Fees charged by letting and managing agents: A breakthrough?

[ivyellentaylor3]

Just visited Landlord and Letting Show at Barbican this week. A bit quieter than usual but some interesting developments in the market.

Saw a couple of new letting/managing agents who are actually charging reasonable rates!!!

As a landlord I get really fed up with being over-charged for these services (especially in London) so I was really pleased to see this new development.

Of course the traditional agents there were predictably critical when I spoke to them about it....vested interests!!

Anyway you might want to check them out; the best one IMHO was www.thamespropertymanagement.com who are charging 5% for tenant find and 7.5% full management with no VAT. Given that I am currently paying up to 15% in London I consider this worth a shot next time I get a vacancy. Also there are no fees to tenants which might help us landlords grab back some of the Gumtree market

IvyEllen

[Richlist]

Letting agents fees vary because they each include different services.

The details you have posted mean very little without knowing which/ what services are included in the prices quoted.....eg

Do they include: ?

Finding tenants to the landlords specification.

Referencing

Arranging AST

Arranging extra contract clauses

Arranging S21

Protecting the deposit

Providing copies of all docs

Dealing with viewings

Making regular inspections

Check in & check out inventories

Organising gas safety check

Arranging repairs

Dealing with tenants maintenance requests

Arranging rent guarantee insurance

Organising guarantors

etc etc

[Grampa]

An agent in my view who charges 7.5% with no extra fees elsewhere will not be in business long and I very much doubt they will offer a genuine full service.

Also if they don’t charge vat now they are likely to some time in the future (& overheads will increase) if they are still going.

Think about it. If you have 100 properties at an average rent of 750 pcm that generates £67500pa and you would need 2 full time staff at least to manage that amount of properties.

The below is guesstimates but wont be too far off the mark and the wages is likely to be higher.

40k wages

10k rent

1k PI & contents insurances

2k Utilities (water,electric, rates)

1k phones(2 lines)/broadband/fax/mobile

6k zoopla/righmove

1k legal courses/training (including traveling costs)

1k Stationary

1k Leaflet delivery & printing

1k PC Maintenance back-up etc (including anti virus membership)

1k Newspaper ads etc

1k Accountancy fee

1k Letting software

67K TOTAL so far and there is loads more to add such as corporation tax, company paye. office cleaning, window cleaning, petrol, car insurance, bank charges, fire extinguishers service, data protection membership, ombudsman membership, office maintenance. tea & coffee, printer ink, any lease equipment, any membership to arla/Nals/TDS. Xmas party, Postage. Start-up loan repayments, webhosting, annual domain name fee, credit check costs, any commercial rubbish disposal costs, parking, to let boards erection(£5 per movement), land registry checks, petty cash and any freeholder maintenance and insurance bills you are liable for as there is a good chance you will have a full repairing lease.

A lot of small start up agencies have a higher % of lower end/price properties (below 750pcm) so the figure of £67500 is overly optimistic in my view.

So going on the above i dont see the recommended company in the first post lasting too long unless they work on a shoe string with a reduced service and you can see why 10% for full management is more realistic.