Becoming a Landlord

Blowdog

I have just purchased a 2 bedroom flat to rent out and was after some advice. The flat i have purchased is already rented out and the guy renting it would like to continue to do so through me once i gain ownership. I am not tied to the agent he is letting through but am thinking it might be a good idea to continue using them.

Any idea what sort of fee a letting agent should charge and what you actually get for the money?

BitterAndTwisted

There are different contracts for the different services the agents offer. Some entail them collecting the rent and deducting a percentage before they pay it over to you and other contracts which entail a full repairing service where they get you to authorise any repairs or maintenance, they organise it and pay the contractors and then they charge you an administration fee or percentage on top.

nick1977

Blowdog wrote: »

I have just purchased a 2 bedroom flat to rent out and was after some advice. The flat i have purchased is already rented out and the guy renting it would like to continue to do so through me once i gain ownership. I am not tied to the agent he is letting through but am thinking it might be a good idea to continue using them.

Any idea what sort of fee a letting agent should charge and what you actually get for the money?

Fees will generally be about 10-12% of the monthly rent, although all agents will differ slightly with what they offer.
If you get a good agent, they are worth their weight in gold. Mine charges me 10% pcm, and if anything needs doing they get local people to do the work which is at decent rates. They then just deduct it from the next months rent payment.
It save you the wory of having to deal with problems or having the tenant ring you with x and y isn't working etc. Currently my property is vacant as I am having an insurnace claim processed to repair damage to a leaking pipe. My agent is helpful enough to give the key to contractors (after my permission) and to check the property now and again - and this is for no money as I have no rental income atm!
Only thing to remember though is that ultimately it is still your responsibility as a landlord to ensure everything is covered legally, and if things go horribly wrong it is probably you that would end up in court not the agent!
I think for the peace of mind it offers you should have a managing agent, unless you or a close friend are very handy at sorting out home related problems. Remember for tax purposes the managment fee can be deducted as an expense also.

Hope this helps
Nick

mynameisdave

As a guide, I pay 10% for fully managed. I have seen some figures that say 15% + VAT.

Blowdog

Im capable of getting any problems with myself so dont need a fully managed package, rent collection only would be quite handy though! Also do any offer an insurance against a tenant not paying?

poppysarah

Blowdog wrote: »

Im capable of getting any problems with myself so dont need a fully managed package, rent collection only would be quite handy though! Also do any offer an insurance against a tenant not paying?

Did you research at all before buying?

mostlycheerful

“rent collection only would be quite handy though!”

A lot of efficient tenants can pay by standing order straight into your bank account and others will do a bank transfer over the net or phone. Or if you really want to for some reason you could have cheques posted to you or cash which is not necessarily much effort to pick up yourself. So what use would an agent be and why lose the 10%? That’s a lot to pay for something that you can easily do yourself, isn’t it. And it would just be putting a barrier between yourself and your money and slowing the process down all the time with days and even weeks if they're inefficient being added to every payment.