Property is an excellent investment especially as part of a retirement plan but a decision must be made as to whether to accept the services of property rental agents.
Many people find that they are in a position of letting out a property but to build up a good residual income, to provide for freedom from employment or a comfortable early retirement, generally requires at least three properties. This will depend on size and quality of the properties but it will usually be necessary to build a significant portfolio.
Each of these properties will need looking after and so to achieve freedom from the stress, and time requirements of running the business, will require the services of property rental agents. It is good to note that the agent's fee is often negotiable to an acceptable level.
Property Rental Agent Services
The agents will take away the pressure of the business by performing the following tasks:
Advise on Preparation and Legal Requirements of the Rental Property
The property agents will know what needs to be done to the property to bring it up to an acceptable standard. Some of them can be very strict as they know what will bring in the highest rent and so may request the highest level of decoration and maintenance.
The rental agents will know the local requirements for inspection of energy supply efficiency and safety certification. They will be able to suggest any changes that need to be made and recommend a local inspector.
Act as Agent for Finding a Tenant
Most property letting agents will have a network of contacts to find tenants and advise on the rental income that can be expected for the type of property and its location. Advertising alone is often not sufficient for a high end property.
An agent will have a network that will extend out to potential tenants and into organisations such as big business and the military. If they have a high reputation then a landlord can often benefit from a top rent and a stable tenant.
Help the Tenant Move into the Property
The tenant will find every help in moving in to the property as it is in the agent's interest to ensure this can happen with ease. The landlord will usually only have responsibility for leaving before the agreed date and ensuring the property is cleaned to a high standard.
Collect the Rent
The agents will be able to collect the rent at the agreed interval and will handle any dispute in the payment . They simply deduct their fee and credit the landlords chosen account. This service is particularly useful if the owner is living abroad.
Manage the Tax for the Rental Income
The property agents will know the local tax regulations and can often pay that proportion of the rental income directly to the tax office. They can handle the regulations for the region or country such as described by the US IRS Real Property small business document and the UK DirectGov Tax on Property Rental Income site.
Be the First Point of Call for any Problems with the Property
It will often be difficult for the property owner to be available when things go wrong and so it can be extremely useful to have someone on hand especially for emergencies with water; electricity and gas supplies.
Most contracts with property agents include an agreement of a budget at which small repairs can be made without consulting the owner. In such cases as a water leak or equipment failure then the repair can happen much more quickly and the cost taken out of the rent.
Inform of any Issues that Affect Future Rental
Long term tenants are by far the best tenants and so making sure that they are happy in the property is an important task which will benefit both the agent and the owner.
When setting out on the first private rental property it may be hard to give up a portion of the rental income, but property letting agents can be worth every penny that they charge. It is hard to put a cost on the freedom for the owner that these agent's services make possible.
Resource: Inland Revenue Service - Residential Rental Property
Related article: Choosing Your Rental Agent
Dave Corby - Dave Corby is Director of Engineering Software for a large American inspection company.
Join the Conversation