Know worth of your managing agent
PRESSURE One of the biggest growth areas in the real estate industry is management of rental property on behalf of landlords — despite the fact that buy-to-let investments now only account for about 7% of property purchases, from 25% in 2004.
“The main reason is that owners as well as tenants have come under increasing financial pressure in the past two years, and simply cannot afford to risk rental defaults,” says Berry Everitt, CEO of the Chas Everitt International property group.
Writing in the Property Signposts newsletter, Everitt notes the demand for expert help in managing rental properties is set to grow even more. However, there are some important things for owners to check:
Ensuring that the agent is registered with the Estate Agency Affairs Board and has a trust account for holding tenant deposits;
Ensuring that the agent has or is working towards an NQF4 or NQF5 qualification by the end of 2011, when these will become essential for an agent to practice legally;
Ensuring that the agent has proper systems in place to check on the creditworthiness of prospective tenants;
Ensuring that the agent will not hand over keys to the property until the deposit and first month’s rent have been paid; and
Ensuring that there is a clear, written contract detailing what services the agent will provide in return for his or her fee.