We live in a world where information is literally at our fingertips and any question you have will no doubt be answered by the search engine giants. There is no doubt that increased access to information has encouraged more people to invest in the property market but should you use a letting agent or go private to maximise your buy to let returns?
Know your market
If you use a local letting agent they will know a lot more about the local market than you could ever hope to. They will likely have been around for many years with strong contacts across the industry and mix in circles where alarm bells are rung to help each other. We have seen situations in the past where a “bad tenant” has been looking for property in a particular area, moving from landlord to landlord. If there is evidence that they are potential trouble you will find in many cases that the local rental community is aware. This can save you a fortune in the long term!
Negotiating the best deal
Pretty much in tandem with “know your market” it goes without saying that all new tenants will attempt to get the best deal with as many extras as they can. They will try to play-off private landlords against each other, play hardball where they feel there is a whiff of desperation but using a letting agent often brings a level headed approach to the discussions. Your letting agent will be able to advise you of the current state of the market, short to medium term prospects and whether indeed you might be right to “sweeten” a deal.
References and background data
Those buy to let investors who “go it alone” with regards to finding tenants for their properties are unlikely to have access to the same amount of information as a letting agency. Agents will be able to gather financial statements, personal information and credit scores for individuals. In some cases they will also find it easier to obtain valid references and root out those which are suspicious. References and background data should form the basis of any landlord/tenant arrangement so it is imperative this initial information is correct and as in-depth as possible.
If you have equity in an asset it can be very difficult to control your emotions and remain detached. There is obviously a balance between being detached and actively involved but at some point human nature might be your weakness. Letting agents they come across as cold and calculated but they work on figures, on percentages and on investment returns. They are obviously human and will go through the emotions but would they allow their emotions to cloud their judgement?
Investing in boxes
It may sound harsh but if you view all of your investments as “boxes” with nothing in then, there is no need for you to get emotionally involved. In the case of a buy to let investment, passing over day-to-day control to a letting agent allows you to focus on your strengths. When it comes to buying and selling “boxes” it is simply a financial calculation as opposed to buying and selling properties with which you may have an emotional attachment. While many people deal on “gut feeling” this is very different to emotion and many of us will be well aware that to become emotionally involved in any investment is dangerous.