Flat average national rental growth rates, paired with increasing numbers of high-risk tenants and tenants in default, have led many landlords to question whether the cost of using a rental agent is worth the convenience and security.
It can be tough to justify extra costs on an investment when that investment isn’t delivering the growth that landlords are used to, says Jacqui Savage, national rental manager for the Rawson Property Group.
“Ironically, these tight economic times are when rental agents can be worth their weight in gold.”
Today’s tenants are far more assertive when negotiating the rent and are willing to fight for every cent they will need to hand over. This means having an experienced agent on their side, who comes equipped with negotiation skills and up-to-date market statistics, means landlords are unlikely to accept less than the going market rate in rent.
“Having access to a rental agent’s network and tenant pool also means you’re likely to place a tenant faster. In combination, those two factors alone can literally save you thousands and go a long way towards covering the cost of that agent’s services.”
Also, professional incoming, interim and outgoing inspections are far more successful at ensuring any damages are covered by the tenant in full. However, Savage says saving money and netting the best return on an investment is far from the only benefit of using a rental agent in a tough economic climate.
This makes it imperative that landlords adhere to every aspect of the regulations, not only in terms of paperwork but also in fulfilling their ongoing responsibilities over the lease term.
For the layperson, navigating these legal ins and outs can be difficult, and uncertainty can lead to over or under-compensating for any issues that tenants might raise. Savage says a rental agent is able to streamline and mediate this process where necessary in order to minimise costs and keep everyone on the right side of the law.
“As times get tighter, the number of high-risk tenants has been on the rise,” she says, citing the Q1 2019 PayProp Rental Index which placed 40% of tenants in “high risk” or “very high risk” categories.
“The stringent background checks that professional rental agents use to vet tenants make use of a combination of cutting-edge technology and years of experience that a private individual would find impossible to replicate. The result is a far more accurate assessment of a tenant’s risk profile and a dramatic reduction in the likelihood of signing a high-risk tenant.”
Ultimately, the risks of not using a rental agent in today’s economic climate are “just too high to justify”, says Savage.
“The time, stress and money they can save you - and their ability to protect the value of your investment so that it’s ready to deliver on its full potential when the market recovers - far outweigh the cost of their services.”