We received a call today from a Landlord and it’s the type of conversation that raises questions about them more than about us, a professional letting agent.
“What are your fees?”
An important question of course, but this was all he asked. He didn’t ask about our service level, how we reference prospective tenants, whether we were members of a professional body. It was all about money – and how cheap we were.
If a Landlord invests a large amount of money in purchasing a property, why would he want to pass it onto a cheap agent? Does using a cheap agent, whilst obviously saving money initially, guarantee that they will find him a suitable tenant?
Being too cheap raises many questions. Will the agent find just anyone? Are they referencing them correctly? I’ve experienced the “they’ll do” attitude when a Landlord calls back in a few months time with massive rent arrears and a problem with regaining possession of the property. The cheap agent doesn’t know how to serve a section 21 notice, or if one has been served it hasn’t been correctly. Sometimes, the tenant has a guarantor but the original agent hasn’t referenced them and the guarantor won’t pay because they can’t afford it. The property has been trashed but the inventory is sub standard and useless when claiming. How much money could the Landlord have saved if he hadn’t cut corners initially, paid a little extra and instructed a competent agent in the first place?
A Landlord should be asking whether the agent provides regular management visits, and how often? Will they get an independent inventory or an “in house” one? An “in house” one is useless when presented as evidence to a court because it’s deemed biased. What questions are asked when the tenants are referenced? Can I see a copy of the tenancy agreement? Is there a rent guarantee product available or included? Is the agent a member of the Property Ombudsman or a professional organisation such as ARLA? Do they have Client Money Protection insurance? What legal certificates and insurances should I have in place?
If none of these questions are asked and the Landlord isn’t thorough, what does that say about them? Are they inexperienced or care free? Being inexperienced isn’t a problem and a good agent can guide them through the process. An experienced Landlord should have everything in place and understand the importance of the answers to the above questions, but if they are that detached from their property and carefree - are they going to be a responsible Landlord? Would you want to rent a house from them? Is the property safe?
Google the meaning of the old cliché “You get what you pay for” and you will find;
“If you do not pay much money for something, it is probably of poor quality; if you pay well for something, it is more likely to be of good quality”
If I had a large investment in property, I know which option I'd choose.