Why should I pay for a high street lettings agency?

Landlords, Lettings

This is a great question to ask yourself and I am going to try to answer this in the most impartial way possible.

Now I have recently written a blog on why you should use an online agent and the best online agents out there for DIY landlords and I will still advocate that if you are a DIY Landlord then you should not be using a high street letting agent, you should be saving your hard earned money and going online doing it yourself.

But what is the difference?

The difference between using an online letting agent vs a high street letting agent is how much you will pay for the service, the service itself and the expertise. I will explain the latter below and why it is worth the money. Using the online model, you may only venture into a few hundred pounds which you will need to pay upfront whereas using a high street agency will go into £400-£1000 on average.

See my blog above for what you get for what you pay.

If you are a landlord with no idea what they are doing or don’t want the hassle or pressure of finding a tenant, then I advise using an agent.

You may be a landlord who is in a different area but is more than capable and wants to invest the time to do it themselves, you can always use https://viewber.co.uk/ which can do the viewings for you as an option.

High Street Letting Agency Fee and Service

It sounds like a ‘cop out’ doesn’t it that all I pay for is service and that costs me more than a few hundred pounds more, well I will do it myself. That is fine for some landlords and as suggested above, if you are that inclined, it will upset you to pay an agency to do their job, so please do it yourself. However, if you do not have the time, headspace or organisation to do it yourself, then get an agent.

Not just any agent, because if you are paying for ‘the service’ then please do not pay for a bad one. Like when choosing a builder, accountant, personal trainer or restaurant, spend your money on a good service and you can check this out by calling up a few agencies in the local area to see how they treat you. Test them too, ask them to send you some information via email and give you a call back in a few days, see how many do and see how many don’t. That will give you a good indication of who should get the gig of a valuation at your property.

Most good established letting agencies have been doing their job for a number of years and have seen many tenants come and go, the good, the bad and the ugly. If the agency provides a good service and has a range of experience when it comes to tenants, then they should be capable of choosing a good tenant.

This is where the service comes into it. There is an art to lettings that many different people don’t know.

My rule of thumb is

• The Price
• The Condition
• The Checks

Please check my blog on how to market your property to the right tenant for a full breakdown.

This is essentially what you are paying for if your full-time job is working as a bank manager, or solicitor or you’re retired. Unless you are dealing with tenants daily, there are chances that you will slip up and choose the wrong tenant, not always but a higher chance.

The service that ‘good, experienced agencies’ should be delivering for you is in the pre-qualification checks on tenants in the initial process. It starts with the filter system, when a landlord or agency advertises a property for rent, they usually receive 20-100 leads within the first week if it is marketed in a presentable manner on the right portals, at the right price.

From here, there should be a pre-qualification questionnaire on each individual tenant where you receive their ‘story’.

• Why are you leaving your existing property?
• How many people moving in? How many children? What age are the children? (Some people think their 25-year-old son or daughter counts as a child still)
• When do you need to move by?
• Any pets?
• What do you do for work?
• How much do you earn? Full time or Self Employed

You are having a conversation with the applicant and trying to get a full ‘story’ out of the applicant, it should be relatively simple without hiccups.

Good story example

My landlord is selling, we have been here for 3 years, it is husband, wife and 2 kids, full time jobs earning £60k per year as ‘whatever it may be’ and we need to move in a months’ time.

Bad story example

I am calling up on behalf of my cousin who wants to rent a 1 bed flat. He has been out of the country and has been back for two weeks, uber driver, is self-employed and can pay 6 months upfront. Has a child that might stay at the weekends.

I am not judging the bad story cover, but a few things stand out for me, why has he been out of the country? Does he have a tax return? Why is he offering to pay upfront? Why is he not calling the agency and why are you on his behalf? It seems strange…

Not judging the guy, but let’s be frank – this is a red flag. This is what you are paying an agent for in the first instance, the filter system.

Finding out the good tenants vs the potential problems. It all starts here on whether you will obtain a good tenant or not. When you build a house, you need a solid base, and these are the foundations of a good tenancy.

This is just the first part of the service; the rest comes with the paperwork. A good letting agent should not be allowing a credit check company to do ALL the paperwork, this is the equivalent of allowing a nursery or a school to raise your child, the parents lay the foundations.

The Meeting

Once you have written down the pre-qualification answers, you book a viewing and meet the tenant.

A good agency will have a database/CRM System to take notes and book in viewings, here you can evaluate what you have written against what the tenant tells you on the viewing. If the tenant has told you a true story, then it is easily validated or if they have lied then you can usually see this too.

e.g., the tenant says it is 4 people moving in on the viewing but 3 people on the phone, where did the extra person appear from?

Upon a meeting, you should be able to get a good ‘gut feel’ from a tenant, it gives you time to have a good conversation, chat and decide for yourself whether you like them or not. If they are ‘shady’ or ‘seem forthcoming.’

Whether they are dishevelled, or their appearance is good. How they look with their appearance is usually how your property will look once they have moved in.

Once a tenant or a few tenants (if the condition, price, and marketing are done right) want to take the property, then you go on to the next phase.

The paperwork

A good agent should be obtaining

  • 3 Months bank statements
  • 3 months’ payslips, P60 and Tax Return (if self-employed or Ltd company)
  • Passport and BRP Visa

This should be done for ALL adults, if not one adult, then a good ‘story’ on why.

Again, you might get another story here, which you need to investigate.

Once you receive the paperwork, a good agent will be ‘looking through the paperwork’ because paperwork tells another story.

With 3 months bank statements, you can see a range of things such as

• Do they have Direct Debits to pay bills (good sign)?
• Do they pay their current rent, is it on time?
• Do they have a mortgage?
• Do they have payday loans? How many payday loans do they have? (Bad sign)
• Do they have a gambling problem? Do they have a gaming problem?
• What are their habits? How much money do they spend on clothes?
• Are they paying their bills? (Insurance, energy, phone, etc…) (good signs)
• Do they get paid wages? Do they match their payslips?
• Do they have a savings account?

Bank statements are the best source of information on a person, you can literally see their lives nowadays since cash is less available.

A good agent should always be looking at this for you. If they’re not then they’re a good agent in my opinion.

Payslips too, you should be checking if they look real or forged, you would be shocked how common this is when renting in Romford, but bad tenants are ironed out in the pre-qualification stage, the meeting stage, and the paperwork – this defines your story.

Why do agents charge more?

The above is why. This takes time to do properly. It also takes experience and expertise too. You must do it wrong sometimes to evaluate your learned experience to turn it into wisdom.

Doing something for 10,000 hours they say makes you an expert if you are deliberately practising your art and this is the same with a good letting agency, provided the right staff, systems and training is there.

This is why letting agencies charge you more money than doing it yourself. It is the systems, formulas, and expertise.

However, there are a lot of landlords that pay the price but do not get the level of service and this is down to the landlord’s recruitment process of picking the right letting agent.

My number is 01708909100 and my email is [email protected] for anyone that wants any advice.

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