Is it worth letting with a lettings agency?

Skag

I have a property (house) which I am renting to students for the last 3 years, via lettings agents. The reason is that I am working daytimes and don't have much time to deal with it myself, so I thought I'd select the LA option for two reasons:

1. Guarantee that I will be getting the rent each month into my account
2. Do all the paperwork (credit checks, guarantors etc) for me
3. Supervise the property

First LA was completely ignorant and didn't know the rates at all, hence

1. I was getting too little according to the rates of the area
2. Didn't draw an inventory and as a result he gave up the property without fixing minor damages (i.e. toilet lid, wardrobe shelves etc)

As I was a new landlord I didn't know any better at first, but then decided to switch to a LA which was closer to the property and seemed to have a much better grasp on student lettings, rates, and was more professional. I tried to chase the previous lettings manager but she was off for 2 weeks, then wouldn't return my calls, and eventually said "we left the property in professional standards, I don't know what you're talking about!". :mad:

The new landlord communicated very well, however he started undertaking works as cleaning (with my permission) because the property wasn't left to professional standards and I could verify it myself. Also, garbage collecting (extra $$$), I had to hire a gardener to take care of the garden etc.

Also, he started want to hire contractors for small works like light bulbs replacement, toilet seats, radiator valves, gas pilot light, toilet fans and so forth.

The result is as I've calculated so far, I've paid 1/3 to fixings and fees, also HMO and insurance, since September.
The property was in quite a good state, it's a house build in the 1960s.
Needless to say that all the properties need small fixes here and there all the time so the aforementioned shouldn't mean that the property was completely wrecked.

Now, I suppose many landlords out there have more or less the same experiences throughout England. My question is, is it worth at all letting with a LA, or would I be better off finding a couple of handymen to undertake all the works for me and go through the paperwork with the tenants on my own, including viewings etc.

CWSmith

I have a brilliant agent, so I am biased. Obviously there are good and bad ones out there, I guess it's just luck, unless you can draw on the experiences of other landlords in your area.

The only repairs I've had to pay for over the past 5 years are for one new washing machine, a new shower and for a cracked window to be replaced. I was consulted on every occasion as to how much I wanted to spend and as for the window and shower, the agency has their own "men" who charged very little!

G_M

It is nearly always cheaper to manage repairs/maintenace yourself, either by doing the work yourself, or by hiring your own contractors when you need to.

You can also make decisions more easily about what needs doing. (change lightbulb? What? £50 call-out charge for an electrician? :rotfl:- tell your tenants to change it themselves, or to pay the electrician fee!).

However, as you point out, this all takes time, you need to know what you are doing, and you need to be available.

So. You make a choice. Up to you!

But if you DO use an agent for management:
* choosing the right agent (not just the cheapest!) is critical. as important as getting the right tenants!
* making clear what your contract with them includes/excludes is critical. What do you expect them to do? Do you give them carte blanche on repais, or expect them to get your authorisation each time? etc

The other option is to use an agent to find the tenants, and credit reference them etc, but then to manage the property yourself.

More here.

spacey2012

Just be warned a few are pulling advanced fee scams on potential tenants.
the Scam works by charging hundreds of pounds in advanced fees to multiple prospective tenants and keeping the money for bogus rejection reasons.
The Trading standards and the council are prosecuting as advanced fees are illegal under the housing act .
As your agents you are jointly liable.
So select carefully and make sure they are not pulling the scam.

nollag2006

G_M wrote: »

The other option is to use an agent to find the tenants, and credit reference them etc, but then to manage the property yourself.

More here.

To maximize rents I always use a local EA on a Let and Collect basis, so they sort all the initial references etc and a good one can usually get a decent rate for you. Don't forget to build in an escalator into any multi-year tenancy.

For this to work, you will need to know a few decent local tradesmen to handle things like leaky shower, blocked drain, and broken washing machines: those were my three interventions in 2012 - none of them worth paying an extra 10% management fee for!

G_M

nollag2006 wrote: »

To maximize rents I always use a local EA on a Let and Collect basis, so they sort all the initial references etc and a good one can usually get a decent rate for you. Don't forget to build in an escalator into any multi-year tenancy.

Not sure what 'Let & Collect' means: sounds like tenant-find PLUS rent collection (but without full management). Seems pointless, as rent collection (standing order) is the easy bit.

And I bet if tenant falls into arrears they pass the buck back to the landlord!

thelem

Skag wrote: »

First LA was completely ignorant and didn't know the rates at all, hence

1. I was getting too little according to the rates of the area

Isn't that one of the things that you're paying for though? Are you sure they really didn't know the rates, and didn't deliberately underprice to make it easy to find a tenant?

What fees are they charging the tenants?

anselld

Unfortunately as you have found there is no such thing as "hands off" letting. You either need to spend time managing the property yourself or managing the agent! As GM mentions it is critical that you select the right agent and then manage your contract with them.

To an extent it also depends which Uni town you are in. In some Uni's the agents fairly much have the market sewn up. In others the University Accommodation office is predominant and the agents are virtually excluded. Some Uni's even manage private properties on behalf of owners. So you also need to know your market.

nollag2006

anselld wrote: »

Unfortunately as you have found there is no such thing as "hands off" letting. You either need to spend time managing the property yourself or managing the agent.

+1

Precisely the reason I use a Let & Collect service, rather than pay for a supposedly "Fully managed" service, which often ends up with me having to tell the EA which contractors to call out for specific incidents.

V_Chic_Chick

My own landlord of student HMOs has employed an agent for the first time this year to do the letting out only. They really have been more trouble than they're worth, and if they carry on like they did before Xmas, he's going to end up with a void next year.

Money for old rope, most of them are.