Hiring a company or person to care for your buy to let investment or second home is a big decision. You need to make sure that whoever you choose to manage the property is as committed as you are to your investment or previous home. They’ll know the legal obligations you and they have to adhere and what’s involved in the actual rental process. Hiring the wrong property manager can have a substantial negative impact on your property income and your level of stress but on the other hand, changing agents can cause you and your tenants stress, confusion and annoyance, especially if one of the letting agents aren’t as cooperative as you’d like. Quite often, agents will be less than cooperative at handing over your business to a more reputable company who will do the job right.
How do you make the right choice from the start?
Check out Reviews
Before just typing into Google “best letting agent in Leicester” and clicking on the top result, be mindful that it may be a paid ad or a technology company with a strong SEO (Search Engine Optimisation) strategy placing them at the top of the results. Instead, what you should do is take the name of the company and check their reviews either on Google or AllAgents and on Social Media. Good reviews equal a good reputation and nothing speaks higher of a letting agents business practices quite like their other clients and tenants. Ask around within your professional network, look up the company on Companies House and make sure they’re registered with a Property Redress Scheme. You’ll find it more easier to ditch your agent before you hire them than to ditch them later and deal with the rigmarole of changing agents in the future; when Harry Albert Lettings & Estates have received clients from other agents after the client chose to disinstruct their agent, they have struggled to obtain the full property records and tenant details from the other agents in a timely manner.
Look at the Fees
Once you’ve determined from the reviews which agent will be right for you, you have to consider whether their fees are worth the expense but landlords, those with a second home they’d like to rent out and property investors need to realise that they will receive the level of service they pay for; in other words, pay cheap and you’ll pay twice. Whilst it is common for Leicester Letting Agents to charge as little as 4%-5%, Leicester Property Insight feels a fee level of 7-10% is more appropriate. If your agent is unable to cover their costs from the monthly commission, you should expect a substandard service and with the average rent in Leicester for a two bedroom property being £741pcm, it is difficult to understand how agents will be able to manage to cover their costs on just £30-something per month. If an agent is touting a fee of less than 7%, you need to question what hidden fees they charge; eg, do they charge for individual inspections? Do they charge maintenance and repair arrangement fees? Do they charge extortionate fees for a tenancy renewal? Do they charge during void periods?
These hidden fees can really mislead those with a property they’d like to or need to rent out. If you see an agent who charges just 5%, like Severn Estates on Melton Road, you may find monthly costs rising steeply compared to the agent who charges 7% but with no hidden fees so it’s important to know the full picture before going ahead. There are few agents in Leicester who are part of a Transparent Agent Network, such as Harry Albert Lettings & Estates who fully display all fees for landlords and tenants prominently on their website.
Our partners in the industry share their own horror stories and difficulties, from emergency repairs and terrible tenants; every day is different and nothing can adequately prepare a property manager for the day to day challenges of managing your property quite like having lived them themselves. Ask your potential property manager how many properties they have managed previously and how many they currently manage, as well as how long they’ve been managing them for, also ask them about their legal obligations. You do not need a qualification to be a letting agent or property manager so it is worth asking for relevant qualifications. Harry Albert Lettings & Estates are fully qualified in residential lettings & property management and regularly train their staff going forward, the managing director of the company regularly undertakes continuous professional development programs to ensure the company remains at the cutting edge of local, independent residential lettings and property management.
Determine Communication Style
When you consider hiring a property manager, you should ask what their preferred form of communication is. Will they write to you via email when a pipe has burst and the funds available don’t cover the cost of repair so they require your authorisation or would you hope they’d ring you as a matter of urgency? We’d recommend going with the latter agent who will pick up the phone when times are tough and reach out to you, minimising damages (and costs), although, the personal, unautomated service will inherently cost a little more but it’s a price worth paying.
Property managers aren’t just limited to the conversations they have with you, remember; they have to communicate with your tenants too and a poor agent who refuses to treat tenants with the dignity and respect they deserve will eventually force the tenant to leave (usually unintentionally) to find a property with a more caring, people-oriented manager or landlord.
Managers may choose to email, call or provide online access to a property performance portal (Owner Portal) to ensure easy access to information from any location.
Void Periods & Marketing
Nothing impacts property incomes more than void periods. A good property manager will be able to maximise property incomes even during void periods! A property manager will also use an effective, tried and tested strategic marketing plan for when your property is empty. Ask how long they expect properties to remain vacant for and what they will do during void periods to ensure an income keeps coming in. These questions can ensure you aren’t paying fees for an empty house, flat or room that is not being sufficiently advertised.
Tenant Screening & Evictions:
Just because a void period can kill cash-flow, it doesn’t mean your property should house the first applicant that comes along. A nightmare tenant can bring a world of chaos, damages, and costly legal issues for a landlord to go through and deal with, especially if you’ve opted for a less-professional agent who has run for the hills at the first sign of trouble. Ensure that the property manager/letting agency you’re looking at has a solid tenant screening process. This should include credit and background checks, tenant history, and referencing. A great property manager will have a clearly defined vetting process to ensure your tenants are the right tenants first time. They’ll also have the ability to take swift action, including eviction action, if the tenant turns out to be the tenant from hell; sometimes, fraudulent tenants will be able to bypass referencing processes which is why a clearly defined, robust referencing system is required.
Hiring a property manager can have its pros and cons, but once you have decided what’s in your best interest, ensuring you hire the right company available will have a big impact on your bottom line. A great property manager can mean the difference between dealing with stressful cash-flow killers or smooth sailing, passive income and a great ROI from your property.