Letting agents – If you’re not happy with yours, think about switching rather than ditching.

One of the likely outcomes of the ban on upfront agency fees will be an increase in the fees charged to landlords. Coming on top of tax changes, landlords’ profitability is going to be under pressure. More and more of them will be trying to save costs and wondering whether they need to work with a letting agent at all. After all, it’s not like the old days when to find a tenant you would put a card in the newsagent’s window. These days, there are plenty of online platforms where landlords can advertise their property without paying for the privilege.

Firstly, let’s just say there are no legal requirements to use an agent. If you want to go it alone, there is nothing to stop you. You’ll have to take responsibility for many of the things agents carry out and comply with the legal aspects of renting your property. You’ll be the tenant’s first port of call when there’s a problem and the one who stands all the risks. Providing you have the knowhow, it is possible to do a good job of managing the letting of your own property. You could save money, but it will definitely cost you in terms of time.

The pros

You can save money.

You’ll have full control.

You will get to meet potential tenants face-to-face and make your own judgements.

The cons

You’ll need to invest more time in being a landlord.

You’ll have more responsibilities to manage.

You’ll have to sort all the problems.

You are potentially more at risk of defaulting tenants and legal issues.

Is DIY really a risky business?

Yes, it can be. Online listings sites are the target of all sorts of scamming practices which exploit the trust of both landlords and tenants. If you are thinking of a DIY approach to letting, do your research and be very careful. Use referencing services and protect yourself with insurance or the money you save in letting agent fees could easily be swallowed up by a tenancy that goes very wrong.

The crucial questions

In our opinion, anyone considering a DIY approach to letting their property needs to think carefully and answer a few questions.

1)      Am I getting the best possible deal from the agent?

2)      Can I afford the deal?

3)      Have I got the time, knowledge and temperament to go it alone?

To be a successful landlord without the support of a lettings agent requires a certain mindset and level of resilience. You’ll need a thorough knowledge of the property market in your area. You’ll want a network of reliable tradesmen available at short notice for repairs, maintenance and emergencies. You’ll need your ears open for information about dodgy tenants and scams, and you’ll need to be bang up-to-date with rules, regulations and licensing. Summing that up, you’ll need to be hands on, a good negotiator, able to cope with problems and have spare time available.

The role of an agent

It’s easy to list all the pros and cons, but they should always be considered in the light of what your agent is actually doing for you. Whatever service level agreement you have with them, whether it’s simply finding tenants and sorting the agreements or a fully managed service, you are paying for their time and expertise.

Good letting agents are professionals, qualified and registered with bodies such as Propertymark for the protection of your interests and assets, and their input often goes far beyond the legal requirements. Their operations are built to be efficient and cost-effective because that’s how they control their costs and remain competitive. Obviously, rates vary. Some work on a percentage basis, others on a fixed fee. Either way, if your time is worth more to you than what they charge, you’re getting a good deal. Try estimating the time you’d spend managing your property without their help and build in time for the occasional emergency or legal issue – they do happen. Convert that time to money using a reasonable hourly rate and you’ll probably find their service is good value. Remember, you can always try negotiating a better deal.

It’s very easy to criticise agents, but there are some excellent ones in the sector, delivering very good value to their landlords. If you’re not happy with yours, think about switching rather than ditching.