You’re a new landlord or maybe an existing landlord thinking of instructing a new agent. What are the questions you should be asking of any lettings agent in Corby you are considering instructing to look after a major asset you own?
The most frequently asked question letting agents are asked is “what are your management fees”. Unless the agents answer is what you are expected to hear or lower than what you expect the relationship has started off on a bad footing.
The amount of money a landlord can save by reducing management fees is very small. The question is most often asked because landlords new or existing are not aware of just how much money can be lost or saved by controlling many other extremely important aspects of the letting process.
The maximum amount of money that can be generated is quite easy to define. Lets work on a monthly rent of £600. The gross annual rent will be £7200. Unless letting rooms this is the maximum rent that can be generated (subject to a rent review during the 12 months).
Most likely the largest of any expense will be the mortgage. The annual spend on a mortgage is outside the control or influence of a letting agent.
The questions you should be asking a letting agent you are considering instructing are:
o How do you ensure maintenance issues reported by the tenant are not caused by the tenant?
o How do you record evidence and recovery losses for damage caused by the tenant or the tenants guests?
o How much does your rent insurance cost and what exclusions apply? Compare the costs and cover offered the variations can run into £100’s.
o How much does your legal expense insurance cost and what exclusions apply?
o Can I compare my household insurance with yours to see how it protects my asset against accidental damage, malicious damage caused by the tenant or the tenants guest or a third party?
The tenants may have paid a damage deposit. The deposit will be protected if the tenancy is an Assured Shorthold. So regardless of how much deposit you have you will need to prove and justify any claim for damages. If your agents failed to record evidence at the start and end of tenancy you will land up footing the repair bill.
The fact is we live in a time where more people blame someone else for their own actions/mistakes. So unless your agent is tenacious in identifying the real course of a fault/leak or damage and able to provide strong evidence that helps establish responsibility you will be exposed to incurring costs that should have been charged to and paid by the tenant.
My advice to anyone carrying out research for selection of a property letting agent should spend time reviewing the questions above and not focus on the management fees alone.
A 1% difference in management fee on a monthly rent of £600 is only £72.00 per year.
Is it really in your interest to instruct the cheapest agent or the property letting agent who can prove they will help you keep more of the annual rent?
You may feel good pushing the letting agent in to submission and dropping their rate by 2% or £144.00.
But is it not better to have the agent highly motivated to work for you knowing they will earn a healthy profit and be proud to provide you with a Service Level that will protect your asset and your annual rent?