DUE DILIGENCE – QUESTIONS YOU SHOULD For the first part of our series on Due Diligence, we look at what questions you should ask your Letting Agent. However, you choose yours, albeit a household name, fancy logo or personal recommendation, remember that ignoring red flags because you want to see the good in people or want to short circuit the process will cost you later. Ask those all-important questions now! How safe is my money? Letting or property management agents, in England, who hold clients' money, must join a "client money protection scheme". This is important because it means that your money and your tenants' money is always protected! Agents must: Hold clients money in an account with a bank or building society authorised by the Financial Conduct Authority. Get a certificate confirming membership of the scheme and provide it to anyone who asks, free of charge. Display the certificate in any office where they deal with the public and on their website – there are large fines for non-compliance!
Ratio of properties/rooms available to people looking Top 5 local employers Different areas and the tenant types they attract Rentals in different parts of the city and how these have changed in recent times and what has affected them Any student/social housing areas and the effect this has on rents/crime/tenant turnaround Any Article 4 or Selective Licensing areas How do they select good quality tenants? One of the most important aspects of renting your property and somewhere that a good quality Agent can really add value, is tenant selection. Tenant selection is an art form and a good quality Letting Agent will have this process nailed! Once you have the science covered (in terms of right to rent, affordability, referencing etc.) then the art and experience comes into play and, a good Agent here, will be worth their weight in gold. Ask your Agent where they advertise to find good quality tenants, how they appraise them, who they speak with, to ascertain their character - this information is priceless and a good and experienced Letting Agent will happily share this information readily with you.
Show me the stats! Good, local, agents are experts in their field and should have area, tenant type, local employer, rental, and demographic specific information to hand, always and, the readiness of this information, will indicate whether they have their finger on the pulse or not. In addition to questions about their business (how many properties they manage, how many members of staff manage them, their void rate, their level of bad debt and how many full or partial deposits they have had to keep to offset damage caused by tenants or non-payment of rent), be sure to ask them for local information like: 20
