Estate agent fees landlord VS using open rent

Stella_85

We have decided to rent out our property whilst we resolve an issue with our absent freeholder after two sales falling through. We will be renting ourselves in the meantime due to lack of space and another baby due in august. 

We are completely green to the process but have a couple of friends who rent property via Open rent which they recommend. Although they are additional property for them and this is our home that we will need to sell after the freehold issue is resolved 🤞

the lettings agent came around on Monday evening from the estate agents that we were selling with and she sent her appraisal over yesterday, see images with fees in next post. 

These fees are so much higher than we anticipated, is this normal?  

We would use a let only service, would people recommend an agent over openrent?
thank you 

theartfullodger

Do you have permission to post those presumably copyright data please?

moneysavinghero

Tenants from hell tend to prefer finding properties on places like OpenRent as that don't have to get past the gatekeepers that are the Lettings Agents.

Stella_85

theartfullodger said:

Do you have permission to post those presumably copyright data please?

I had no idea I needed that? 

Rincewindcl

We used OpenRent for our current property. 4 years of nice direct contact with the Landlord. We are just going through our first house purchase, so will be ending this rent soon, but otherwise I'd recommend OpenRent over estate agencies with their fees every time!

[Deleted User]

Well, someone has to pay all the expenses incurred by the estate agency.  And since charging fees to tenants has been outlawed, it has to be the landlord.

Here in London 20% is not uncommon for a fully managed service.

Rincewindcl

moneysavinghero said:

Tenants from hell tend to prefer finding properties on places like OpenRent as that don't have to get past the gatekeepers that are the Lettings Agents.

As an alternative viewpoint, I would suggest that direct contact with a Landlord is much more valuable than using an EA as a go-between, which can often lead to problems for both parties.

GDB2222

Stella_85 said:

theartfullodger said:

Do you have permission to post those presumably copyright data please?

I had no idea I needed that? 

I very much doubt that you have a copyright problem. It's reasonable that you seek advice, and there was nothing confidential about the text you showed.

Moreover, the worst the estate agent could do is sue for damages, which as far as I can see are nil.

Turning to what they said, their charges are a bit higher than the estate agent that I use. 

I have used Openrent once before, and I found the system much better than an estate agent. I also preferred speaking to the prospective tenants myself. I have continued using the agent since then only because of the pandemic.  I have just re-let a flat purely by word of mouth!

Is the flat in London? Be aware that it may not be particularly easy to find a tenant. Possibly better to ask a slightly lowish rent than have a longish void period. 

Even though I like Openrent, being a landlord is now a highly complex business, and I suggest that you get someone experienced to do the management for you. 

poolboy

I do tenant find via an agent, works out 13% pa as the actual find fee is only half of it.  I live abroad so open rent is not an option, I did once try gumtree only to be spammed to death with offers of 50% asking rent, all bills included....i must have had 100 responses so asked the best 3 to come to view with I'd, nobody came.

Just do the sums 're switching to rental, you pick up a cgt liability pretty quickly if you have owned for a while.

If you are a newbie landlord the scammers will spot you a mile away and that 13% fee may suddenly seem q attractive.

lr1277

I agree with MoneySavingHero, and I was renting a flat I had never lived in so had little emotional attachment.
i don’t know openrent but years ago, I used Loot and I couldn’t take on a single tenant that came that route.
One prospective person wanted to move in with his girlfriend but didn’t want her on the tenancy agreement, so would have made getting her out very difficult. I can’t remember the other reasons but they were strong enough not for me  to let to them.
I agree, let the agent be your gatekeeper.
Finding a good agent can be hit or miss. I can’t remember the details, but one agent collected the deposit from a tenant before I had decided. She then had to tell prospective tenant, it wasn’t going ahead and return his deposit.
I did find one good agency, but then there was a change of management (and staff), and the behaviour of the staff to the current tenant became appalling, so much so, I dropped them as an agency. A few months later that agency had closed.

lr1277

As you say you are new to being a landlord, let me offer some further thoughts.
I don’t know how much your property is worth, but when you rent it out, you are lending the tenant the equivalent worth of your property. What checks would you perform lending somebody £1000’s?
What are going to do to ensure your tenants move out when you need them to? If they dig their heels in, it could be over a year before the bailiff gets them out with a court order. During that time they may not be paying rent. So not only can you not sell, but you have no money coming in.
Why expect the tenants to treat the property the way you would? If they agree to leave, the place might be a mess or damaged during showings. If they leave because of a bailiff, you may need to repair or redecorate before putting the property on the market.
If anything needs repair, do you have funds to pay for contractors to come in and do the work? Or are you qualified to do the work? Especially for electrical work. Or you get insurance type policies  where tradesmen will be sent to make any fixes. Be careful though. My parents are homeowners and we’re payin British Gas for such a policy. The hot water stopped working in February but because my parents had an immersion heater so had hot water, BG made them a low priority. After repeated cancellations by BG, a gas engineer came out last week to do the fix.
Don’t expect the tenant to wait for the tradesman to arrive and make the fix. You will have go to the property, wait for the tradesman and make sure the fix is up to your standard.
Whilst the following is unlikely, I will mention it anyway. As a landlord you are responsible for the deposit, even if the scheme you put it in doesn’t pay out.
If you have a mortgage on your property, ensure you have consent to let from your mortgage provider.
And as mentioned above there will be tax issues. You will need to submit a self-assessment return for your rental income. You may have to pay some CGT within a month of the sale. So get your property valued before the start of the tenancy. Then the CGT can be calculated from the difference between that valuation and the actual selling price. By valuation, I mean written valuation by a sales agent (or more than 1 sales agent). You may need to pay for these valuations.
Do you need permission from your landlord/freeholder to rent out the property? My property was leased from a leasee. So I needed to get approval from my landlord for each tenant, including bank, employer and previous landlord references for the tenant.
I always found it useful to get a check-in report by an inventory agent, for which I paid. You get the tenant to pay for the check out report by the same inventory agent. To do this you put a clause in the tenancy agreement. Then you compare reports and decide on how much of the deposit to return. Also get the place professionally cleaned before the tenant moves in. In the tenancy agreement say the tenant has to pay for a professional clean before they move out. The inventory clerk will check the place has been professionally cleaned.
In terms of tenancy agreements, get one from the agency and amend it to your requirements. As I mentioned above, I had a good agent and used their tenancy agreement for some subsequent letting seven if they didn’t find the tenant. That was until I got an agreement from an agency that built in yearly rent raises based on CPI or RPI. This was because the tenant wanted a 3 year contract as they were a student.
I believe the law says the tenant is allowed quiet enjoyment of their property and as landlord you need to help with that.
Some thought for you to consider.
HTH.