Suitable fee to charge tenants

[Whitey]

Hi

I have previously paid a letting agent a fee for finding tenants (i've done the ongoing mangement myself). This time round I am looking to find the tenants myself to avoid this fee.

Can anyone advise what is a suitable fee (if any) for me to charge tenants for undertaking the credit checks and drafting the contract? Also, how do you go about advising them that there will be a charge for this and then collecting the money?

Trenners - you mention in a earlier thread about having a form which you can complete when collecting a holding fee. Is there any chance of getting a copy?

Thanks in advance

[plym77]

I cannot advise on an appropriate fee, however, do remember that if you do charge an administration fee that this will form part of your income and be taxable.

[Matthew]

The maximum you should charge is the cost you have incurred. Often the Tenancy agreements are free from the internet. Rentchecks.com charges about £20 for the checks.

You shouldn't really charge more than the costs you've incurred, although letting agents do.

I would struggle to look them in the eye if they ask why they have to pay extra charges.

I don't charge them for the rentcheck, it is only £20, and it is for my use, not theirs. Though again letting agents do charge them for it.

You are doing the right thing though, I find letting agents take much longer to find tenants and charge the earth.

[Trenners]

Hi Whitey,

I agree with Matthew - It is best not to charge your tenants any fees as the credit checks that you perform are for your benefit (not theres).

If the tenant passes the credit check then you've found yourself a good tenant - so who cares that it has cost you £20 - and if the tenant fails the check then it is £20 well spent as you have avoided letting your property to a dodgy tenant.

If you send me an email - mark.trenfield@btopenworld.com - I will send you a sample holding deposit form.

Good Luck,

Mark

[Whitey]

Hi Whitey,

I agree with Matthew - It is best not to charge your tenants any fees as the credit checks that you perform are for your benefit (not theres).

If the tenant passes the credit check then you've found yourself a good tenant - so who cares that it has cost you £20 - and if the tenant fails the check then it is £20 well spent as you have avoided letting your property to a dodgy tenant.

If you send me an email - mark.trenfield@btopenworld.com - I will send you a sample holding deposit form.

Good Luck,

Mark

Thanks to Matthew and Trenners.

Your comments make complete sense... no charge.