Pop quiz: When is a buy-to-let property less profitable than an ISA or investing?
Answer: When it’s empty.
Once the deal is done and you’ve got your property sorted, finding tenants should be your top priority.
There’s no shortage of places to find tenants, but this quick guide is designed to give you an idea of the positives and negatives associated with using some of the most popular methods.
The most traditional way to find tenants is to sign up with a local letting agent. Your property then goes up in their window so passers-by and tourists – let’s be honest, we all have a look at property prices when on holiday – can check it out.
Being able to put a face to who you’re dealing with is a positive but, unfortunately, this is the most expensive way to find tenants. Well, I guess those slick branded company cars most estate agents have don’t come cheap.
With fees of 10-15% and up, it’s no surprise that more and more landlords are looking for alternative ways to find tenants.
Much to the annoyance of net savvy landlords, it’s not possible to list a property on either of these sites yourself. To get on Zoopla and Rightmove you have two choices:
- Use a high street agent, most of whom list their properties on both sites
- Find an online letting agent to act as a middleman
Online letting agents, in essence, charge you to list your property on Zoopla and Rightmove then send you the tenant leads they receive. This will cost you around £50 and it’s not a bad move if you don’t want to deal with a high street agent.
Safety is key online so you need to make sure the online letting agent you choose to deal with is reputable – look for testimonials or positive reviews online to avoid getting ripped off, and verify that your property appears on all the sites you’ve paid for.
If you’re looking to save money, listing your property on sites like Gumtree and Craigslist might be a good idea. Anyone can list for free on these sites without the need to go through an online letting agent.
The downside? Because anyone can post, and reply to, listings you really need to do your due diligence where these sites are concerned. Gumtree and Craigslist have a bit of a reputation when it comes to scams, albeit more with work from home jobs and dodgy electrical goods, as they don’t have as many security measures in place as eBay.
Getting tired of me banging on about personal recommendations yet? I know it seems like I mention them every other post, but they really are worth their weight in gold when it comes to letting property.
Mixing business with pleasure isn’t always a good idea, but if a friend or family member vouches for a potential tenant I’d put them above a stranger on my list. Just remember, a personal recommendation doesn’t mean you can skip the usual research and paperwork…
Where you find tenants really depends on how much you want to do. Having a letting agent do all the work can be costly, but takes away the stress you might experience if you choose to do it yourself. There’s no right or wrong way to do it and, unfortunately, there’s no way to guarantee a dream tenant either.