Letting Agency Fees Can Be Traps for Accidental Landlords says Letting Focus
Just the other day, I popped in to a local letting agent and was pretty surprised.
It was all very impressive with a posh waiting space and lots of young twenty somethings all busily taking calls at rows of high technology work stations. Wow! You don’t see that kind of thing in our local high street too much.
I was there to see if they could help me.
You see, right now I’m pretty busy preparing for my talks at the London Property Investor Show – the only property show that is worth bothering with. (You should go -see our ticket offer below)
So I thought, maybe this agent could take the time off my hands and find a tenant for a property that I have which have just become available.
As you may know, I usually do all this stuff myself for my London properties.
I find that finding and checking tenants’ references is easy for me because I know what I am doing and have done it a lot.
And in London, we have the blessed Gumtree.com free site to use to find tenants which works very well – as long as you remember to take a few pics of the property and keep refreshing your ad each day.
So, I asked the agent what their fee was.
“10% plus VAT” they replied.
OK, so far so good, but this is a bit like saying that a piece of string is, “Oh, so long.” In other words it is not much use at all.
“And what term is that 10% based on?” I asked.
“All our tenancies are for 24 months” was the reply.
Gulp. …..Now let’s see.
For this one bedroom flat, which was to rent at £758 per month, that is a cool fee to them up front of £2137.56. Crikey!
Now, let’s be honest, how many tenants do you get who come along and would willingly sign up to a 24 month term?
Not many. In fact, in all my 22 years of letting, I have never had one who wanted such a long tenancy.
For a start, they don’t know what you will be like as a landlord and 24 months is a long time to be stuck with a lousy landlord. But more importantly most tenants like the flexibility that renting gives them and would quite naturally like to be able to get out of a letting after 6 months. As a landlord too, you would be nuts to willingly sign up for a 24 month term because if you get a tenant who is, frankly a bit of an a**e you will want to be able to get rid of him a bit earlier than 24 months.
And unless, he was at least 2 months overdue on the rent or decides to run a brothel at the property or do something else of a nasty criminal nature, there is no sure fire way you can be easily rid of him if you have signed up to such a long term.
OPT FOR 6 MONTH TENANCY AGREEMENTS
That is why most sensible landlords opt for 6 month fixed term contracts which are extendable if everyone is happy after 6 months has ended – i.e. you simply agree to roll the same tenancy agreement on (it is called a monthly periodic tenancy)
After I walked away, I called this agency, this time posing as a tenant.
They explained about the 24 month thing - but only when pressed.
I queried why it was so long.
And the answer came back: “Sorry, all the landlords insist on it” which is, of course, is utter nonsense.
However, many new Accidental Landlords who have decided to rent out their home because they can’t sell it - will fall for all this – which is why letting agents like this one are trying to get away with it.
Oh, what happened in the end?
The next day, I let the property for nil cost using an advert in Gumtree. A nice lady tenant moves in next week.
And before I get complaints form letting agents reading this, I should say that not all letting agents operate like this.
Many agents in London and all the ones I have used for my Kent properties are sweeties and charge a fair rate for very good work.
However, there are rogues about – and some of the rogues are big names. So watch out.
OFFERS ON OUR NEXT EVENTS
Come to my next London seminar and networking meeting – details here… Property Seminar. Just email us at david@lettingfocus.com and give us your full name – and that’s it. Then jst turn up and pay on the night.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of property investment expert lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 3 years has been the UK’s top selling property title - buy the UK's top selling landlord book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert property journalist, property speaker and a well known landlord blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide landlords coaching
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property mentoring programme at my website.What’s unique about lettingfocus.com is that we offer you help as an independent property investors coach because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Look to the right of this blog and you should see my smiling profile. Then page down a bit and you come to where it says “Site feed” - click there and away you go.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included including also the links in the section “ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON” Please contact us via the Contact US button at our main site http://www.lettingfocus.com/ if you have any queries about this.
It was all very impressive with a posh waiting space and lots of young twenty somethings all busily taking calls at rows of high technology work stations. Wow! You don’t see that kind of thing in our local high street too much.
I was there to see if they could help me.
You see, right now I’m pretty busy preparing for my talks at the London Property Investor Show – the only property show that is worth bothering with. (You should go -see our ticket offer below)
So I thought, maybe this agent could take the time off my hands and find a tenant for a property that I have which have just become available.
As you may know, I usually do all this stuff myself for my London properties.
I find that finding and checking tenants’ references is easy for me because I know what I am doing and have done it a lot.
And in London, we have the blessed Gumtree.com free site to use to find tenants which works very well – as long as you remember to take a few pics of the property and keep refreshing your ad each day.
So, I asked the agent what their fee was.
“10% plus VAT” they replied.
OK, so far so good, but this is a bit like saying that a piece of string is, “Oh, so long.” In other words it is not much use at all.
“And what term is that 10% based on?” I asked.
“All our tenancies are for 24 months” was the reply.
Gulp. …..Now let’s see.
For this one bedroom flat, which was to rent at £758 per month, that is a cool fee to them up front of £2137.56. Crikey!
Now, let’s be honest, how many tenants do you get who come along and would willingly sign up to a 24 month term?
Not many. In fact, in all my 22 years of letting, I have never had one who wanted such a long tenancy.
For a start, they don’t know what you will be like as a landlord and 24 months is a long time to be stuck with a lousy landlord. But more importantly most tenants like the flexibility that renting gives them and would quite naturally like to be able to get out of a letting after 6 months. As a landlord too, you would be nuts to willingly sign up for a 24 month term because if you get a tenant who is, frankly a bit of an a**e you will want to be able to get rid of him a bit earlier than 24 months.
And unless, he was at least 2 months overdue on the rent or decides to run a brothel at the property or do something else of a nasty criminal nature, there is no sure fire way you can be easily rid of him if you have signed up to such a long term.
OPT FOR 6 MONTH TENANCY AGREEMENTS
That is why most sensible landlords opt for 6 month fixed term contracts which are extendable if everyone is happy after 6 months has ended – i.e. you simply agree to roll the same tenancy agreement on (it is called a monthly periodic tenancy)
After I walked away, I called this agency, this time posing as a tenant.
They explained about the 24 month thing - but only when pressed.
I queried why it was so long.
And the answer came back: “Sorry, all the landlords insist on it” which is, of course, is utter nonsense.
However, many new Accidental Landlords who have decided to rent out their home because they can’t sell it - will fall for all this – which is why letting agents like this one are trying to get away with it.
Oh, what happened in the end?
The next day, I let the property for nil cost using an advert in Gumtree. A nice lady tenant moves in next week.
And before I get complaints form letting agents reading this, I should say that not all letting agents operate like this.
Many agents in London and all the ones I have used for my Kent properties are sweeties and charge a fair rate for very good work.
However, there are rogues about – and some of the rogues are big names. So watch out.
OFFERS ON OUR NEXT EVENTS
Come to my next London seminar and networking meeting – details here… Property Seminar. Just email us at david@lettingfocus.com and give us your full name – and that’s it. Then jst turn up and pay on the night.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of property investment expert lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 3 years has been the UK’s top selling property title - buy the UK's top selling landlord book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert property journalist, property speaker and a well known landlord blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide landlords coaching
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property mentoring programme at my website.What’s unique about lettingfocus.com is that we offer you help as an independent property investors coach because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
Look to the right of this blog and you should see my smiling profile. Then page down a bit and you come to where it says “Site feed” - click there and away you go.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included including also the links in the section “ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON” Please contact us via the Contact US button at our main site http://www.lettingfocus.com/ if you have any queries about this.
Labels: accidental landlords, letting agency, letting agents, letting fees, Unfair letting fees
This entry was posted by lettingfocus, on
Thursday, September 04, 2008.
