Dispelling the top five biggest letting agent myths
By Sophie Danes, Group Director of Property Management, Lomond
This year has seen the introduction of the seismic Renters’ Rights Act (RRA) as well as other changes affecting the private rented sector (PRS) coming into force, such as the rollout of Making Tax Digital (MTD).
As a result, more than ever before, there is a lot of information and speculation surrounding the sector making the headlines.
One thing that remains consistent throughout all the changes is the value that lettings agents provide through their guidance and expertise – however, there are still plenty of misconceptions surrounding the profession and its value.
Myth one: It’s cheaper for landlords to manage themselves
Every agent charges fees, and some landlords believe it’s not worth paying management fees and they can manage their investments themselves.
In reality, the biggest costs to landlords and investors are arrears, void periods, compliance failures and other costly mistakes – not management fees. Self-management is only cheaper when nothing goes wrong, which is never guaranteed. Think of it similarly to an insurance premium, you wouldn’t go without that for a holiday or your own home.
The best agencies provide added value that can’t be found elsewhere, with a focus on risk reduction, operational rigor and ultimately a service provision that ensures the invaluable peace of mind, not just protection.
Myth two: Finding tenants is the hard part
Nowadays, there are options for landlords to use services to help them find tenants, which many believe is the hard part. This couldn’t be further from the truth – move-in day is only the beginning, not the end.
Even if a tenant successfully passes their reference check, this does not guarantee they will be a good tenant. Whilst a reference check reduces risk, it cannot replace experience and judgement, and good tenant selection is more than just a report. Letting agents are able to dedicate time and knowledge to finding and vetting tenants, to ensure only trustworthy people are moving into your property. In addition, handling the tenant’s deposit correctly requires time and expertise and whilst provisions are in place to protect both the landlord and the tenant, it’s easier to know your property manager can handle this process for you in a matter of weeks, almost always avoiding the need for the Tenancy Deposit Scheme to adjudicate.
Good marketing moves tenants in, but proper management keeps tenancies working smoothly.
Myth three: All information lettings agents give can be found online
There are hundreds of pieces of legislation governing the letting and management of properties, and lettings agents will have expertise in all of these.
Although there are various online sources and websites for landlords and investors to go to for information, nothing beats bespoke, tailored advice and experience provided by a professional agent or property manager.
Our recent Quarterly Insights report found that the increased focus on compliance following the introduction of the RRA has prompted a notable shift in landlords opting to transition to a fully managed service to seek clarification on the changes, particularly in relation to how the reforms may affect their own specific properties and responsibilities.
Myth four: Letting agents don’t care about the properties as much as the owner
Caring about properties is hugely important in this industry, but systems, processes and expertise are also essential when helping prevent problems both for the landlord and the property. Be it through their trusted supplier relationships, round the clock systems or depth of experience, professional letting agents can manage risk and mitigate issues more effectively, making the investment into managed services worth every penny.
Myth five: Property management is about convenience
There’s a misconception that fully managed services are for busy landlords who do not have the time to deal with any tenant issues. However, managed services are about more than just convenience, they’re also an investment into protecting income, compliance and asset value. For example, the most expensive repairs usually start as cheap ones, and landlords cannot rely on tenants to tell them if something needs attention. A good agent will conduct inspections, regularly maintain contact with tenants and proactively manage the property in a way that troubleshoots issues earlier, giving a landlord welcome reassurance that potential problems are being stopped in their tracks and resolved.
In conclusion
Amongst all the recent changes, property continues to be one of the UK’s most dependable ways to build long-term wealth. Unlike many other investments, residential property can generate two sources of return: rental income, which provides ongoing cash flow, and capital appreciation, whereby a property’s value increases over time.
Property also offers advantages that many other asset classes cannot. Investors can use mortgage financing to amplify their purchasing power, own a tangible asset with direct control over its management, and benefit from rental income that often increases alongside inflation, helping to preserve and grow returns over the long term.
Working alongside a letting agent is an important part of this investment, helping landlords and investors protect their property investments by managing risk and keeping tenancies running as smoothly as possible.
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