Beware of the ‘Accidental’ Letting Agent says Teresa Galley

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The last year can only be described as positive for property investors and buy to let landlords. With the availability of finance in short supply leading to a fall in house prices, many landlords and property investors that Galley Properties speak to, are increasing the size of their portfolios. If they haven’t bought more property recently then a large amount intend to in the near future as they see their bargaining position strengthened with vendors that are not achieving viewings/interest in the present climate.

This in turn is having a knock-on effect with Estate Agents, as the average Agent see’s the number of house sales per month still on the decline with no end in sight. The absence of means or desire to buy has led to some agents looking to counteract their losses in the sales market by diversifying into the rental market.

So as there’s been a rise in ‘accidental landlords’, (property owners whose first option would be to sell their property), the market is seeing a worrying number of ‘accidental letting agents’.

On a positive note, it could be seen that this offers the landlord more choice of letting and management agencies.

But the landlord needs to tread carefully. Many of these ‘accidental agents’ have little or no experience of this market and are attracting landlords with ‘too good to be true’ agent fees, only to later close down and in some cases defraud their clients.

Landlords need to be aware that there is usually a correlation between service levels and price and always be wary of the agent that tries to compete on price only. With a thriving market comes an increased number of people wanting to cash in and get rich quick. So perhaps the first question a landlord should ask their agent is, ‘how long has the agent been managing/ renting properties on behalf of landlords?’ If new to the market, (ie the last year or so), then what experience do they have of the industry. Renting property is highly regulated in this country and ignorance of these regulations can cost a landlord dearly.

In order to make the best decision, ask that all the services are explained clearly and the cost for each service is explained thoroughly. Some agents have been accused of having ‘hidden traps’ of substantial additional fees in their small print.

Ask to see evidence of how quickly on average the agent has found tenants in your area. Insist on the full details of how these tenants are verified and what checks have taken place.

How does the agent market their properties? Are they on all the major property portals including Rightmove, Property Finder and Zoopla etc or do they just rely on a ‘to Let’ board.

Are they a member of any trade bodies for example TPO, (The Property Ombudsman – though ensure they are registered for lettings specifically), NLA, ARLA etc that have professional codes of conduct.

And finally perhaps the best barometer of all – ask if you can see testimonials of actual existing landlords/tenants. Don’t be fobbed off with PR quotes that can’t be credited to an actual person.

Remember that buy to let is not as easy as reports would suggest, so instructing an Agent that you can trust will reap dividends in the long run.