As a 1st time LL would we be better off using agents or finding our own tenants?

[pippala]

As title can anyone advice?
Agent fees are between 10-15%of rent. Rent profit working out at 7%
We thought of advertising in local paper and online and finding our own tenants.
Is it buying trouble to do it alone?
Should we prehaps use an agent for the first year until we know what we are doing?
If the tenant renews after the first lease is up the agent still charges 8% even though they haven't had to find us a new tenant!!!
Thanks in advance to all those experienced LL out there

When I was researching going into the BTL business the advice seemed to be that it was a good idea to use an agency Year 1 so that the money was coming in and the tenants were vetted while you were getting to grips with all the other hassles of being a LL. The two things that will kill your venture quickest are non-payment of rent and an empty property. If the agency fee is going to tip the business plan from profit to loss, however, you may decide that it's worth taking a calculated risk

Thank you I agree! Just worried if say a tenant wants to stay after the terms of lease we would still have to pay 8% for agent doing nothing!
But yes also worried about non payment of rent or empty property!

You need to ask yourself that if the tenant doesn't pay up, what the agent is contacted to do to sort it and what you would have to do. I think you will find that most agents don't help you out that much if things go wrong.

Another thing to consider is that if you meet potential tenants yourself you will get a feel for them (if they are nice/solvent people). You can also check references yourself and gauge if they can afford it.

My DP rents his old flat out and the rent was £775 per month. The agent placed a single girl of 19 in the flat who was earning £13000 pa. She defaulted after 2 months and left early leaving us seriously out of pocket. The agents still charged us 10% and said they had done no wrong by renting it to her in the first place as she had a guarantor and a good credit history (despite the fact that on £13k pa you clearly can not afford £775 PCM rent). We did all the legal proceedings ourselves and the EA were no help whatsoever. Actually just kept banging on about finding us another tenant (for another 10% of course)!

If you can spend the time to interview I would encourage you to do so. The EA is just a middleman at the end of the day, you still need to 'manage' it yourself unfortunately if things go wrong.

Many Letting Agents have several schemes available. Some do an "introduction only" service which basically introduces the tenant to you. They may also do all the credit checks and place the bond in the TDS service, which you have to use as a LL, or there are penalties.

www.thedisputeservice.co.uk/

It might be worth having a nose around just for peace of mind.

I can't really give any decent advice about going it alone because my house is on a fully managed service as I am living overseas currently.