Eek, going to be a landlord - advice pls!

[Mehrida]

We currently live in a 2-bed house and today saw a new house we'd like to buy. We can't afford to sell it, and the rental market is pretty decent so that's the route we're going down.

I'm currently googling for local letting agents and will get some appointments booked in with them.

Before we meet with them - can anyone suggest anything we should ask them? Give me an idea how much we'll have to pay them in fees? Or just any general advice would be much appreciated.

Thanks!

you will need:

a buy to let mortgage on the property
landlords insurance to cover building, your contents, legal expenses (in case you get a rogue who won't pay and won't move out) and malicious damage.
a gas safety certificate, renewed annually
money for fixes

agents charges vary on the service - 10 to 15% plus VAT is usual.

agents are unregulated. Choose one which belongs to ARLA or similar, no guarantee of service but does stop them running off with your money.

What will the agents actually do for their fee? (we took a gamble & didn't retain their services after finding a tenant & it's saved us a packet but that's up to you)

What checks will they do on prospective tenants? Do they accept DSS?

Will they do an inventory? Photographic or just a crappy written one?

Where will they advertise your property? Most tenants start looking online so very important that they're on rightmove etc.

There's lots more I'm sure...

Ask them for a valuation, any work you should do before letting, how they handle deposits, organise and fund repairs and safety checks, how quickly the net amount of rent is paid over to you and when. 15% gross rent is typical for a full management service , less if you do any part yourself but probably no less than 7.5% for finding tenants.

Also whilst this may seem an easy way to move on, assess whether by the time you have paid tax, repairs/maintenance, mortgage , insurances you can afford to do this , particularly bearing in mind that you are liable for bills and council tax for any period that the property stands empty.

Thanks all. We're fortunate that the mortgage is currently under 50% and the bank are letting us rent out on the same mortgage.

If we sold it, we'd get about 25k less than we paid for it, and the rental market seems decent here while houses aren't selling so we're content it's the right decision. Don't expect to make any money but should cover our costs easily enough.

So is it common to NOT use an agent after getting the tenants in? I thought that was pretty standard?

I would think about continuing to use an agent. Who do you want the tenant to call if there's a problem? The agent can be a useful messenger/organiser, but you do pay for the service.
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Some landlords manage the tenant themselves, and just use the agency as a finder and credit checker. I would strongly recommend a first-time landlord to retain the agency - I wouldn't do it any other way as there is just no way I want to deal with the issues arising from my rental property directly, and my tenants have all been very reasonable individuals so far, touch wood. A friend of mine is now the tenant to a highly inexperienced landlord who believes she is a great deal more experienced than she is, if you follow me. He genuinely is an experienced landlord and so it's a nightmare combination - he has extremely high expectations of her and she just gets mightily pissed off with him 'politely' (after I have extensively edited some of his emails) telling her how to do run her business. An agency as a neutral third party would make a massive difference in this situation.

I have one tiny property, close to my own home with a dream tenant (touching wood here!) and we manage it direct, which has saved thousands over the years.
However he could have turned out to be a nightmare & we would have had to learn as we went to resolve it (costly!).
We have also experienced terrible service from agents as tenants (eg we told them about a leaking shower repeatedly, and it took the carpet getting ruined before they actually got a skilled plumber in) so I don't rate them in the slightest. My tenant speaks to me direct if he's got an issue & it's sorted straight away.
Again, just my experience & I'm sure there are some excellent agents out there hiding
I completely understand why managed let is the no-brainer for the majority but just be aware there is another option I'd definately find out how long you would be tied to them if you weren't happy with their service.

My repeated experience as a tenant was that agents were an expensive waste of space who just passed messages, unreliably, rarely got anything fixed and expected me to take time off work to oversee the workman if they did, so I've never used one as a landlord, at all.

It does depend whether you have time and the inclination to deal with things yourself. It's perfectly compatible with working full time though, especially if you're nearby. Few things are really urgent, most just require a couple of phone calls to get someone round to fix something.

You could certainly use one for your search. They will do credit checks, which you probably can but not sure how easily. I always checked references (previous landlord if poss, current one will be desparate to get rid of bad tenants), took more than a month's rent as deposit (to discourage absconding without paying final months rent) and, went on my 'gut feeling' about whether people were ok or not.

I learnt to trust that after not feeling right about someone - the lesson is you may not know why at the time but you will find out. Communication is key, you need tenants who will tell you about things before they go too far wrong but have some common sense, so don't bother you constantly with nonsense.

Do the sums, allow for replacing something like a shower or fridge (if you're including white goods) every year, plus minor repairs, gas cert etc. Also build a contingency fund against the big things; boiler, roof etc. Remember unoccupied periods. Don't forget tax and learn how to calculate it - read the guidance notes carefully and ask questions of someone knowledgeable.

• Ask agents about the quality of their inventory (pictures a must) and how well it stands up to deposit disputes.
• Will they be able to advise you on bringing your house up to standard e.g. If any fixtures or fittings don't meet current building standards and could be considered dangerous.
• How often do they inspect.
• What problems have thy experienced, how have they dealt with them, how long to evict non-payers, how much rent lost.