London letting agents - fully managed service or just find a tenant?

[Deleted User]

Hi all, 
I am going to rent out my London property and the letting agent I met with yesterday has offered two options. The first is where they market the property, manage viewings and find a tenant which would involve keeping 8% commission of the annual rent. The second is where they do the same and also fully manage the property e.g. dealing with day to day issues identified by the tenant etc. for 15% commission which seems a bit steep compared with other countries. My property is new build and so I would like to think that issues with the property should be few and far between. With that in mind, would I be best managing the property myself (I am based in the UK although likely moving outside of London) using sites like taskrabbit to arrange for any repairs to be fixed? Or should I take the fully managed option? When I was a tenant myself, I used to inform the landlord when something needed fixed and he would then leave me to arrange it and then reimburse me after I sent him a receipt. This worked well as I could arrange for things to be done while I was home. 

In terms of contract length, they have suggested a 2 year contract with a break clause after 12 months. After doing some research it seems that they do this in order to maintain their commission in the second year which would just be a straight forward contract renewal - in other words, relatively easy money for them. Should I insist on 12 months or agree to their 2 years with the break clause after 12 months? I assume they will have an exclusivity clause preventing the tenant from having a contract directly with myself after a 12 month contract ends?

Thanks in advance!

Stubod

I suppose it depends how much you want to be "hands on", and also what type of tenant you get?

Unless you are reasonably close it would make sense to go fully managed anyway. (NB 15% sounds a bit steep to me, should be 10%?).

It does not sound like a good idea to rely on your tenant to organise any repairs and you pay them back, (IMHO). Also this is something they may not be prepared or capable of doing?

When we first started to rent out a property we went with a "fully managed" service from a local Estate Agent (10%). This worked well as they set up all the original contacts and advertised for a tenant. A couple of years on when we got to know the tenant (and they turned out to be reliable), we ditched the agency which saved 10% which we now save to cover any expenses and also means we don't need to increase the rent.

MaryNB

I've been struggling to get people out to do work on my house (everyone seems to have gone DIY crazy during lockdown). My friend is a letting agent and has a list of reliable tradespeople so I've been get contact details from her. They've already tried and tested many many contractors. 

If I was renting out from abroad having a letting agent handle that aspect would be a huge bonus. Unless you have go to tradespeople in the UK.

[Deleted User]

Stubod said:

I suppose it depends how much you want to be "hands on", and also what type of tenant you get?

Unless you are reasonably close it would make sense to go fully managed anyway. (NB 15% sounds a bit steep to me, should be 10%?).

It does not sound like a good idea to rely on your tenant to organise any repairs and you pay them back, (IMHO). Also this is something they may not be prepared or capable of doing?

When we first started to rent out a property we went with a "fully managed" service from a local Estate Agent (10%). This worked well as they set up all the original contacts and advertised for a tenant. A couple of years on when we got to know the tenant (and they turned out to be reliable), we ditched the agency which saved 10% which we now save to cover any expenses and also means we don't need to increase the rent.

Is the 10% for fully managed via a London letting agent or in another part of the UK? I did read that London agents are more expensive. They have just come back and said 12% for fully managed is the lowest they can go. They did say I can give them three months notice and switch to managing it myself and so I may go fully managed for the first 6 months and if no major issues arise switch to self managed. I would imagine most issues are identified during the moving and settling in process. It is new build and so the risk of things going wrong due to wear & tear are reduced. 

[Deleted User]

Winkworths charge landlords 19% for fully managed here in South London, by way of comparison.  (I'm a tenant but do look at agency websites).

Slithery

Saint4805 said:
I would imagine most issues are identified during the moving and settling in process.

Surely the older things get the more chance there is for issues?

Stubod

We are not London based and I had not realised that London agents charge a higher percentage.

(Not sure why they should as I would assume the rental value (and hence their income) would therefore be significantly higher anyway?)

Maxwell008

Poster_586329 said:

Winkworths charge landlords 19% for fully managed here in South London, by way of comparison.  (I'm a tenant but do look at agency websites).

John Payne south east London charge 15.6% for fully managed property's,
however the are lots of less known agents charging between 8% - 12%.
If you have time and energy do it all yourself.