Should You Use a Letting Agent to Manage your Let Properties?

Should you use a letting agent to manage your let properties?

Well, it depends.

A lot of it comes down to having a network of contacts (tradespeople) who can come and do work for you reasonably quickly, at a fair price and who are competent – so in order of importance and frequency of use that means plumbers, then heating engineers, then people who can fix gutters, downpipes and roofs (a roofer can usually do all of these), then electricians and finally, window repairers, decorators and locksmiths.

That is assuming you do not want to do the work yourself and / or you are not qualified to do it – especially relevant for electrical and heating work, of course, where the law prevents non-qualified people from doing most repairs.

I would say if the property were close to where you live and you already know good tradespeople from your own experience and from the experience of friends and neighbours you trust, then you are probably well capable of managing things yourself.

It will certainly save money on a letting agent.

Of course, a letting agent can get involved in inspection of properties and renewing tenancies, but that is something you can easily do yourself. In fact, we let all our tenancies roll onto a monthly periodic basis, so at the end of any fixed term, we do not offer a new fixed tenancy, the tenancy simply continues as a monthly or contractual periodic tenancy. One simply emails the tenant to tell them this is going to happen – and seek their acceptance.

If you live far away from where the property is, then you will likely not have a network of tradespeople, so may well want to use a letting agency to manage your tenancies.

Also, if you are just too busy in your life or your day job or live abroad and are not physically close to your let properties, or just see it as too much of a hassle, then once again a letting agency may suit your purposes.  

For simple management (with no tenant find) what you pay the agency should be no more than 5% plus vat. People with portfolios of 3+ properties that are in one place and being managed by the same agent should pay less than that.

Bear in mind the costs you will end up paying for actual works arranged by an agent will likely be more than you will have paid if you had arranged similar works yourself. This is because most agents will load up the fee and make a margin there, which will be in addition to the fee you are paying them, you just won’t know it!

And don’t expect any economies of scale the agency gets from managing multiple properties for other landlords to feed through to the cost you pay for repairs and maintenance. It won’t.  

Works that are arranged by the agent will likely be deducted from the rent that they collect along with their agency fee, with the net amount then paid over to you, usually in arrears of a month or so.

If you think the costs you are having to pay for works done are unreasonable, then query them with the agent.

And it is worth saying right here that you should not enter a long open-ended contract for management with any agent. Check the contract carefully because if they are crap, you need to be able to get out of the arrangement fast and hire a more competent agent. Sure, there are regulators and ombudsmen you can complain to, but this is a very, very slow road to probable non-resolution.

Think of all these issues in advance before you buy a property that is a long way from where you live, where you have no network or reliable contractors and where you will likely have to use a letting agent.

There is a lot in my book about how to choose a good letting agent, both for tenant find and tenancy management. Get it. See the links below.

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