letting agents fees

downshifted

We are planning on letting our house and have been quoted £1400 per month as a likely achieved rent. The agency wants £150 set up, followed by 12.5% fully managed. They will charge 9% if we deal with tenant hassles ourselves and they do everything else including finding and vetting tenants and ending the tenancy.

Two questions please, if anyone can help

1) Are these reasonable fees for a well known quality chain?

2) Where does VAT come into this?

We are new to this, so thanks for any advice

Downshifted

moneysavinmonkey

1) why not get quotes from a couple other agencies?
2) Have you asked the agency if that is including VAT or not?

Fred1_2

These sound like normal LA fees if they include VAT. If they're exc VAT, they're atrocious.

I hate Letting Agents with a vengance, they take your money for nothing and also rip off your tenants, charging them 1 week's rent plus VAT for "admin". Actual costs of that admin are less than £50 and I'm being generous.

If you go with a letting agent, be prepared for a long rental void before you find a tenant - thay can't market themselves out of a paper bag. Also, do you really want to rely on someone else's decision of who should rent your house? With a letting agent it's not uncommon for landlords and tenants never to meet, so thre's plenty of potential for misunderstandings. If LL and tenant can get to know each other, there tends to be more common sense on both sides.

If you're happy with the £1400 that the LA quoted, why not advertise it ijn your local newspaper at £1300 pcm (your tenant saves £100 pcm and you save £75 pcm). The cheaper rent and the lack of "admin" fees should me that you are inundated with calls and can pick and choose your tenant.

Do some reading up first and ideally speak to local landlords (ones who you'd be happy for your kids / granny to rent from). Do you have a good relationship with a CORGI installer, certified elelctrician, plumber and builder? You'll need these because even in the best maintained house problems will occur and you need to be able to get them sorted fast.Make sure your house and the way you manage it is not only perfectly legal, but actually above the normal standard. That way, you attract and retain good tenants who pay their rent, don't cause any damage, don't annoy the neighbours and want to stay a long time.

Don't go into this lightly - you are providing someone with a home,. that is one big responsibility to undertake.

Good luck.

silvercar

Personally I would go with an agent first time around. A professional tenant will look for new landlords through private ads, you may find its money well spent.

moneysavinmonkey

and by professional tenant silvercar does not mean a doctor/lawyer!

clutton_2

one of the properties i manage has just had the now ex-tenant found guilty of possession of a kilogram of controlled substances with intent to supply

i had to get the bailiffs to get her out and she then told housing benefit that she had left two weeks earlier - guess what - HB don't want to pay the HB up until the actual evicition day as " the tenant has told us when she left and accept that" - oh right - they would rather believe a drug dealer than a professional landlady of 10 years who deals with them every week ...........

She probably has more money stashed away than i have even seen !!!!!

mmmm

my most heartfelt advice is = please allow an agent to find you a tenant and manage for the first 6 months - then spend 6 months reading this forum, www.singingpig.co.uk and www.landlordzone.co.uk and learn all about the pitfalls before diving in yourself.

Fred1_2

clutton wrote: »

one of the properties i manage has just had the now ex-tenant found guilty of possession of a kilogram of controlled substances with intent to supply

i had to get the bailiffs to get her out and she then told housing benefit that she had left two weeks earlier - guess what - HB don't want to pay the HB up until the actual evicition day as " the tenant has told us when she left and accept that" - oh right - they would rather believe a drug dealer than a professional landlady of 10 years who deals with them every week ...........

She probably has more money stashed away than i have even seen !!!!!

mmmm

my most heartfelt advice is = please allow an agent to find you a tenant and manage for the first 6 months - then spend 6 months reading this forum, www.singingpig.co.uk and www.landlordzone.co.uk and learn all about the pitfalls before diving in yourself.

Why do you think a letting agent would have protected you from this tenant? If you let someone else choose your tenants, you have no control over who you are getting.

Maybe you have better letting agents in your area than the ones I've come across.

silvercar

The point is that less desirable tenants are more likely to apply to private landlords advertising in shop windows/ gumtree/ craigslist etc than apply through large letting agents where they know they will be checked out following standard procedures.

Fred1_2

silvercar wrote: »

The point is that less desirable tenants are more likely to apply to private landlords advertising in shop windows/ gumtree/ craigslist etc than apply through large letting agents where they know they will be checked out following standard procedures.

Standard procedures that any individual can do for about £35 and a little bit of time and common sense. It really isn't rocket science. If you're an absentee landlord then I can see the point of using a letting agent, otherwise a bit of leg work and a reasonable amount of research will save both landlord and tenant money and hassle.

Maybe I've just been lucky in my choice of tenant and unlucky in the letting agents that I've come across.

owitemisermusa

IMHO, if you're just starting out it's better to use an LA (I have).

Fees range from 10 -15% excl VAT (that came as a shock, didn't factor in VAT into the sums).

If you live 176 miles away from the property, I think LAs are much needed help as you navigate through the murky waters first time round.

As soon as I feel ready, I'll dispense with their services.

Also depends on how busy you are.

I'm not chummy with any good tradesmen (the plumber i know never kept appointments and still hasn't dropped off an invoice after >1year).

Downside include fees and the fact that you're still liiable for any repairs / issues.

Imagine: charging £40.54 to "rectify faulty electrical socket"!

Ah well......

Fred1_2

owitemisermusa wrote: »

If you live 176 miles away from the property, I think LAs are much needed help as you navigate through the murky waters forst time round..

If you live that far away you do need a management agent, trouble is finding a good one