How to choose a letting agent to manage your property portfolio
One of the key ingredients of successful property investment is ensuring you have a network of good people and reliable suppliers around you.
If you ever want to systemise, scale, leverage and ultimately achieve the best results from property, then you will be need to source and create a team of people that you can call upon regularly, including letting agents.
You can get away with not using letting agents and instead choose to self-manage your own properties, but I would recommend against this, from both personal experience and from working with many investors.
Good versus Bad
A good letting agent can actually speed up your learning curve if you’re relatively new to property investment, and they will also cut out your mistakes, save you heaps of time, and take away the hassles and worries that tenants can cause – the kind that keep investors awake at night.
But bad letting agents can cost you lost rent and leave you spending more time managing the agents – and paying them for the pleasure – than you would have done managing the properties yourself.
I’ve been involved in property for more that ten years now but when I first started out, I knew very little, and without letting agents I would have made several mistakes that would have seriously undermined my portfolio growth.
The temptation to self manage can seem like an option that saves a few pounds, but penny pinching really can be pound wasting in the long run.
What you should look for in a letting agent...
Letting agents don’t come in a one size fits all mould. Look on your high street and you will see a mix of national brands, regional agents and smaller independent agents with just one branch.
Deciding which one is the best to choose really depends on your strategy, your target tenant profile and where your target area is, but my personal preference is the smaller agents.
I like to be able to deal one-on-one with the owners, because they still have a real passion for growing their business and they usually work much harder getting you the right tenants and deal with any issues much quicker.
Where possible, you should also go for a letting agent that has direct and specialist experience of your target market, whether that's family lets, houses of multiple occupation (HMOs), students, working tenants or housing benefits.
This can really help you get the best results, reduce your voids and increase your returns.
How far away from your target area are they?
I know lots of agents that manage properties out of their ‘usual’ area because they have portfolio landlords, and so they manage their whole portfolio for them.
This does offer some advantages as a landlord (in terms of one point of contact and easier admin) but where possible I like my letting agents to be based in or near the area of each property.
The thinking for this is really down to leveraging their local knowledge, because this cuts down your risk significantly of getting bad tenants.
All of the agents I now use have come from recommendations. They manage properties for other landlords I know, who have already tried them out, tested them, and put them through their paces and they’ve passed with flying colours.
I’ve relied on word-of-mouth, but you can use associations or regulated bodies, such as:
Ideally you want to narrow it down to no more than three agents that have specific experience of your target tenant profile, which you can then arrange a face-to-face meeting with to see if they’re the right fit for you.
If you use letting agents the right way, they can and should save you time and ultimately allow you to make more money in the process. It doesn’t matter whether you’re ‘cash rich & time poor’ or ‘time rich & cash poor’; establishing your own team of trusted partners is one of the best ways to take your property investment career to the next level.
*This article was written by Robert Jones, a Manchester-based property investor and director of Property Investments UK