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Should you let and manage your property yourself ? Or should you get professionals to let and manage it ? Below we give the best letting property advice. But if your property is some distance away from you, then you should almost certainly use a letting agency !
If you do not live near to your Buy To Let property, or have no experience of property letting or property management, then it is probably better for you to use the services of a letting agent. Unfortunately their qualifications vary greatly, from professional to cowboy. If you are going to use the services of a letting and/or management agent it is advisable to choose an established agency that belongs to one of the main Associations - ARLA, ISVA, NAEA or RICS.
Some, but not all, estate agencies are also letting and management agents - so asking around local estate agencies will often give you a good letting agency or local letting properties advice.
Letting agents can vary. A good letting and management agent will be responsible for generally looking after your property and its tenanting. They should also know the area and probably be able to get your property reliably let and at a better rent than you could yourself.
They should vet prospective tenants for you and collect the rent and pay it to you. Many letting agents will not consider welfare or DSS tenants unless you have told them to - which may be necessary if your property is in a very poor location. They will also take care of your property inventory and state of repair, which will be checked again when a tenancy ends. And then they should prepare the property for the next tenants that they will find.
A good letting agent should also be an impartial agent between you and your tenants, and deal with some tenant issues and pass others on to you. And they will know letting law and deal with some of it for you.
A letting agency will generally charge between 8% and 15% of your rental income, and generally those charging more will do more for you. If they clean your property for a new letting, then they will also charge for that. Of course there will be some that will over-charge substantially, but all of your letting agent fees can be offset against your taxable profits.
Take care choosing a Letting Agent and closely read any contract before signing for one. There some bad ones that can,
- charge unreasonably high and non-agreed fees to you and to tenants.
- be poor at vetting prospective tenants, losing good ones or taking bad ones.
- may evict good tenants without your agreement.
PS. If you are thinking of letting your property yourself, then you could read Letting Homes USA. Or if you want to find a property letting and/or managing agent online then you could start with LandlordZone.
Note also that if you buy leasehold instead of freehold, as often if eg buying a flat, then the purchase price may be a bit lower but you cannot avoid some additional annual 'managing agent' costs from the leaseholder owner that can also be substantial.
And to get a real grip on the money issues, we really recommend our buy to let investment calculator !
IF you have access to a PC with Excel then see here for our very helpful Microsoft Office Excel Buy To Let profit calculator to cost your Buy To Let ideas at Buy To Let Profit Calculator.
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