What's in it for LL to manage a property through an agency rather than directly?

zas31

I know the agency plays games with me, but equally they don't act in LL's interests (there are examples).

1. Wouldn't the LL be better off by signing a contract directly with me? The property is relatively new, and there are very few things that did go wrong or could go wrong -- both in terms of structure or equipment, and I'm not a trouble-maker. Assume the LL does not own too many other properties to let. What's the typical uplift for a LL of going directly, i.e.:

2. What's the typical property management cost by an aggressive agency?

3. Are there any common covenants that may prevent the LL signing a new contract with the existing tenant?

Currently on a "conditional S21".

Cheeky_Monkey

I don't mean to be rude but I don't see that it's any of your business why the LL pays an agency to manage his/her property!

zas31

Cheeky_Monkey wrote: »

I don't mean to be rude but I don't see that it's any of your business why the LL pays an agency to manage his/her property!

Then just don't be and post a useful response instead, ok?

The point being if the LL wanted to be aggressive in the weak market they could keep the management fees and immediately realise their 15%-odd uplift. And concentrate on being happy instead.

girl_withno_name

Maybe they do have a lot of other properties, maybe they don't know whether tenants will be troublemakers, maybe things could (and will) go wrong...

The bottom line is that the LL has probably considered the cost-benefit balance and determined that this is the best option for them, with various elements (including the hassle of managing the tenant, the maintenance issues, the drawing up of the contract, etc.) being qualitative in nature and having different levels of importance to different landlords.

zas31

girl_withno_name wrote: »

The bottom line is that the LL has probably considered the cost-benefit balance and determined that this is the best option for them, with various elements (including the hassle of managing the tenant, the maintenance issues, the drawing up of the contract, etc.) being qualitative in nature and having different levels of importance to different landlords.

You assume a rational behaviour. How often would you say it is exhibited by the investors? Think European periphery.

So, the questions from the OP still stand. Plus: how does the LL know they are not being milked by the agency? Consider a well-known agency (can't do names here) who advertise the properties well above market and as a result they remain vacant for months?

girl_withno_name

zas31 wrote: »

You assume a rational behaviour.

This is a common assumption in market and investment theories.

You can assume people don't act rationally, but this then makes their behaviour and choices completely unpredictable and very difficult to analysis or explain - they could choose to pay £1 for a 1p coin for example...

Cheeky_Monkey

zas31 wrote: »

Then just don't be and post a useful response instead, ok?

The point being if the LL wanted to be aggressive in the weak market they could keep the management fees and immediately realise their 15%-odd uplift. And concentrate on being happy instead.

I stand by what I said, whether you like it or not.

As the tenant, how the LL manages their financial affairs has got nothing whatsoever to do with you!

G_M

zas31 wrote: »

I know the agency plays games with me, but equally they don't act in LL's interests (there are examples).

1. Wouldn't the LL be better off by signing a contract directly with me? The property is relatively new, and there are very few things that did go wrong or could go wrong -- both in terms of structure or equipment, and I'm not a trouble-maker. Assume the LL does not own too many other properties to let. What's the typical uplift for a LL of going directly, i.e.:

2. What's the typical property management cost by an aggressive agency?

3. Are there any common covenants that may prevent the LL signing a new contract with the existing tenant?

Currently on a "conditional S21".

1)
a) LL may be overseas or not live locally to the property
b) LL may be busy - have no desire/time to receive phonecalls from tenant ("the boiler's stoppoed woring")and deal wih them
c) LL may be new - have little understanding of LL/tenant law and require expert help
d) etc

2) management fees vary from 8% - 15%

3) All tenancy agreements are between the LL and tenant. The agent simply signs 'on behalf of' the LL
However the LL also has a contract with the agent (pay him to act on his behalf) which may be for a specified period of ime or require notce to end (just as your tenancy agreement requires Notice etc to end)

zas31

Cheeky_Monkey wrote: »

As the tenant, how the LL manages their financial affairs has got nothing whatsoever to do with you!

I respect your opinion, but it's not relevant to the point of the OP.

Thrugelmir

zas31 wrote: »

Consider a well-known agency (can't do names here) who advertise the properties well above market and as a result they remain vacant for months?

An agent represents and follows their clients instructions.

Why a LL makes a given choice or decision is entirely down to their own personal preference, reasoning or circumstances.

So your LL may not wish to deal with rent negotiation directly. preferring to pay an agency fee to handle the business aspects. Which I suspect is the direction of your enquiry.

Tenants can be equally aggressive as letting agents. That's human nature.

zas31

Thank you G_M for the answers.