Let only service rather than rent collection service

rfsk2010

I let my property through Haart estate agents. I pay 80 pounds for their rent collection service (7.2% of rent 1100). I don't think it's value of money at all . new tenants are moving in today and I told them that I need let only service and not rent collection service. They are saying that let only service is 8% of the annual rent which is 1056. Obviously this means I am better off keeping rent collection service but the fee for let only service seems outrageous. I know I am being taken for a ride , is there any thing I can do to avoid this ?

BitterAndTwisted

By "let-only service" do you mean tenant-finding fee?

What you should have done is to renegotiate your contract, or ended your contract with the agent BEFORE agreeing a new tenancy. Now, they have you over a barrel. Your own barrel

rfsk2010

BitterAndTwisted wrote: »

By "let-only service" do you mean tenant-finding fee?

What you should have done is to renegotiate your contract, or ended your contract with the agent BEFORE agreeing a new tenancy. Now, they have you over a barrel. Your own barrel

Yes let only service is tenant finding + setup contract and everything till the tenants move in

G_M

The time to sort this out was before you signed a contract with the agent. It sounds like you've already signed.

What are the cancellation terms?

Read:

Letting Agents (Tips for selecting, and tips for sacking them)

Paul_the_Painter

On the other hand, that is a pretty standard amount. 1 months rent for a tenant finding service. Of course you'll be in profit if they start longer than a year

whalster

OP you have just had a 60 watt lightbulb moment !

How about a. 100 watt moment and save all of your money including any finders fee!

rfsk2010

G_M wrote: »

The time to sort this out was before you signed a contract with the agent. It sounds like you've already signed.

What are the cancellation terms?

Read:

Letting Agents (Tips for selecting, and tips for sacking them)

Agent said i can go for let only but it will cost me more because the let only charge is 8% of annual rent. that sounds outrageous cost.

currently its costing me 7.2% for rent collection.

rfsk2010

Paul_the_Painter wrote: »

On the other hand, that is a pretty standard amount. 1 months rent for a tenant finding service. Of course you'll be in profit if they start longer than a year

Ok so if one month rent for tenant finding service is standard amount, then what i am paying for rent collection service is reasonable or even cheaper.

G_M

Time to find a new agent.

Or self-manage?

Read your contract.

Paul_the_Painter

Sorry for the delay,
You need to stop thinking about %age costs, and start thinking about £ costs.
If the agency find you a tenant who stays for 5 years you'll pay £80 X 12 X 5, so £4,800 on the £80/month. If with the same tenant you just pay the finding fee you'll pay £1056.

If the tenant stays 6 months:- you'll pay £480 for the rent collection, or £1056 for the finders fee.

Basically your calculation should be based on how long you think they'll stay, and how much effort you want to put into running your property. With the finders fee there is no one but you, so are you prepared for the phone call the day before you go on holiday from the tenant saying that the boiler has broken? If you can answer YES go with the finders fee and manage the property yourself, if NO pay them the £80 and have them worry about it (although you'll still be paying for the repair!)

jjlandlord

They can't bind you to using their collection service for ever anyway. They can tell you you need to take on the service for a minimum period, but after that you must be able to terminate it with reasonable notice.

Then in general there is the question of the value of a so-called 'rent collection service'.

What's the value?

If the tenant pays as planned: No value.

If he doesn't: It saves you a few phone calls and letters to the tenant, but you may start calling your agent to enquire about what is going on so it basically just saves you sending formal letters to the tenant.
Is that worth £80 a pop? I don't think so.

Bottom line: It is not worth it.

There are 2 services of value to a landlord:
- Marketing and finding a tenant,
- Managing the property.

Anything else is fluff/marketing/scamming to extract more money from you than you should pay.