Letting a house - do it myself or use an agent?

[SurreyGuy]

I own (have a mortgage on) my own home and am considering letting it and then renting a smaller property for myself.

Is it advisable to try and let my house myself by means of an advert/internet, etc or am I best using an agent?

If I choose to do it myself, what's the best way to get a rental agreement/contract agreed/drawn up?

If I choose to use and agent, what sort of fee will I be paying? I'm just about to phone some agents, but thought I'd ask this on here anyway.

[Scarlett]

I would always say use an agent. If you shop around you can get a fee from 10% to around 20%. Try and knock them down to 9% if you can, say it's not worth your while otherwise. They desperately need your business at the moment since houses aren't selling, so rentals keep them going.

By using an estate agent you save all the day to day hassle of tenants problems and potential issues of non-payment. Some estate agents will give you a 12 month rent guarantee, and most will get you references and a guarantor so your house is safe and the rent is paid. They also know what to do re. legal stuff if there is a problem and you need to evict the tenants.

Work out your mortgage and add 10% (fee) on top. That is what you would need to charge in rent. Is that competitive with the locality and other similar houses in the area? If not, it won't rent! Remember you will also be paying buildings insurance every month and you will have to insure the basic contents if there are any- curtains, carpets etc, unless the deposit covers these.

If you advertise your house yourself on the internet or by making posters etc and sending them to large businesses or schools to put on their staff room board, you can do the viewings yourself and then send the interested party to the estate agent to do the legal stuff. This way you save paying the estate agent the fee for finding a tenant, as you have done that yourself!

I'm in the process of renting mine out at the moment, in order to move into a smaller rented place.You can also go with more than one estate agent if you like but do read the small print on the contract they give you. It is usually no let, no fee, and sometimes they may want to be the sole agent for the first 4 weeks.

Good luck!

[redcrx]

just to add to the above, make sure that you ask your mortgage company as they will have to approve of you renting it out. They may refuse, may charge you a higher interest fee or may just say yes.

You will also need to notify your insurers that it is being rented out too.

[SurreyGuy]

Thanks folks

[alan30]

I would only consider using an agent initially to find and check out a tenant. Management after that by an agent is throwing money away. As a tenant I generally have seen the agent once in any one year and I know the landlords have been paying something like �100 a month for that privilege. My daughter has rented her house out through a nationally known agency and they have done very little for the money. She assumed that for general repairs they would have access to local contractors etc but she ended up having to instruct them to find a contractor for washing machine repairs and paying the call out fee. She had assumed an agent would at least put enough business out with contractors to avoid the call out fee. The contractor made the access arrangements with the tenants so my daughter may as well have done everything herself and saved herself the monthly fee. She is currently changing to managing the property herself and the agency have charged her �400 to get out of the agreement and are now constantly telling her how difficult she will find it. Her response has been how difficult will it be to pick up the phone and find a contractor? There may be issues if tenant fails to pay rent etc but as they have been good tenants for over 18 months she is prepared to take the risk and put the saved fee to one side for now.

[SurreyGuy]

Thanks for the advice - I'll be wary who I "employ" folllowing that one.

[Clanad]

Understanably, laws differ from country to country. But, here in the U.S., if the mortgage was obtained for a residence and not commercial use, one cannot, legally, rent out their home. The laws are quite explicit on living in the homestead as it's defined here. Just a thought to keep you out of trouble in case laws and regulations in the U.K. happen to be similar...

[SurreyGuy]

Thanks

[mandimoo]

ive just rented my house out after moving in with boyfriend. i would defo recommend using an agent initially. you can get a feel for things then. yes, there will be some fees but your rent should reimburse that quite quickly. then if you decide to go it alone in the future, all power to ya. do you know that you should also declare the income to the tax man? (somehow.... i aint had to do that yet, im not sure how it works). finally, i pay 12% for a 'fully managed' service.

[SurreyGuy]

Thanks.

If I use an agent at the start, how do I "go it alone" later?

[Scarlett]

You simply tell the estate agent you won't be needing their services anymore. Check- they may say you have to stay with them for x months. Then the tenants can stay in there as normal or you can do your own advertising and managing. It just means you don't pay the estate agent 10% of their rent anymore- you get to keep it! But with that also comes the risk of them being hideous, and the phone calls when they have problems with everything!

[wildwood]

Also check your insurance. I am pretty sure you'll be paying more if you rent it out.

[carrust]

I've worked on many rental properties over the years, & have witnessed the aftermath of so called 'good tenants'!

I would suggest the following;
1. If you go through an agency, insist that the agent does a monthly inspection.
2. Don't let-out to students, especially medical ones!
3. Don't let to friends.
4.Make sure the last months rent is paid! Don't let the tenant use the bond to cover this.
5. Make an inventory, & take photos of every room.
6. When the tenant leaves, make sure the house is inspected.
7. Make sure the garden's well tended...you don't want to fall-out with your neighbours!

I hope this helps...good luck...

[SurreyGuy]

Thanks for all those answers.

However, I'm still at a loss as to how I can "go it alone" - that just seems to be something that I can't imagine an agent letting me do (having introduced the tenants to me) without me incurring a lot of expense!

[Im a BusyBee]

we have rented 2 houses out for many years, initally just paying an agent to find, checkout and set up the tennants then managing them ourselves. more recently been doing the whole thing ourselves but we have now decided to take the responsibility away from us to have them totally managed. As it happens they are both empty at the moment and we have found an agent who charges �200 initially and 8% a month which we feel is reasonable. And yes you can pay them to find and set up then do it yourself.

[SurreyGuy]

So how far into the "relationship" can I ditch the agent?

So I have to weigh up paying an agent to manage any hassle with tenants against doing it myself for free.

[icemaiden]

Be very careful and always read the contract very carefully between you and the agent .

We have great people in our flat and they keep the place spotless, we would love to now go it alone but the agency have put a clause in the contract saying that all the time these tennants are in our flat, we cannot terminate the contract. So in effect, the tennants belong to them.

Crafty.

[SurreyGuy]

Thanks icemaiden - that's the kind of thing that was in my head when I aid that I didn't understand how I could "go it alone".