Recommended fully managed rental company?

tallac

My dad has a property in London that he wants to rent out. However, he doesn't want any usual day to day hassle with tenants and odd things that need doing so he's keen to get a company to do a fully managed service. He also wants guaranteed rent for at least 12 months. If the tenants turn out to be idiots, then it could take up to 6 to 12 months to evict so not sure what the best way forward with this is. I've contact a local estate agent who has given various options but the whole thing seems very transparent in that the estate agent will receive money from the tenant, take some arbitrary amount off and then give the landlord a fixed amount each month. How much they take off the top is completely unknown, so it's not clear if what they are offering is a good deal or not.

Any suggestions on how not to get ripped off or if there's any good rental management companies that are worth sticking too?

[Deleted User]

I think companies offering guaranteed rent usually put in tenants on benefits so the most they'll pay is under the LHA rate.

Fully managed from someone like Winkworths seems to be pushing 20% even if nothing needs doing. Then further deductions for anything on top. I have no experience of this myself I've just looked at their T&C's.

Is the property particularly desirable?  I suspect that will definitely be a factor in the deal you can get.

AdrianC

Why does he want to do this?
If he's paying somebody ~15% for management, what will his net yield on the asset value be?

[Deleted User]

Presumably we are not talking here about a BTL landlord operating on wafer-thin margins.

These deals can make sense for property portfolio owners who are just looking for a steady 2%/pa return on their unmortgaged asset.

tallac

Poster_586329 said:

Presumably we are not talking here about a BTL landlord operating on wafer-thin margins.

These deals can make sense for property portfolio owners who are just looking for a steady 2%/pa return on their unmortgaged asset.

Yep, exactly this. Property is owned outright. My dad is getting old so he doesn't want the hassle, just wants a steady income stream but obviously as high as reasonably possible.

princeofpounds

That is not a normal arrangement. A more normal contract structure is that an agent will take a certain % of the rent and in return for that perform 'full' management services, with deductions for other expenses on top.

I say 'full' as almost no agents will actually do everything for you in all circumstances. For example, pursuing eviction proceedings if it ever comes to that, given that you mentioned them. At that stage, you engage legal assistance

So your dad really should educate himself on how to be a landlord in broad terms, if only to keep an eye on his agent. He should in particular pay attention to the legal requirements on a landlord (things like deposit protection, gas and electricity safety checks, how to rent booklets etc.), as he will get fined for breaking these, not his agent. Then tax is another area, there are some others. I'm sure someone will pop along with a handy guide to this shortly.

But if he finds a good agent they will be able to take away the vast bulk of the operational paperwork, manage the tenant etc. Just bear in mind that not all responsibilities can be truly delegated.

The structure you outline is more common in situations where the agent rents the property from you, then sub-lets it to a sub-tenant. This is often not such a good idea (although it has its place for some people) as you then have little control over what happens to the property or who is occupying it, and sometimes you have less inbuilt protection that you might compared to renting to a person (as it's a business-business contract, which is less regulated). That may not be exactly how this agreement is legally structured, but it seems similar in some respect.

As to the quality of various players - it varies even within the same firms to be honest. Some agency staff are switched on, some are not. The big corporate agents (more brands than you probably realise will actually be owned by one of them) will manage things out of a central call centre. They tend to be quite good on their basic processes but have a rather abstract knowledge of the property (because it's largely a computer record to them). A very local agent could give a very attentive service, but competency could vary.

When I was in London, I tended to have the best experience with the small chains because they actually knew the area and the branches were involved in managing the properties local to them, but they tended to have some level of corporate standards. 

AdrianC

Poster_586329 said:

Presumably we are not talking here about a BTL landlord operating on wafer-thin margins.

These deals can make sense for property portfolio owners who are just looking for a steady 2%/pa return on their unmortgaged asset.

Selling the asset and investing the equity elsewhere can produce at least as good a return, with less hassle and risk.

[Deleted User]

AdrianC said:

Poster_586329 said:

Presumably we are not talking here about a BTL landlord operating on wafer-thin margins.

These deals can make sense for property portfolio owners who are just looking for a steady 2%/pa return on their unmortgaged asset.

Selling the asset and investing the equity elsewhere can produce at least as good a return, with less hassle and risk.

Well, that's a wider issue. 

Someone wealthy likely already has a diverse portfolio, perhaps involving residential and commercial property, a business they've set up which takes up their day to day attention, and any investments and savings on top.   Having a few flats and houses as part of it all doesn't do any harm.  

Robroy79

I see Foxtons - and it depends on the individual not necessarily the firm. Foxtons corporate centre was really good but their ranch staff were useless and oddly knew less about deposit schemes, ASTs and so on that we did.

They do a complete arms length service if you’re based abroad but they do take 30%.

princeofpounds

Robroy79 said:

Foxtons corporate centre was really good but their ranch staff were useless and oddly knew less about deposit schemes, ASTs and so on that we did.

No idea about their central office but their branch staff are generally kids and they burn through them at a hell of a rate, so they probably don't have much time to build up expertise on anything much.