There are two types of landlords: landlords who rent their properties independently and those who rely on leasing agents. On the other hand, there are landlords considering making the switch; making your mind up between renting independently or engaging a letting agency can be challenging; so we thought it would be helpful to outline both sides’ pros and cons as well as any possible disadvantages that lie between.
Someone else will deal with the rules
There are over 400 regulations and rules to abide by when renting out your home for rental, and any violations could result in fines up to P30,000. Hiring an experienced letting agent means handing off this task of making sure your house meets their criteria, relieving you of worry if anything goes amiss – plus no fines could arise from mistakes on their part!
No late night phone calls
Many tenants view renting as advantageous because it allows them to quickly contact someone to fix issues such as leaky roofs, broken boilers and dampness issues when something goes wrong in your home. When something occurs that requires immediate attention they’ll call even at 2 AM in order to address it with you directly.
Letting agents will handle these calls on your behalf, freeing you of the stress associated with calling boiler companies when on holiday or attending a wedding if one of your tenants experiences an incident of break-in.
They’ll do all the checks
Letting agents typically employ a thorough screening process when screening prospective tenants, not simply accepting as fact that the prospective tenant is tidy, clean, and can pay rent promptly. That means it’s less likely that you’ll end up with someone living in your house who slobbers all over it or fails to pay rent promptly.
They’re a buffer between you and the tenant
Your circumstances may require that you get rid of someone as part of your plan to sell the property or they are no longer suitable tenants, such as calling their landlord every three days and leaving behind an unpleasant mess that requires you to retain some portion of their deposit. An agent for letting can act on your behalf in discussions with the landlord directly without you needing to have to interact directly. In theory, this way you can reap all the advantages associated with renting without dealing with its hassles yourself.
Now for the cons…
You have to give them some of the rent
As a landlord, managing your own home allows you to keep all of the rent collected each month, thus increasing your profits. Most letting agents will charge 10%-15% of rent collected for an all-inclusive management service as part of an annual renewal contract tenancy agreement; additionally there may be fees charged by finding tenants and renewing contracts annually; so if renting two bedroom house costs PS750 per month with full managed services this would cost around PS18,30 for fees for letting.
There can be other fees, too
Your money should always be carefully considered; otherwise letting agents could end up costing more in terms of expulsion of tenants from premises and repairs to facilities that don’t include this provision in their contracts; in such cases, extra charges could apply and will likely affect you directly.
There are horror stories
There have been instances in which tenants paid rent to letting agents and the agents did not pass it along to landlords for various reasons, including fraudsters or financial difficulties that prevented them from paying out rent to landlords. It may happen rarely but if it does it can be difficult to recover your cash so be wary when selecting a leasing agent; check their credibility thoroughly by investigating their length of business tenure, rate rating and ability to speak directly to one of their landlords regarding quality of service they have received and time period they were hired by landlords?
Let agents are not required to obtain a license before practicing, meaning there’s no official means of measuring their quality of work.
They’re a buffer between you and the tenant
We have employed this strategy successfully, yet there can be disadvantages as well. If there’s an issue between you and a tenant that requires relaying through an agent to resolve, this may make things harder than they need to be solved. You could also become disinclined to visit those living there, which could prove harmful in the long run – knowing who lives there is essential!