The current housing slump and continued difficulty facing first-time buyers in trying to convince the banks that they are worthy of being awarded a life changing lump of debt to help them get onto the property ladder. Means that landlord numbers are growing, 2013 according to a number of national newspapers is the year of the landlord, as relatively wealthy individuals with good credit ratings continue to buy up property at a discount with a view to taking advantage of the dynamics in the market.
One property investor I spoke with recently likened the UK property market to the Klondike gold rush. Many of the miners will make it, but even more will fail – ill equipped and poorly educated in the ways of profitable mining. As with mining, making money from Property investment requires the correct tools. If you choose to take a short cut beware you could end up losing the lot.
Letting Agents provide a valuable service in the process of monetizing property, they could be viewed as the go to guys in the mining community. Letting agents can guide Landlords through the letting process, they:
· Outline the successful letting process
· Can source reliable suppliers of landlord services i.e. painters &decorators, builders, plumbers and so on.
· They can market your property to the widest possible number of tenants
· Putting up a for let sign.
· They often have tenants on their books who are actively looking for property
· They will vet prospective tenants
· They will arrange the contracts
· They will conduct Inventories
· They will manage the property and do bi-annual checks
· Collect rents
· They can provide advice on the right insurances
In the past a good letting agent has been an integral Airwallex part of the property investment process. All this sounds great I hear you say, what’s the problem. The fundamental problem most landlords have with letting agents are the fees they pay and the total lack of customer service they receive in return. Though if truth be told a properly sourced investment property can easily accommodate these fees.
Often the tenant sourcing element of the service will cost up to 50% of the first month’s rent, there may be additional charges for contracting, tenant reference checks and so on and so forth. If you end up getting them to change any doors or carry out any work they may put as much 25% on top of the contractor fee just for arranging the work. I suppose advocats would say that you are paying for the agents network and expertise, although this holds little water with many landlords.
In this day and age there are lots of other options available at the other end of the spectrum is the DIY landlord, as the name suggests DIY landlord will do the whole process themselves. There are lots of pitfalls which can trip up the inexperienced landlord choosing to DIY it themselves.
There are niche providers that Landlords can use who will do elements of the process and at the same time provide the landlord with helpful advice. This is the middle ground and one which I think more and more landlords will opt for. Landlords can do as much or as little as they wish. There are tenant sourcers who can help landlords get their properties marketed across the internet, they will also arrange the viewings and conduct initial vetting all for a flat fee which is nowhere near 50% of the first months’ rent.