Landlord Virgin

[beth8991]

Hi All,

Hope you can help. I have a property that I need to start renting out in the Cheshire area as a newbie to this I really wanted to get some general advice on how to go about it. Would love to hear what has worked well and what hasn't worked well.

Do you recommend using a letting agent or going in alone?
Are all letting agents the same?
How do you know a good letting agent from a bad one? - What makes a good one?
Can anyone recommend a letting agent ?
or advise on ones to avoid, and why?
What sort of prices would you be expecting to pay for a fully managed service?

Thanks in advance,

Letting Agents generally charge 10-20% monthly for full management but my advice would be to double check everything they do. Legally, you are responsible for your tenants, not the Agents. Join a landlords association pronto and arm yourself with lots of insurances (rent guarantee, eviction costs, contents etc). Presumably you know the basics; EPC, annual gas safety certification, How to rent guide and deposit protection scheme? Ask a property law solicitor to look over the tenancy agreement and insert any clauses, ie, no pets, sub-letting etc. You will need to let your building insurers know - they may change your insurance.

There is a programme on 5 star called 'nightmare tenants' - some of the situations are terrible so go in with your eyes wide open!

Forgot to say I'm sure you know you will need to declare the income and pay tax. If you have never lived in it and want to sell at a later date you'll need advice on Capital Gains Tax also.

Thank you @lightsabre
Are you expected to sort the insurance (rent guarantee, eviction costs, contents etc) separately yourself or do letting agents tend to help with this process?

finding a good letting agent is key- but difficult. Do you know anyone who is a landlord or a tenant? They can be helpful- even if saying who to avoid.
Even the chains can very from branch to branch. We have been LLfor 20+ years, and started with a very widely spread agency. First letting manager was brilliant and gave us lots of good advice, she left and the replacement was terrible. Moved to another who was good to start, then after about 10 years started to change, he had personal issues and went bankrupt. Unfortunately he hadn't put the deposits into a scheme for 6 months which caused a lot of problems. We are now with another agent who is local but good ( and I keep an eye of them.
Round here we pay between 5-15%. The expensive ones are not the best. My son is renting a house through an agent i know is expensive, they are completly useless.
Lots of people will tell you to manage it yourself, it is possible but time consuming and there are pitfalls. I would certainly use an agent to tenant find and do all of the leg work about checking that people are entitled to rent, finding a guarantor if needed
I sort out insurances, which can offer rent guarantee, eviction costs content cover. Some letting agents will help with problems, but a good letting agent can weed out troublesome tenants.

Look very carefully at insurance cover. We had let a flat to a couple who were not working due to unusual circumstances . They were guaranteed by a charity but I discovered that they invalidated our household /accidental /liability insurance so I had to get another policy pronto.

As Lightsabre mentioned... don't ''forget'' to declare your income to HMRC, they are (rightly so) cracking down on tax evading LL's

Following as we have found ourselves in same position due to house not selling. Our tenant moves in Saturday (we found her through Facebook as she was asking for somewhere) and after looking at agents and weighing things up we've decided to do it alone the first 6m.

@Lightsabre do you advise to join a landlords association even if you're not a "professional" landlord with loads of houses? We've done everything else but that's the one thing on your list outstanding so I'll have a look today!

If you sell the property you will have a Capital Gains Tax liability regardless of if you have lived in it or not. The relief is changing with effect from April 2020 and may result in some owners having less relief and therefore a greater CGT bill.

I would definitely go through a letting agency. We've been stung by doing it on our own.

No rent from tenant since Feb, ignored Section 21. We're awaiting court proceedings for a possession order. No response to texts/letters. We believe he may have left the property but this is not clear. It's illegal for us to enter the property until we get the order. Even then we'll now have to pay a locksmith etc.

The "tenant" works two jobs, one employed, one self employed and has just returned from a week's holiday.

Please look into this more carefully. It's not as simple as it used to be.

If you don't give your tenant a specific government produced leaflet for example, then any future section 21 is void. Did you know you can only take up to 5 weeks rent as a deposit? Do you have access to a suitable AST contract in line with current legislation? Will your mortgage provider be ok with you letting out a property I assume is on a residential mortgage?

Please don't just go off and do it without recognising that's you're starting up a business and will have responsibilities laid out in law.

We use the team that manage social housing in the area. They are excellent. Offer and provide a very professional service. Charge 10% + VAT for their service. We have had a tenant for over 5 years. Occasional issues with the tenant (late payment of rent) some anti social behaviour but have communicated well with us and resolved the issue. They visit the property every 3 months which I thinks is why it works. They spot any problems early. I think it pays to be a good landlord. Your tenant is paying a lot of money and if they report a problem get it put right, do it quickly and do it properly.

I've been renting out a little terraced house I bought as my first step up on the property ladder. I tried to manage it myself for about 7 years, there was an issue with every single tenant, most not paying on time, one tennant took all the white goods, one turned it into a cannabis farm are just a few examples. It's been with an agent for 2 years and honestly I wish I had from the start, it's no hassle at all now.

We started out using a local estate and lettings agent who were expensive and rubbish (didnt notice when rent wasn't paid, outsourced everything despite offering "local expertise"). We have switched to Lettings Supermarket which are way cheaper for a fully managed service. They have local "agents" who do everything you would expect and manage the properties in the area. Our local agent is fantastic and we have been very impressed with her.

I'd recommend getting a few agents round before you decide.

while ideally all agents should be qualified and regulated - they aren't. I use an agent and they are very good, but I'm just lucky with the branch personnel. The buck still stops with me.

you cannot just drop it into the agent and leave them to it.

tenants have lots of rights and protections (as it should be), but that means landlords can get in big trouble if they don't get their side right. And there are professional players out there who know the system, as well as the drug dealers.

for instance, if the deposit isn't protected and the PI issued on time, you WILL get a big fine as soon as one of the ambulance chaser lawyers spots this. If you don't get evidence of issuing a gas safe cert (if the property has gas) before move in you can NEVER evict on a section 21.

if you don't understand the above paragraph - you need to.

also do the sums - with no tenant fees and limited deposits, high insurance costs and maintenance contigency, is it worth it?

good luck.

oh yes - agents can be good but getting services done through them is expensive. I get the boiler and fire serviced as well as the certs done for half what the agent would charge by using my own contractor (and yes he is perfectly legit).

I did myself
I interviewed and selected the one I thought best and good refs
My house was in great condition with premium appliances

3 years - same tenant, no appliance breakdowns etc, no problem with rent

Thanks for everyones help with this.
I think I have decided I definitely want to go down the letting agent option to make it as "pain free" as possible as I have herd some real horror stories. But I definitely need to do more research as to which one to go with, sounds like a good one could save me a lot of time and money if I pick right :)

@beth8991
I have just googled chosing a letting agent. There are a couple of useful articles- one appears to be by a law firm - Tessa's top tips and another list from "on the market" I think Arla also have a check list.
It is worth asking people who rent what ther experience of their letting agent is, although sometimes the LL can be reluctant to sort things out.
Before you chose, try to think about what type of tenant you are looking for- students, sharers, families etc- it might make a difference to the things you supply. Are you happy for tenants to have pets?
Also make sure that you are clear about things such as parking permits, keys. I had a tenant who thought I should pay for the replacement for the parking permit she had lost.

Also ensure that the letting agent has spare keys for absolutely everything- post boxes, all doors, window locks, garden shed, bike shed etc. Some cost a fortune to obtain BUT you can guarantee that if there is only one key, it will be lost.

Hi I've just got 1 tenancy and have been renting 2 years. I use the tenant find and rent collect package through Connells estate agent. I sorted paying the deposit to dps myself as this was cheaper, the agents tend to try and add fees on to everything you use them for so I keep this minimal. I have a landlords and buildings insurance package together through direct line that includes a rent protection component. The agents to differ in what they offer and their effectiveness but largely they are all about making a buck so for me it was about finding the best deal and keeping on top of them. When your setting up if they say would you like x, first ask how much for. Such as shall we set you up with an annual tax summary document - how much? - £90 - no thanks. All agents will sound great but when it comes to it you have to know what's what. They are good at getting tenants and running checks and for the contract. As for fully managed check out the actual charges for a call out as really its just tenant needs something fixed, ring fixer company, send them over, that's what the agent will do only they'll add an Admin fee for it. When my tenancy was ready I invited all the agents to a Saturday open house to make an offer to be the agent I worked with, this showed me who was cooperative and wanted the business, some wouldn't work Saturday, Connells offered me the best deal and package so I chose them. I created a table showing the price brackets of what each agent was charging and what that included and emailed that to each of them in the invite and they were nearly all willing to lower the price to be competitive. Good luck with it all and always meet the prospective tenants yourself before you rent to them.

I have several properties. Recently (August/ September I think ) there has been new legislation.

Landlords can still advertise through a letting agent and the agent can do the repairs etc but obviously they take a cut of the profit. However, now, landlords are expected to do their own checks, where a person works,vemployers reference, previous tenancy, court records for bankruptcy, insolvency etc. Obviously the cost is met by you. If the prospective tenant is found to be unsuitable, you have to go through the process again with the next one and meet the costs again.

Annual gas safety checks cost around £60-£80, landlord house insurance not too bad, need to register with a deposit protection scheme too.
It all sounds a lot but once it's up and running it settles down.
I would strongly recommend a 6 month contract only again the legislation is to change as the government are getting rid of the s21. This part of the legislation makes it easier to get a bad tenant out if need be. The only way round this is a short renewable contract. Obviously you'd need to wait till the contract ends but 6 months is better that 12 or more plus court costs etc.
We have generally been lucky with our tenants . One being in our property for over 12 years.
Good luck and done be put off. It's a really good way of investing money.

not quite. Agents can still do the checks. The new legislation is that tenants cannot be charged any fees beyond a very small set: rent, 5 weeks deposit and a couple of other tiny charges. Even interest on late rent is capped to pennies a day.

you can also charge a holding deposit (again capped) which you can keep in certain limited circumstances - certain lies from tenant, dropping out for no good reason, long delay in replies. Check gov.uk

if sec 21 goes without improvements to sec 8 and court availability, eviction will be almost impossible, regardless of length of tenancy or tenant behaviour.

eyes wide, wide open with this. Also you'll pay full CGT on it when you sell it.