If you are new to property investing and maybe are just buying your first buy to let property, you may be thinking about handing the entire business of finding tenants over to a letting agent. After all, that is what they are there for, right?

Never give your business to the first letting agent you come across. All agents will probably ask you to sign an agreement with them before doing anything on your behalf and this will set out the fee you can expect to pay for them finding you a tenant. This fee can vary massively from agent to agent! Compare prices before you sign anything and don’t forget that VAT will be added on top.

Make sure you read the small print of the agreement with regard to renewals. If your tenants want to stay longer than the 6 month’s tenancy in the original agreement (TIP – always opt for 6 months NOT 12 months) will you then have to pay the letting agent fees again?

Some unscrupulous letting agents will only be interested in getting tenants into your property and claiming their fee, without any regard to the type of tenants they are providing you with. Check what references they require from your prospective tenants and how they verify them. For example do they follow up a written reference from an employer with a telephone call to check that it is genuine?

If you rely on a letting agent to obtain references for you, at least you should make sure that they are doing this efficiently and following up thoroughly. Failure to do this could result in a costly mistake of bad tenants who are late or non-payers and are difficult to remove.