and then get the tenants to provide the employers and past landlord references plus all necessary documents - which I then validate.
And I ask to see a lot of documentation too – bank statements, utility bills, proof of ID etc.
Plus I do a credit check.

Why Do It Yourself?

Sometimes I am pretty busy on my corporate consulting work and speaking engagements and I sometimes think to myself, “Hey, why am I still doing this myself?”
The answer is complex.
But I find that I can do reference checks a lot faster myself than a letting agent can do it, so I’m not sitting and waiting ages for a “Go” or “NO GO” decision on the tenant.
Plus I get to see all the references the tenants provide, I study them carefully and can make up my own mind as to whether they will be good tenants or not.
And with the stress and cost one has if one gets a tenant from hell, it is really a job that I am loathe to lose control of.

As an example of this, a consultee of mine recently used a letting agent.
The agent had the tenant fill in the application form. But though the tenant was from Korea (and clearly outside the EU) the agent did not think to ask to see the work permit from the Home Office.
Doh! Basic stuff! But all too common a problem, I'm afraid.

Agree What Checks Your Letting Agent Will Do

In this case, the landlord had not agreed in writing exactly what reference checks they wanted the letting agent to do when they had agreed for them to do the work to find the tenant.
It’s an easy mistake to make and one that I have to confess I have made in the past.
I do use letting agents from time to time (and I have to for my properties that are far away because I cannot physically do the viewings.)
However, the letting agency is fully appraised as to what refs I need and he sends me copies of the tenants application form and copies of the references obtained too.
I trust them.
In theory all good letting agents should be as thorough on reference checks as he is.
After all, they should not want to provide you with a duff tenant because that will strain your relationship (or it should!).
But some letting agency staff are blinded by the commission and frankly could not give a monkeys about the quality of the tenant.

Be Wary of Pure Commission Driven Letting Agents

This type of letting agent will have the view that as long as they have ticked the minimum number of boxes as part of the reference checks and have got their commission, they are happy with that.
A letting agency near us has staff that I know are entirely on commission. This is the sort of firm you should be wary of and keep on a tight rein.

Private Rented Sector Policy Is Often Made on the Hoof

As part of the corporate consultancy work I do for mortgage companies and in the social housing sector, I get to read a lot of position papers on the private rented sector.
But I am continually amazed that in the private rented sector, so much government policy is made without the benefit of any good quality research.
Julie Rugg in her superb report into the private rented sector found the same thing.
Policy has been and continues to be made that affects landlords and tenants but which is not rooted in valid research findings.
What research there is, is often limited in scope and uses too small sample sizes.
An example is the proposal to require houses converted to HMOs to obtain planning permission. It may be sensible policy, but where is the research to justify this proposal?
I may come back to this issue another time.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of landlord information.
Hello, I’m David Lawrenson.
I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling commercially published property book for the last 3 years.
Our main business is at a corporate level for organisations - both public and private companies.
We provide consultancy for banks, local authorities, social housing providers and other organisations – helping them with their landlord facing or buy to let product strategies and services.

OTHER WORK

We also write for property websites and are regularly quoted by the media. In addition, we have written articles for numerous publications including The Independent, The Telegraph and quality landlord websites.
For private landlords, we also find some occasional spare time to help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk to the investor.
We pride ourselves on giving independent unbiased buy to let advice on either a one to one mentoring / coaching basis or through our occasional group seminars.
Unfortunately, in the UK today, property advice in the UK is still largely unregulated and what counts as “good advice” is too often more about making the promoter money than giving useful information to the investor.
With no links to property firms, developers or bridging loan providers we can advise on where and what type of property to buy for investment and when to buy it. We also show you how to manage tenants properly.

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Copyright of Blog: David Lawrenson 2009. This blog is updated roughly once a week usually on a Monday or Tuesday.

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LANDLORD LICENSING AND REGISTRATION SHOULD BE CENTRALISED SAYS LETTINGFOCUS.COM

John Blackwood, a director of the Scottish Association of Landlords tells me he knows of many landlords who have just had their applications for the Scottish landlords register acknowledged and licenses issued by their local authorities – almost three years after they applied for them!
If the government goes ahead with similar proposals in England and Wales, will our local authorities or whoever administers it be as inefficient I wonder?
Perhaps, as Mr Blackwood suggests, it would be better to have a single central authority managing the scheme rather than having the whole thing handled by different town halls with varying level of efficiency.

BUT DO WE REALLY NEED LANDLORD LICENSING?
I would say if we must have it, then it must be enforced in a way that really drives out rogue landlords.
But let’s stop and think.
Who are these bad landlords, who do they prey on and how do they get away with it.
I suggest that a lot of these guys are letting to people in overcrowded accommodation.
I suggest that many of their tenant victims will be people who don’t know the law or who are not confident enough to stand up for themselves for fear that they will be evicted and wont find it easy to get another place to live.
Partly this will because they have a poor credit history (or none at all). I suggest many will be migrants, possibly illegal migrants with little English and perhaps also dependent on their “landlord” for a job.
Now let’s look at the position of a tenant who is not vulnerable but who has a poor landlord.
If this tenant’s landlord fails to carry put basic repairs or meet his landlords’ obligations under the law, the tenant can complain about their landlord and try to enforce their many rights.
OK, it is true, their landlord could carry out a retaliatory eviction at the end of a fixed term contract, but good tenants will soon find a good landlord. And they will know what signs to look for next time.

GOOD LANDLORDS AND GOOD TENANTS TEND TO GET TOGETHER
Personally, I like it when tenants come to me if they are good people but their previous landlord was the sort who could never quite get round to fixing the boiler or sort out the damp problem because I know they will really appreciate me.
The fact is that bad landlords end up with bad and vulnerable tenants and good landlords end up with good tenants and vice versa.
What licensing must do, if indeed it becomes law in England and Wales, is have in place very tough sanctions on those landlords who make VULNERABLE tenants lives a nighmare.
That must mean heavy fines which are enforced fast and a wide publication of the scheme especially among the most disadvantged.
But for goodness sake, leave good landlords alone.
And allow the good landlord to get rid of bad tenants too – and much faster than is allowed under the cumbersome court processes of today.

MORE TIPS ON USING A LETTING AGENT
Make sure you know the law. I know the law is deadly boring but as a landlord you are running a business and this means there are some things you legally have to do and some things you mustn’t do. And if you don’t comply you can face fines and even go to prison.
“Ah”, you say. “But if I’m using a letting agent they will deal with all the legal issues and my landlord responsibilities right?” Well, possibly yes, but don’t bank on it. Some agents still operate without any liability cover and are not part of any bonding scheme. If they go bust how long will it be until you hear about that? A few months, a year maybe?
And what would happen to any rent they were collecting for you in that time and all those gas checks that they are supposed to arrange for you?
So, you have to know the law (see chapter X) and occasionally check that they are doing what they should be doing for you as your agent.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too. And find out about OTHER great deals we have arranged at our Property Affiliate page. More wil be added over the next month, once we have checked them out.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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Local Housing Allowance Benefit Rates Are Too High & Open to Fraud say Lettingfocus.com. What’s Your Experience?

In our patch and the patches of many other landlords it is clear that Local Housing Allowance (LHA) rates are some way above private market rents.
Here in our area the local authority pays tenants the equivalent of £996 per month for a 2 bed property. But if you tried letting to private tenants who are not in receipt of this benefit it is not easy to get much over £870 for that kind of property.
So, no surprise that recently I have seen a few ads on letting sites where it says something along the lines of, “If you’re interested in letting to tenants on DSS/ LHA and are willing to say the rent is higher than it really is when I make a claim so we can share out the extra, then please contact me.”
Mmmm, this sounds a bit like fraud to me.
So the over-high LHA rates are making sure the taxpayer is being well and truly ripped off by being a green light to a few rogue landlords and tenants to try to “ring” the system.
So, please tell me if you are in an area where LHA is well above local rents.
We would also be interested in hearing about any cases where you know this kind of fraud is taking place. You don’t have to give details – we would just be interested in how widespread this practice is.
Let me know by emailing david@lettingfocus.com
Oh - and you may be wondering why are LHA rates so high?
Is it just that the Broad Market Rental Areas (BMRB) set by the Rent Service are just too wide and encompass too many diverse areas within a single BMRB? Yes, I would say so.
Could it also be that the high rates be a bribe by the government to get landlords to let to tenants on LHA (because landlords don't like the new system in which LHA is now normally paid to the tenant).
I think so.
The simple (though costly) solution to all this would be more council houses, but maybe I'm still living in the 1970s.
Thanks to LS for the tip off on this story. Local presence can help!

MORE TIPS ON USING A LETTING AGENT
Tell the letting agent what kind of tenant you want and don’t want. Think about who you want as well as how you do tenant reference checks.
Will you accept students? Animals? How about Student animals? Will you accept DSS? What should the tenants’ minimum income be?
Why tell the agent all this? Well, if you muck an agent about he will rightly have nothing more to do with you. So, be straight and be upfront. And confirm every conversation in writing too.
Tell the letting agent you will want to see the application form the tenant completed and the Tenant Report the agent gets back from the referencing company. Insist on reserving the right to speak to a prospective tenant before you agree to the letting. But only reject a tenant if there is a good reason to do so.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
Find out about some great deals we have arranged at our Property Affiliate page.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
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Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require a link to the blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted.
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How to establish what rent to charge by David Lawrenson of LettingFocus.com

How to establish what rent to charge by David Lawrenson of Letting Focus
Just back from a lovely 2 week break in Mexico to find Britain is still mired in doom and gloom.
OK, there are some tentative signs that here in London more property is coming onto the market at more realistic prices which is good news for those of us looking to buy – and that includes me.
However, with RBS and Lloyds pretty well finished as independent banks and other banks severely hit too, that is a heck of a lot of people either out of work or with severely reduced assets. (Don’t forget that lots of city employees have shares in the banks they work for and the fact that these are now worth a fraction of what they once were means that people have a lot less to spend on things like buying property.)

BE SENSIBLE ON SETTING RENTS
With more people turning to letting their property because they can’t sell it (at a price they want), the extra supply of houses and flats to rent means that many areas are now seeing a fall in rent levels.
So how do you establish a fair rent?
Well, you could ask a letting agent, though in my opinion some agents suggest you can get more than is actually possible.
These types of agent know what the real rent should be but they hope that their optimism will mean you give them the business of finding a tenant rather than trusting your property to a more realistic agent.
I suggest you look at websites like Gumtree.com (good in London) and rightmove.co.uk (for everywhere) and look at rents that properties similar to yours are on for.
Then take away 10% to get to a rental figure that will let your place fast with no empty periods – or “voids” in landlords jargon.
Why take off 10%?
Well, just think for a minute.
The places that you see advertised at sites like Gumtree and Rightmove are there because they have not been let.
Places that are available to let at more realistic prices will be taken down from these sites because THEY HAVE ALREADY LET.
Yes, I know it’s obvious but thisvery obvious fact is lost on a lot of people, including for a long time, me.
So be realistic and when you buy property to let, plan on rental levels that are achievable and will get your property let fast.

MY MAN DAVE THE GAS ENGINEER
Everyone needs a Dave.
My own Dave has saved me another £2,500 by finding an alternative £40 part for a boiler that two other gas engineers said was not available.
The other engineers said as the part could not be found I needed a new boiler at a cost of £2,500 including labour.
Dave did the same thing a year ago on another property and that boiler is still running fine.
Everyone who is a landlord needs a Dave.
It took me 10 years to find him.
Dave is his real name but before you ask, he is too valuable for me to share him with anyone else I’m afraid.
And if you find your own Dave, look after him and pay him well. When the big freeze comes you’ll be glad you did.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer and property speaker and I run this well known property letting and investment blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for anyone looking to buy property for themselves or to let out.
In my work as a consultant I help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2008 and 2009. This blog is updated once a week.
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ARE YOUR TENANCY DEPOSITS SAFE FROM ROGUE LETTING AGENTS ASKS DAVID LAWRENSON OF LETTING FOCUS

My last newsletter, which covered how Accidental Landlords are being ripped off by letting agents, generated quite a lot of interest from the press.
So I thought I would highlight another letting agency man trap which is just waiting for the new landlords to fall into.

If you use a letting agent and that agent handles the tenancy deposit for you, you ought to think carefully about what happens to that money.
All deposits taken under an assured shorthold tenancy which started on or after 6th April 2007 in England and Wales must now be protected in one of the various tenancy deposit schemes. For more on this read our article on Tenancy Deposit Schemes
If you use an agent, bear in mind that it is you, the landlord who is ultimately responsible for the deposit regardless of whether you have assigned responsibility for it to a third party like an agent.
This means that it is down to you, the landlord, to ensure that it is protected and the tenant is told where (and in which scheme) it is, within 14 days of receiving the deposit.
Any penalties that result from not protecting it properly are the final responsibility of the landlord.
If the deposit is protected in one of the insurance based tenancy deposit schemes (which do not physically hold the deposits) and your letting agent later goes bust, the insurance based scheme will ultimately look to the landlord to pay the tenant back on theit deposit (assuming that there are no valid deductions for damage, of course.)
Landlords should be under no illusions that the insurance based tenancy deposit schemes are a “client money protection scheme.”
They are most certainly not!

SO HOW CAN A LANDLORD PROTECT THEMSELVES AGAINST THEIR LETTING AGENT GOING BUST OR MISUSING THE DEPOSIT MONEY
Well, for a start, before they use an agent, they should carry out financial checks on that agent because letting agents are not regulated and can hold client money without any form of protection for the consumer.
So, use a letting agent or manager who is a member of RICS or ARLA – they do provide some form of protection for client money.
Other letting agencies may be part of associations that also make it a requirement for members to take out Client Money Proection Insurance cover. If they are, do a check that they are really still members and make occasional checks to make sure the insurance cover is still in place.
Not all agents may be members of a trade association but that doesn't mean they are rogues. If they are not in an association, find out how long they have been in business and ask neighbours what their repuation is like.
And if you are in any doubt, just hold the deposit yourself and make sure it is put into one of the tenancy deposit schemes. The National Landlords Association says that an agent cannot refuse this demand. Also, to be on the safe side, make sure rent payments are paid direct into your own account.
Want to add a comment - feel free. To read other comments that have already been added to this blog, you have to click on "Link To This Post"at the bottom. Then go to the bottom of the post to read the comments.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property title - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer, property speaker and I run this well known property letting and investment blog
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for anyone looking to buy property for themselves or to let out.
In my work as a consultant I help private individuals with any aspect of buying property or buy to let. What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role, I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
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Our home blog page should then open & you should then see my smiling face at the top. Then page all the way down and on the bottom right it will say “Site feed” - click there and away you go.
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Letting Agency Fees Can Be Traps for Accidental Landlords says Letting Focus

Just the other day, I popped in to a local letting agent and was pretty surprised.
It was all very impressive with a posh waiting space and lots of young twenty somethings all busily taking calls at rows of high technology work stations. Wow! You don’t see that kind of thing in our local high street too much.
I was there to see if they could help me.
You see, right now I’m pretty busy preparing for my talks at the London Property Investor Show – the only property show that is worth bothering with. (You should go -see our ticket offer below)
So I thought, maybe this agent could take the time off my hands and find a tenant for a property that I have which have just become available.
As you may know, I usually do all this stuff myself for my London properties.
I find that finding and checking tenants’ references is easy for me because I know what I am doing and have done it a lot.
And in London, we have the blessed Gumtree.com free site to use to find tenants which works very well – as long as you remember to take a few pics of the property and keep refreshing your ad each day.
So, I asked the agent what their fee was.
“10% plus VAT” they replied.
OK, so far so good, but this is a bit like saying that a piece of string is, “Oh, so long.” In other words it is not much use at all.
“And what term is that 10% based on?” I asked.
“All our tenancies are for 24 months” was the reply.
Gulp. …..Now let’s see.
For this one bedroom flat, which was to rent at £758 per month, that is a cool fee to them up front of £2137.56. Crikey!
Now, let’s be honest, how many tenants do you get who come along and would willingly sign up to a 24 month term?
Not many. In fact, in all my 22 years of letting, I have never had one who wanted such a long tenancy.
For a start, they don’t know what you will be like as a landlord and 24 months is a long time to be stuck with a lousy landlord. But more importantly most tenants like the flexibility that renting gives them and would quite naturally like to be able to get out of a letting after 6 months. As a landlord too, you would be nuts to willingly sign up for a 24 month term because if you get a tenant who is, frankly a bit of an a**e you will want to be able to get rid of him a bit earlier than 24 months.
And unless, he was at least 2 months overdue on the rent or decides to run a brothel at the property or do something else of a nasty criminal nature, there is no sure fire way you can be easily rid of him if you have signed up to such a long term.

OPT FOR 6 MONTH TENANCY AGREEMENTS
That is why most sensible landlords opt for 6 month fixed term contracts which are extendable if everyone is happy after 6 months has ended – i.e. you simply agree to roll the same tenancy agreement on (it is called a monthly periodic tenancy)
After I walked away, I called this agency, this time posing as a tenant.
They explained about the 24 month thing - but only when pressed.
I queried why it was so long.
And the answer came back: “Sorry, all the landlords insist on it” which is, of course, is utter nonsense.
However, many new Accidental Landlords who have decided to rent out their home because they can’t sell it - will fall for all this – which is why letting agents like this one are trying to get away with it.
Oh, what happened in the end?
The next day, I let the property for nil cost using an advert in Gumtree. A nice lady tenant moves in next week.
And before I get complaints form letting agents reading this, I should say that not all letting agents operate like this.
Many agents in London and all the ones I have used for my Kent properties are sweeties and charge a fair rate for very good work.
However, there are rogues about – and some of the rogues are big names. So watch out.

OFFERS ON OUR NEXT EVENTS
Come to my next London seminar and networking meeting – details here… Property Seminar. Just email us at david@lettingfocus.com and give us your full name – and that’s it. Then jst turn up and pay on the night.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of property investment expert lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 3 years has been the UK’s top selling property title - buy the UK's top selling landlord book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert property journalist, property speaker and a well known landlord blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide landlords coaching
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property mentoring programme at my website.What’s unique about lettingfocus.com is that we offer you help as an independent property investors coach because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week.
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Take care referencing and checking tenants even if you use a letting agent says LettingFocus.com

So far the credit crunch has not led to any large increases in unemployment.
However, I see the press is now carrying more stories of lay offs here and there - so we can expect some rises in unemployment to start to filter through to the official figures before too long.
How does this affect landlords?
Well, I would say that today more than ever, you need to make sure that the tenants you get are good ones and are fully referenced plus that they are in the type of sector of the economy where they are less likely to lose their jobs.
Why?
Well, if they lose their jobs they may struggle to pay the rent and / or have to move to less expensive accommodation – which is bad for them and whichever way you look at it, also means more hassle and expense for you the landlord.
In the worst case, it could also mean that they could stay put and just not pay any rent at all – meaning you have to seek repossession - and that process can take months, often with little chance of you ever recovering the money owed.
In the current environment, if I had to choose between equally good tenant candidates – one of whom worked in an economically shaky sector and another who worked in a (usually) slightly safer public sector job as a teacher or a civil servant, I know which one I would sooner go for.
Yes, it’s tough on some – but hey I’m not the one who was responsible for the state the economy is supposedly in.
Also, if you use a letting agent, don’t fully trust to new agent on this issue unless you have used them for a while and know they are reputable and can be trusted on this.
Sadly, there are a few rogue agents out there who cut corners on referencing and don’t do it properly.
Remember it will be you, not the agent, who is the one who loses out financially if the tenant turns bad.
So ask the agent to let you see references they obtained.
And don’t listen to all the guff some letting agents will give you about the "Data Protection Act and that you cannot see the references, the reference report of the tenants application form" because your tenant should have authorised for you, the landlord, to see the references on the application form he filled in when applying to rent the property.
If your agent won't let you see these things, go to one who will.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of landlord advisors lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 2 years has been the UK’s top selling property title - buy the UK's top selling property investment book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert freelance property journalist , property speaker and a well known property blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide landlords advice
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property investors networking programme at my website.What’s unique about lettingfocus.com is that we offer property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week.
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Letting Agency Renewal Fees - The Lettingfocus.com view

I recently did some consulting with a chap who was not happy that his letting agent was going to charge him to renew his tenant’s contract – the original tenancy had been arranged through the agency.
My view is that all landlords must read the contract with the letting agent BEFORE they sign it. If they have signed to say they agree to being charged a renewal fee then that’s tough, I’m afraid.
I’m not an agent but on the matter of agency fees, my view is that agency letting fees are not high as long as you avoid renewal fees.
Simply extend the tenancy - doing this should not involve you or yuor agent in any work, except simply asking the tenant if that's OK with them.
In fact, a friend of mine has just asked me if I would find a tenant for him whilst he is overseas. My answer was No.

What A Letting Agent Does to Find a Tenant
Putting in adverts, doing viewings on wet evenings and weekends, checking references, doing check ins and dealing with the general public and the like is all a lot of work – and not something I would personally do for the going rate agency finding fee of around 8 to 10% plus VAT.
Sorry, but I have better things to do than that – which is why I like to keep my tenants by keeping my rent increases reasonable and my rents below the market average.
The reality is that there is not much cash in lettings – agents often use it as a loss leader to get more lucrative work selling properties.
This is why they often try to make some extra money by charging renewal fees – even though they often don’t do much at time of renewal – and why they always try to load up fees for other services like printing off copies of tenancy agreements and making charges to tenants for doing references etc.

New Tenancy Agreement
In this particular case the agent wanted to issue a new tenancy agreement.
I said that, seeing as the landlord indicated he did not want to necessarily issue a new longer term tenancy, why not just extend the existing one to make it a periodic tenancy.
One benefit to doing this would be that the landlord would not need to join a Tenancy Deposit Scheme because the original tenancy started before April 2007 – i.e. before TDS became compulsory. So, he would save on the hassle and / or cost of having to register for TDS because TDS is not compulsory for Tenancy Agreements starting before 6 April 07.
If you need more advice on where to letting agency fees ask me. I’m David Lawrenson from property investment experts http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on UK property investment and a well known property freelance writer and I contribute to newspapers and a host of property websites, write a property investment blog and run a property investment advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my landlord blog and details of my networking, advice, property seminar programme at my website http://www.lettingfocus.com/
Click here for details of my next London landlords networking meeting.
What’s unique about lettingfocus.com is that we offer independent property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.

Letting Agents and Estate Agents Can Be a Pain Outside the Big Cities

I have just bought a property in East Kent, an area that is set to do very well once the fast new train lines are built in three years and the area becomes more commutable. Plus, I expect this area will be increasingly “found” by second home owners over the next 5 to 10 years.
I will admit though, that whilst I wait for the capital growth to come through, in the interim I will have to put up with some pretty low rental yields. (The gap between net (after cost) rental yield and true full financing costs is about 1 to 2 per cent in this area even if one bargains really hard and buys really cheaply!)
But I’m confident capital growth will more than make up for this low rent in the long term.
I mention all this because one thing that always astounds me is how utterly unbusiness like estate agents can be outside big cities like London and Manchester.

Agents in London Do Return Calls Eventually
OK, I know many in London are not too good but at least most do return phone calls - eventually.
I actually signed up with 4 estate agents in this particular town to buy a property (sorry, can’t say exactly where it is) and only one bothered to get back in touch with me or ever sent me any property details. It is just incredible.
And as I am finding out, they are not too keen to make money the letting side too. For example, I contacted and left messages with two letting agents to put the house on with them on Saturday morning. It is now Monday night and they have still not got back in touch with me.
So, if you want to make some money head down the M2, turn right down the A2 and become an estate or letting agent locally. You’ll make a fortune.

ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON

LettingFocus.com are the buy to let experts and I’m David Lawrenson, the author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work and which are of minimal risk.
I have been a landlord and property investor myself for over 25 years.

At LettingFocus we offer independent unbiased advice for landlords and property investors on a one to one mentoring and coaching basis as well as through occasional group seminars.

You should know that property clubs and property advice in the UK is still mainly unregulated and advice is often poor.
With no link to property firms, developers or bridging loan providers we at LettingFocus can give unbiased independent advice on where and what type of property to buy for investment, when to buy and how to buy property at a low price.
We also show you how to manage tenants properly and in ways that take up as little of your time as possible.

CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
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We have GREAT OFFERS on a range of products for landlords too, click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
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Letting Agents - Should I Use a Letting Agent to Let my Property? Should I Pay Renewal Fees Every Time The Tenancy Is Renewed?

If you use a letting agent, their fees are not set in stone so look carefully at the rates they quote in their contract.
Be prepared to negotiate (or remove altogether) any clauses in their contract covering payments of fees that you feel are unjustified or excessive.
For example, if a fixed term assured tenancy becomes a rolling or “monthly periodic tenancy” after 6 months then the workload for the agent should be minimal.
In these circumstances, all that might happen is an exchange of emails between your tenant and your agent to say they wish to stay on - the tenancy becoming a monthly rolling or periodic one. This type of situation does not justify a hefty renewal fee.
So make sure you don’t sign a contract which gives the agent the right to charge a fee on renewal of each tenancy. If you do, you’ll be paying a fee for as long as the tenants stay.
Neither is a big fee justified for producing a tenancy agreement. These are available from the internet or from landlords associations or in my book “Successful Property Letting – How to Make Money in Buy to Let” at little or no cost.

Don't Be Mean
But don’t be mean.
Good letting agents are worth their fees and work hard and do unsocial hours on your behalf - so be prepared to pay for the work that the agency does when they do it. In many cases this will mean 7 to 10% for finding a tenant and at between 3 and 5% for managing them.
But just make sure you don’t sign up to pay renewal fees where little or no work is done by the agent.

CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE PRIVATE CONSULTING click here: Property Mentoring
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon

ABOUT US

LettingFocus.com are the experts on landlord issues and I’m David Lawrenson, the author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.

We help landlords and property investors make money in property by coaching them in ways that work, that are ethical and which involve minimal risk.
I have been a landlord and property investor myself for over 25 years.

At LettingFocus we offer independent unbiased buy to let advice for property buyers and landlords both on a one to one mentoring and coaching basis as well as through occasional group seminars.

Property syndicates and property advice in the UK is still largely unregulated and what counts as “advice” is too often more about making the promoter money than giving useful information to the investor.

With no link to property firms, developers or bridging loan providers, at LettingFocus, we aim to give unbiased independent advice on where and what type of property to buy for investment, when to buy and how to buy property at a low price.

We also show you how to manage tenants properly and in ways that take up as little of your time as possible.

See this related article from our Articles pages: http://www.lettingfocus.com/pages/myarticles_ChoosingaLettingAgency.html

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Letting Agents Check Those Letting Agencies Contracts Carefully

Lots of estate agents are now busy telling people they will do a HIP for you for free. However, as Elaine Moore points out in last Saturday’s ever informative FT, there is a big catch.
She says, “If you are selling a house where the estate agent provides you with a Hip, it belongs to them - not to you.”
So, if you later to to sell it with another agent, or take it off the market completely you’ll probably be hit with a pulling out fee.
As I have said before, you need to carefully check all clauses in any contract you sign with agents – be they letting agents or estate agents.
If I had a pound for every landlord who suddenly finds to his surprise that 6 months down the line his letting agent wants a fee because the tenant has renewed, I would be a richer man. (If the original tenancy contract is just renewed, there should be little if anything for the agent to do – and certainly nothing that justifies a 5% or higher fee.)
Back to main site; www.lettingfocus.com
The link to the full text of the FT’s article is here: http://www.ft.com/cms/s/55ae3f74-fa2f-11db-8bd0-000b5df10621.html

AT OUR WEBSITE LETTINGFOCUS.COM:

At LettingFocus we give independent advice to landlords and property investors.
We also provide consultancy to banks, property websites and public sector bodies, helping them with their buy to let and landlord facing products.

THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
ONE TO ONE PRIVATE CONSULTANCY click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event
We have OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING including corporate consulting click here: Property Seminars, Networking Evenings and Consulting
TO READ CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else you fancy at Amazon.co.uk

To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!

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Copyright: David Lawrenson 2007.