Letting Agent Find A Tenant Fee

carpediemspirit

Hi All,

I am thinking of letting out my flat and wanted to know what roughly is a fair % of annual rent a letting agent charges for finding a tenant ?

What else do they normally charge the LL for ?

any help would be appreciated.

Werdnal

carpediemspirit wrote: »

Hi All,

I am thinking of letting out my flat and wanted to know what roughly is a fair % of annual rent a letting agent charges for finding a tenant ?

What else do they normally charge the LL for ?

any help would be appreciated.

There is no set ballpark figure as agents are not regulated and can charge what they like. Ring around a few local agents and ask what they charge, as it will vary from agent to agent, area to area. Some offer "tenant find only", which usually includes marketing the property, credit checking and referencing tenant, providing tenancy agreement and arranging to take first months rent and deposit before passing on everything else to you. Others will run the whole thing for you, taking anything from 10%+ of your rent each month. Choose your agent wisely though, as there are no minimum qualifications required - anyone can set up as an agent, and you only need to read some of the threads here to see how badly they can get it wrong and you will be carrying the emotional and financial cost of their !!!!-ups! Try to find someone ARLA registered, so you have some comeback if the worst happens, and don't be afraid to ask them for a reference of LLs they already work for, so you can check their level of service!

If you are new to letting there is much you need to know, and using an agent does not reduce the legal implications and requirements of being a LL. A good starting point is here:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

As its a flat, assuming its leasehold, are you allowed to let it?

Other costs to be aware of:

Mortgage - have you asked for consent to let - higher charges and maybe a set-up fee, but lender can also refuse.
Insurance - must be changed to a LL based policy, normal household cover is invalid.
GSC - Annual Gas safety check required by law if you have gas appliances.
EPC - legally required to give this to tenant, agent may offer to do this for you, but ring around for quotes, should be about £40 and valid for 10 years.

Have you also got a good contingency fund of spare cash, as you need to be able to quickly carry out repairs, cover lost rent if tenants stop paying or you have voids in letting. Are you able to cover mortgage, plus your own living expenses if your tenants stop paying for any reason?

You also need to declare your rental income for tax.

AlexMac

..."what roughly is a fair % of annual rent a letting agent charges for finding a tenant ? What else do they normally charge the LL for ?"

In my last six or more letting experiences over 15 years via agents I've been charged a sum roughly equivalent to a month's rent; £600-800, for the initial set up (finding a tenant, checking employer/past landlord/bank/credit refs, collecting and protecting the deposit, setting up a Direct Debit to collect future rents and issuing the Assured Shorthold Tenancy agreement). An inventory (more desirable since the intro of the TDP scheme) was a further £50-70, but this was incredibly detailed.

This seems reasonable value as it's tax-offsettable, gets me off on the right foot and sets a businesslike tone for the relationship with the tenant, and when on one occasion a prospective tenant failed the checks, the agent handled the potentially embarrassing rejection and found another for me.

Thereafter I manage the let myself to save the 10% ongoing fee which otherwise typically applies. This includes monitoring rent payments and a prompt response through trusted builders or plumbers to any maintenance or repairs problems, as well as the obligatory annual Gase Safety certification.

But as many other posts have said, given experience or confidence, you can even do this whole initial finding and AST set-up yourself, including reference and credit checks.