If you are considering letting your own home, investing in a property to let or about to manage a property for someone who is soon to be taken into care what selection process will you use when deciding which letting agency you are going to appoint.
The first question most letting agency staff receives from prospective landlords is “what are your fees”? I really feel this is not the correct way of selecting an agency. Very few of us buy the cheapest car or the cheapest house so why seek the cheapest letting agency. Cheap fees will mean cheap service and some valuable important procedures will be missed such as:
• Staff training
• Having sufficient staff to run the business professionally
• Handle the varied breaches of contract that some tenants often cause
• Have enough staff to be able to answer the phone
• Have independently audited client accounts
• Have protection in place for clients money
Most letting agencies hold hundreds of thousands of pounds of client monies. If a letting agency is not a member of Safe Agent or ARLA and they offer cheap management fees they may well be using client monies to subsidise their running costs. Every year scores of letting agencies disappear with client monies leaving landlords in debt. If the cheap letting agent has not passed on the rent they have collected for say 3 months (telling you the tenant is in arrears) and they use the deposit they hold it is likely working on average UK rent they will have stolen £4,000 of your money. To make matters worse you have to pay the deposit back to the tenant and then try and find the owner of the letting agent (along with many other landlords who are also in debt).
The moral is only select a letting agency that is a member of the Safe Agent scheme and a member of ARLA (Association of Residential Lettings Agents). It is a requirement for a member of Safe Agent and ARLA to be a member of the Property Ombudsman. ARLA licensed agents have undergone comprehensive training and are industry professionals. ARLA is the only membership body that requires a comprehensive audit of its members accounts and financial procedures. If you are considering using an agent that isn’t a member of Safe Agent and ARLA Licensed ask yourself a question – would you think would you buy a holiday from a travel agent who is not a member of ABTA or IATA?
Can you really afford to lose £4,000 to save 1 or 2% of the annual management fees?
This article was prepared and written by Terry Lucking owner of Belvoir Lettings Agency Cambridge. Terry offers free advice and free property visits to all investors who are considering buying.
For more information or to ask Terry a question send an email to email@example.com