Dear Anita,

For a novice investor, you are very wise to recognise that it is just as important to vet a letting agent as it is to vet tenants correctly.

Our favourite letting agent, Adam Powell of C-Sense Lettings in North London has kindly responded as follows:

The Role of a Letting and Management Agent in developing a successful and profitable Buy-to-Let property portfolio.

Adam says:

Most letting agencies around the country charge a percentage of the annual rental income for their services, but this can be both deceptive, and disadvantageous to landlords:

- If your property is at the lower end of the local market in terms of rent, an agency is more likely to spend time on those properties at the higher end of the market, as the level of work needed to rent any property is pretty much the same from an agencies point of view.
- Many agencies that charge a low percentage will have hidden costs designed to extract more money from you. These often include additional charges for tenancy agreements, inventories, inspection reports, percentages of any work done on the property…

In general, a low percentage fee will equal a low level of service. You will need to decide what level of service you require and how much of your annual rental income you are prepared to spend to obtain said levels.

You should always seek estimates from a number of agencies, and I would recommend about five, in order to compare services and pricing.

Things to consider in an agent before requesting a rental appraisal:

1. Are they local to the area?
2. What regulatory bodies do they belong to?
3. Are they a letting agent only? As the sale of property generally provides higher income, and so full estate agents may concentrate their efforts on sales instead of lettings. It is also common practice in full estate agents to assign lettings to new and junior staff members, to train them up until they can move into the sales side of the business.
4. Have a look at their website (If they don’t have one, I would strongly advise you not to bother using them, as recent polls have indicated that 98% of all potential tenants use the internet to search for a rental property before “hitting the street”.) Have they rented similar properties to yours recently in regard to location and price?
5. Is their office in a prominent location that will attract the type of tenant you hope to find?
6. Where do they advertise? They should belong to at least one or even two of the major property portals, such as Rightmove, Findaproperty, Propertyfinder, Primelocation, Hotproperty.

Having satisfied yourself as to the suitability of a number of agents, and booked in rental appraisals, you now need to consider the services a good agency should provide:

1. Advice and consultation

The agent should be prepared to meet you at your property, at a time convenient to you, to discuss achievable rent and advise on any measures that might be needed to get a good quality tenant quickly.

- Beware agencies that give a too low or too high estimated rental figure. Too low means they are not on top of their game in your area, too high means they are hungry for the business, and will likely mean that your property will remain empty for a longer period, when they will then suggest reducing the price to that estimated by the majority of other agents.
- Does the agent’s representative show respect for you and your property? Such as turning up on time, removing shoes on entering the property, and emphasising the positive aspects of the property such as parking space, balcony, security aspects.
- What type of tenants do they see renting the property? Professional couples, individuals, families? And what can you do to entice them further?

2. Marketing

Where do they advertise, both on-line, and in local media?
Do they provide floor-plans? (Check the price!)

3. Viewings

All viewings should be accompanied, and by appointment only. If an existing tenant is in situ, they should be given at least 24 hours notice prior to any viewing.

- Will they give you an update on how viewings have gone? If so, how often? You shouldn’t have to chase them for feedback.
- Remember, the number of viewings is an irrelevance. It is the quality that is important. More than 10 viewings without an offer means something isn’t right in either price or the marketing of the property (A property advertised as “quiet” but set on a main road will make applicants feel misled, and unlikely to want the property, even if it does fit their criteria). It may also mean that there is something fundamentally not right with the property. Feedback from viewings will help identify if this is a problem, and the agent should be able to provide you with a cost-effective solution to any obstacle.

4. Offers

All offers received must be legally advised to the landlord. Do not be tempted to take the first offer if you have any doubts about the suitability of the tenant or the offer made. Know the value of your property in the market-place!

If you have the choice of four Italian waiters sharing your two bed apartment, or two female trainee lawyers sharing the apartment, it would be prudent to go for the latter option as there will be potentially far less wear and tear on your property.

In considering whether to accept an offer, whether for the full asking price or not, you should consider the following:

- Will they be moving in straight away? The least void period the better.

Example: Your property is on the market at £200 per week. You receive an offer of £200 per week, but the tenant can’t move in for 4 weeks. An offer of £190 per week, where the tenant can move within one week, will mean you will receive £570 more initially for your property than the first offer. This means that it would take 57 weeks for you to receive the same amount of income from the first offer as you would for the second.

- Who are the tenants? What do they do for a living? How old are they? Will they respect your property? Will they be able to pay the rent each month?

- Do they require any furniture to be provided for the tenancy?

We at Csense Limited offer a furniture pack for landlords, and your local agent may be prepared to do the same. You should always bear in mind the time involved in organising furnishings for a property, which can include trips to a number of stores and a lot of aggravation!
Make sure that the providers of the furniture pack don’t add a commission onto the price of the goods, and that they will organise the building/installation of all items, and clean up the debris afterwards!

- Bear in mind that it may be harder to find tenants at certain times of the year such as just before Christmas and during the Summer holidays.

5. Deposits

Following a recent change in the law, all tenancy deposits must be placed into either the Governmental custodial scheme, or a Government approved scheme provider.

I would recommend taking six weeks rent as a deposit at the least. If this is a problem for your prospective tenants, then they are likely to struggle to pay the rent, and this also solves the problem of tenants not paying the last months rent of their tenancy.

6. References

An agent should obtain as much information as possible on any prospective tenant of your property. This information should include a reference from; a relative or previous landlord, an employer (Preferably tenant should be under contracted employment and have been at the company for over 3 months – probationary period!), their bank or sight of 3 months bank statements, sight of 3 months payslips (Generally, as long as their take home pay is over 150% of the monthly rent, there shouldn’t be a problem with paying the rent), and a form of photographic identification.

7. Tenancy agreement

The agent should provide an Assured Shorthold Tenancy Agreement, which complies with all current legal requirements for tenancies.

8. Rent Collection

The agent will collect the rent on your behalf, and chase up any delays in payments by the tenants. They should also be able to assist in advising of the procedure required following defaulted payments.

- Do they provide a written statement of account each month?
- How quickly will they undertake to transfer the monies from their account to yours?

9. Inventory

The agent should be able to provide an inventory service – essential in a furnished property, and should take meter readings on your behalf on the day the tenants move into the property. They should also advise the utility companies/council on your behalf, in order to provide a final bill for the landlord.

- It is a good idea to perform a pre-check out inventory on your property. This involves looking over the property, after receipt of notice to vacate has been received, and advising the tenants of what they will need to do in order to get their full deposit returned. This can save an awful lot of time and aggravation later.

10. Your New Home

The agent should take the tenants around the property on moving in day and show them how all the items in the property work, and where stopcocks are located in emergencies. They should also be able to provide contact numbers for utility companies/local council, in order that tenants can advise of their new occupation of the property.

11. Landlords outgoings

The agent should be able to arrange for payment of items such as service charge, water rates and insurance on the landlords behalf, at landlord’s request.

12. Repairs and emergencies

Minor repairs (less than £200) should be dealt with by the agent through their list of local tradesman.

For major works (Over £200) the agent must obtain quotations for the work for your perusal. They should get at least three quotes for this type of work.

The agent should provide you with copies of receipts for all work undertaken on your property and you should keep these for your tax records.

When a tenant moves out, you should be prepared to pay to bring the property back up to scratch – such as light bulbs, downlighters, and any other remedial work. You should also have the property professionally cleaned, the cost of which you can deduct from the outgoing tenant’s deposit (provide receipts). It is important to keep your property in excellent condition to achieve the maximum rent. If you neglect your property, you enter into a downward spiral whereby you have difficulty getting tenants, and keeping them. A happy tenant in a well maintained property will most likely stay longer.

Budget for a “facelift” every 3 – 5 years to keep your property up to the mark.

- What is the Agent`s policy for dealing with emergencies? Do they have a 24 hour phone number?

13. Inspections

A good letting agent will inspect the property at least 4 times a year. Ask for a report following each inspection, as these are great for maintaining the quality of the property, and mean that small problems can be dealt with before they become large ones!

14. Notices

The agency should be able to assist you in the issuing of notices to vacate the property, and advise of receipt of any notice to vacate sent by the tenants.

15. Legislation

The agency should keep up-to-date with any legal changes that might affect the landlord, and advise how this might affect you.

Essentially, a good letting agent should ensure your property is never empty, take over the majority of the responsibility of looking after your property, and come to you with solutions – not problems.

This level of service leaves you free to get on with the tasks of research, financing and negotiation of the purchase of your next property.


Adam Powell
Managing Director,
Csense Limited