The Role of Letting Agents

Some people truly enjoy the work of managing property; others prefer to focus on the process of finding and negotiating the deals while someone else takes care of the day-to-day management of the property. Whether you will manage your own properties or hire an agent to do it for you depends on your own preferences, how much time you have, and often the property itself (type and location).

One strategy to consider is to manage your first few properties yourself so that you learn exactly what's involved. Then, as you add to your portfolio, consider turning the management task over to an agency so that you can concentrate on the investing side of your business.

Managing or letting agents offer a variety of services at different rates. Talk to a number of different agencies before making a decision. Find out what they offer, what they charge, and what their experience has been. In particular, ask if the agent is a landlord as well. If possible, get referrals from other investors. The primary types of agency services include:

Finding the tenant. This agent will advertise your property, process the tenant applications, obtain and check references, and set up the tenant agreement. His work is done when the tenant moves in.
Finding the tenant and rent collection. In addition to finding the tenant, this agent will collect the rent according to the terms specified in the tenancy agreement, deduct the agent's fee and VAT, and remit the balance to you, usually on a monthly basis.
Full management service. This agent will do essentially everything for you, including finding and screening tenants, collecting rents, and handling day-to-day queries, maintenance, and problems.

Depending on the services you want and the skill of the agency, you'll typically pay anywhere from 7.5 percent to 15 percent of the rent plus the VAT. Often agents are willing to negotiate their fees if you have multiple properties or have established a long-term relationship with them.

Not every agent provides every type of service or will work with every type of property. As you consider prospective agents, be sure the services they provide will match your properties and your long-term investment strategy.

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