Guaranteed rent through Company Let. How do we pay high street agent Letting fee?

silvercar

If this is as good as the companies make out, why not do it yourself? Find a letting agent experienced in HMOs and get them to do all the paperwork and manage the tenancies. That way all the profit is yours. Why would you want to give away some of the profit to another company?

SpiderLegs

cherrytree123 said:

@SpiderLegs We're still considering and haven't mentioned to our solicitors, many things still up in the air. The house has been on the market for 2 weeks and so far no families have come through... which might be kind of expected as we're on a main road (that's one reason we're moving, now with children we want to be in a more residential area). Are you also saying we shouldn't consider this 'guaranteed-rent' companies at all. If no families come through, would we be better off trying to run the HMO ourselves? We both work full time and with 3 children so would prefer not having to do that.

Ok so you’ve worked the numbers out that say letting is better for you than selling up, so what are the comparables between diy, fully managed and guaranteed-rent-shysters?

cherrytree123

Thank you @edddy! I checked the documents from the agent after reading your note and of course you're right 'Letting Only' fee is a one-off fee which is collected in total at the outset of the tenancy. MY BAD, I should have read properly rather than assuming 'Let only' is a monthly fee like 'Fully managed' just cheaper.

Happy now that it's a one-off fee, and yes it's about a month's rent. Thank you. We know the letting company will be paying £1995 (a month's rent) so do we have to pay about the same? ie. the agent would be getting double in this case? They are a reputable high-street agent.

cherrytree123

silvercar said:

If this is as good as the companies make out, why not do it yourself? Find a letting agent experienced in HMOs and get them to do all the paperwork and manage the tenancies. That way all the profit is yours. Why would you want to give away some of the profit to another company?

Yes we did find one online who offered either Guaranteed-rent or Management, we made an appointment last Monday but they never showed up. I'm going to follow up. There doesn't seem to be many of those companies covering our area..

cherrytree123

tom9980 said:

cherrytree123 said:

@SpiderLegs We're still considering and haven't mentioned to our solicitors, many things still up in the air. The house has been on the market for 2 weeks and so far no families have come through... which might be kind of expected as we're on a main road (that's one reason we're moving, now with children we want to be in a more residential area). Are you also saying we shouldn't consider this 'guaranteed-rent' companies at all. If no families come through, would we be better off trying to run the HMO ourselves? We both work full time and with 3 children so would prefer not having to do that.

Why are you trying to run a business when you seem to have done no research into said business? why are you not selling it and using the money for an onward purchase or investing in your pension? you really are going to get burnt either by this scenario or by a professional tenant who will think nothing of ripping you off. 

This is all new to us. Initially we thought we could just rent the house out 'fully managed' to a family, but as said so far we haven't got any families at all. It's only been 2 weeks though so maybe a nice family would come along. At the same time we're trying to find out more about HMO and guaranteed rent etc that's why I am here asking for advice

cherrytree123

cherrytree123 said:

silvercar said:

If this is as good as the companies make out, why not do it yourself? Find a letting agent experienced in HMOs and get them to do all the paperwork and manage the tenancies. That way all the profit is yours. Why would you want to give away some of the profit to another company?

Yes we did find one online who offered either Guaranteed-rent or Management, we made an appointment last Monday but they never showed up. I'm going to follow up. There doesn't seem to be many of those companies covering our area..

Just looked up this company on checkcompany and you guys are so right there is a lot of scams out there. Apparently the Director has had 3 similar companies in the past few years and keep dissolving them and starting a new one. So it was a good thing they never showed up for the appointment.. Thank you all so much. 

tom9980

cherrytree123 said:

cherrytree123 said:

silvercar said:

If this is as good as the companies make out, why not do it yourself? Find a letting agent experienced in HMOs and get them to do all the paperwork and manage the tenancies. That way all the profit is yours. Why would you want to give away some of the profit to another company?

Yes we did find one online who offered either Guaranteed-rent or Management, we made an appointment last Monday but they never showed up. I'm going to follow up. There doesn't seem to be many of those companies covering our area..

Just looked up this company on checkcompany and you guys are so right there is a lot of scams out there. Apparently the Director has had 3 similar companies in the past few years and keep dissolving them and starting a new one. So it was a good thing they never showed up for the appointment.. Thank you all so much. 

Well it was rather obvious....

I am surprised it has not attracted a family or two that tells me it's not suitable for those types of tenants. My hometown does not have much of a letting market on rightmove because the properties get let privately often by word of mouth before they even get listed online. At this point I would have expected at least 50 enquires and as many as 10 applications for my property.

please tell us more about why you are renting this property? Can you afford to make £10k repairs from savings or absorb a non paying tenant for a year? Have you ran the numbers for expected yields and compared with your pension provision?

cherrytree123

One family did request a viewing last Sunday but they cancelled an hour prior saying they didn't want to live on a busy road. This is a large beautiful family home if I may say so myself, but the wrong location :-( 

We do love this house (sentimental value) and don't want to sell it, at the same time we want to be in a more residential area and closer to schools (we've found our next home, just had our Homebuyers report done and all is moving along nicely). We also thought this would be a good investment but obviously we don't know much about investment. We don't have £10K spare cash so to speak but in that worst case scenario yes we can manage £10K (but with stress & headache). We haven't run the numbers for expected yields and compared with our pension provision.. 

[Deleted User]

Why don't you want to sell it?  One of the golden rules of letting property is not to let a property that you are sentimentally attached to especially if you intend to run it as a HMO. Is sentiment the only reason you want to keep hold of this property or does it make sense as an investment to let it and take the hit on the higher rate of SDLT for your next purchase?

Slithery

cherrytree123 said:

We do love this house (sentimental value). 

That's the worst reason to let out a property.

cherrytree123 said:

We haven't run the numbers for expected yields and compared with our pension provision.. 

You what? You mean you've decided to run a residential lettings business before running the numbers? I simply don't have the words...