How to find a good rental agent, to take the stress out of managing your investment property.
Regardless of how many properties you own, renting out a home is a business and should always be approached as such. Most investors use a rental agent to manage their rental portfolio and while it may not be absolutely necessary, a good rental agent will take away a lot of the stress.
So, what does a rental agent do and perhaps more importantly, what remains the landlord’s responsibility?
Firstly, a good rental agent will conduct thorough background and credit checks on potential tenants. They will also check any references to ensure the person has a good track record as a tenant. Depending of the type of agreement, they will also hold deposits and collect rental payments and will conduct property inspections with incoming and/or outgoing tenants. If the property is owned by an absentee landlord, the agent may also be responsible for ensuring that any maintenance issues are dealt with and as such will have built up a solid team of reliable, qualified people such as plumbers and electricians.
It's important to remember that although a landlord may delegate certain responsibilities to an agent, this doesn't mean that he can absolve himself of all responsibly for the property. Basically, the buck stops with the landlord. Let's for example say that the landlord employs an agent to find and manage a tenant. However, the agent concerned isn't registered with the Estate Agency Affairs Board (EAAB), doesn't have a current Fidelity Fund certificate and doesn't place the money in a trust account. He then does a duck and takes off with the tenant’s deposit. The person who enlisted the services of the estate agent (in this instance the property owner) would be responsible for reimbursing the tenant.
The other aspect that many landlords often don't consider is safety. Yes, you can and probably will employ people to maintain your rental property, but there is a strong likelihood that you would be held responsible if something were to go wrong if you used, for example, unqualified people for electrical work. It is the owner of the property’s responsibility to ensure that the electrics on a property are up to standard and any major electrical work carried out on a property must be signed off by a qualified electrician.
The same could be said for using a qualified plumber. Although legally speaking there is no law that states that a qualified plumber has to oversee major repairs, it would be perfectly understandable if a tenant were to sue a landlord because shoddy workmanship led to flooding which damaged his goods.
Employing the right rental agent who in turn employs the right workmen for the right job is probably going to end up saving the landlord a fortune. Replacing a tenant costs money and there is, of course, the risk that the wrong tenant may slip through the cracks and move in. Likewise, shoddy workmanship is going to have to be rectified at some stage and it's often more expensive to correct mistakes than it is to have the job done properly the first time around.