How to find the perfect tenants
BY Ned Browne
1st Jan 2015 Property
If you are one of the millions of Buy To Let landlords you’ll probably face this dilemma on a reasonably regular basis, and it can be an expensive problem. This article aims to help you cut one of the biggest costs, estate agent fees.
How much do estate agents cost?
Typically estate agents charge between 8 and 15 per cent. The former would be their “finder’s fee” and the latter to fully manage the property. These figures do not include VAT.
So, were an estate agent to fully manage a property that was let for £24,000 per annum, their fees would total £4,320 a year. That’s a lot of money. Oh, and most agents charge a renewal fee. So if you manage the property well they share the benefits, despite not contributing.
Cutting out the middle man
Most estate agents find their tenants online through property portals such as Zoopla and Rightmove. However, anyone can list their property on those websites.
The way you do this via an online letting agent. A quick Google search will throw up loads of options. One such website is The Online Letting Agents—their basic package costs £59 + VAT and includes:
- Your property being advertised on over 450 property websites (including Rightmove, Zoopla, Prime Location, Find a Property and Gumtree). It claims “until let” but the small print clarifies they actually mean “for three months”
- The filtering of tenant enquiries and only forwarding those that have passed their initial checks
- A “comprehensive tenant reference report”. Although included in the fee, the tenants are expected to pick up the £99 (inc. VAT) tab
- A bespoke Assured Shorthold Tenancy (AST) contract
The online letting agents offer various packages. It’s worth shopping around for the one that matches your particular needs.
Other ways to find tenants
If you are in no rush, it’s definitely worth sending out a Tweet or email or simply posting on Facebook. There’s constant churn in the rental market. You never know who might be looking to rent a property.
You could also consider DSS (Department of Social Security) tenants. But, buyer beware, this is a higher risk option.
The downsides
Obviously, you’ll end up with some upfront work: taking the photos and writing a description. Think of it like online dating: you need to present your property in the best possible light.
You’ll also need to show potential tenants around the property and you’ll need to ensure any deposit is held in line with the Tenancy Deposit Scheme.
There are online providers that can help here too, most notably the official Tenancy Deposit Scheme. You should also draft a detailed inventory.
The upside
The obvious upside is the cash saving, but there are some less obvious benefits too: getting to meet your tenants in advance gives you a chance to weigh things up.
Quite frankly, estate agents care less about your property than you do. You’re far more likely to ensure you get the right tenants.
Meeting them also humanises you as a landlord, which will, hopefully, encourage them to look after the property.
Time makes money
Learning the tricks of the trade is surprisingly easy. It’ll probably take you a few days.
Over the lifetime of the property that will almost certainly be the best-paid work you ever undertake.
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