Buy-to-Let: Finding Your Tenant

For the first time investor, it is sometimes a requirement of the lender to engage a professional lettings agent for the initial tenancy.

When engaging an agent, it is important to ensure that they are regulated to ARLA or an equivalent professional body.

An agent may be engaged in two ways: as a tenant finder, or as a property manager.

A tenant finder engagement will advertise the property, and will find and install a suitable tenant. They should follow a process as laid down by ARLA which will involve credit checks, personal references and verifying employment details. They may charge up to one month’s rent for this service.

A full management service will undertake the tenant finding exercise and remain as the tenants’ point of contact throughout their tenancy. They will collect the rent, attend to general repairs, maintenance and resolve other day to day issues. They will also undertake periodic inspections of the property. After an initial charge, monthly charges will normally be made as a percentage of the monthly rent, typically 10 – 15%.

For an additional charge it is also well worth asking the agent to compile an inventory of contents for signing by the tenant upon moving in which may then be referenced when the tenant vacates.

An alternative to engaging an agent is to self manage. There are many advantages and disadvantages of doing this. It is well worth considering, though only do so if you are willing to wear both a landlord ‘hat’ and an investor ‘hat’.