Property Management Fees

wyliss

Does anybody know, on average, how a letting agent arrives at a figure to manage a rented property that a person owns?
Does it tend to be on a percentage basis and also what do then tend to cover.
I'm looking at a property being fully managed to include callouts, inspections and new tenants etc.
Thanks

sharpee

My Management Co. charged me 1 months rent for finding a Tenant, £120 for an Inventory and charge 10% of the rent per month for managing my property. When I looked around most LA charged similar prices

Fire_Fox

It is usually 10-15% and fully managed is not what it sounds like - really that is just fielding calls, they invariably charge extra for organising any repairs, renewing the AST, finding new tenants .... get written confirmation of the charges levied on both parties as sometimes letting agents will try to charge both for the sane service!! Also read your agreement thoroughly, many times we have had landlord's caught out by the small print.

adg1

Fire_Fox wrote: »

...fully managed is not what it sounds like - really that is just fielding calls, they invariably charge extra for organising any repairs

Thats not entirely true. Whilst I freely admit that a lot of agents add 'managed' services as an after thought and this will be pretty much what you end up with, there are others who put a huge emphasis on it and treat the managed service as a part of their business. They will use vetted, trusted contractors due to their buying power over a landlord alone and often get cheaper rates due to a volume of business they send through.

Meet the agents and you will be able to tell who has faith in their property management team and who doesn't. It will come accross very obviously in how much effort they take to tell you about it and the benefits to both you and your tenant.

Prices can very massively between agents and between areas.

For example, in London there are agents that will do a fully managed service for 15-17%. They have an entire division who's only role is to manage your property rental from move-in to move-out. They'll provide you with a single point of contact (your tenant too) to sort out any issues quickly.

There is also an agent in this area with about 18 branches whose property management team consists of 3 people in a 13' x 13' room and charges only slightly less than the ones mentioned above.

Which would you prefer? I'd rather the former.

Most agents will take a float from you so they can get an engineer out or sort a small issue quicly without any fuss. Larger things th ywould still contact you for permission butwill do all the leg work for quotes for you.

You need to shop around and meet the agents. Talk to them about property management and see what they offer. Bear in mind that the cheapest management fees will almost certainly not offer you the best management service.

You want an agent who talks about their management service as though it is a whole department alongside sales/lettings etc and not the one who offers it as an after thought and doesn't have properly trained staff.

At a guess for a cross-country fugure 10 - 15% is pretty good I'd say.

wyliss

Thanks people for all the info.
So, basically fully managed most of the time doesnt mean that?.
For example if a door handle falls off or a light switch is broken you would get charged labour and parts for those items?

Sammy85_2

We pay 12% on our "fully managed" property.

This covers having someone answer the phone when the tenant needs something and arranging appropriate trades for gas checks & repairs. It includes NOTHING ELSE.

You will still have to pay for any works that need doing, such as repairing door handle and light fittings.

Our agent automatically sorts out anything less than £100 (as we are often not contactable) and anything above £100 they wait for our approval. The bills for the work are then deducted from the rent before it is paid to us.

princessamy86

I have no idea how they arrived at it, as it's been the same for 16 years in the company I work for, however for comparison (North West of England):
12.5% for fully managed
Yes we have a separate management team
We have contractors as adg mentioned
We recommend to the landlord that they either manage their own float (if they prefer) or that we take a certain amount from each month's rent to use for any necessary repairs
Your 12.5% gets you an inspection every 3 months with a written report, an inventory at move in and move out, all tenant finding (including advertising as soon as current tenant gives notice to minimise void period), emergency call out number for the tenants and basically anything else necessary. The aim for us is to pay the rent money into your bank account every month and deal with everything else.
Obviously, large repairs need authorisation, but the management team have a chat with new landlords and get written authorisation for a level of repair spends the landlord is happy with.
We are the most expensive agent in the area, but I genuinely feel we offer the best service. It's possible to get fully managed for 9% if you go down the road, but we have landlords who've been with us for 10 years and more, and we get a lot of repeat business.

adg1

wyliss wrote: »

So, basically fully managed most of the time doesnt mean that?

It really depends on what the agent offers you. Some will have a far more comprehensive service than others. On top of simply answering the calls for you and sorting out little repairs some will transfer utilities to your new tenants, hold keys, arrange repairs and maintenance on your behalf (with your permission), 24 hour call outs for maintenance issues, inspections, check out process management and deposit advice to you.

Some will offer only be in a position to offer a call handling service.

Talk to your potential letting agents and see what you think of what they offer. As I mentioned before, you will pick up very fast whether they believe in the service their property management team offers or not in how they speak about it and the emphasis they place on it as a part of the overall package.

wyliss wrote: »

For example if a door handle falls off or a light switch is broken you would get charged labour and parts for those items?

Yes - they will either bill you or deduct it from the incoming rent. They will not pay for your repairs to be done.