Experienced landlords - please advise me on finding a letting / management agency(15 Posts)
I live out of the UK, and own a flat in London which has been let to a long-term tenant via a private arrangement. The tenant has recently given notice, so I will be looking for a new tenant.
Given my situation, it seems best to find an agency to handle letting and rent collection, and also to manage the flat. I've had a conversation with one agency (recommended by a friend many years ago), but think I would be wise to talk to several companies.
So, where do I begin?
- presumably, it makes sense to find an agency based in the area where the flat is located?
- I have the name of various estate agencies, but what questions should I ask?
- how do I evaluate the various agencies?
- I understand that typically fees are charged as a % of rent received, and that there is one fee for finding a tenant/rent collection (typically 10%), and another fee for managing the property (typically 6%).
Are those percentages fairly standard, and are they typically negotiable?
- Anything else I should know / consider?
- What is the market like for lettings at the moment? I've been told there is a glut of flats as people rushed to buy before the change in stamp duty. Is that correct?
There are so many nightmarish stories out there about awful tenants and terrible agencies (who promise the world, but deliver little), and I am - obviously - hoping to avoid both. Any advice or guidance is much appreciated.
I think those % fees sound a bit high, but I only use online agencies to find tenants and have never had a management arrangement in place. Yes, I would agree that there are too many flats on the market at the moment (and likely to be more if we get a flood of accidental landlords due to a property recession) but, as you have been renting the flat for several years to the same person, presumably the rent is a bit below market price and you can probably raise it a bit and still undercut the competition. Have you seen the property recently, is it likely to need any work/redecoration before you relet? If so, the summer tends to be very quiet in terms of getting a tenant so it would be a good idea to focus on that, there are not many people looking for a rental in August.
Choosing an agency is a tricky - I had a good experience with Douglas & Gordon many years ago but doubtless others will come on and say they were crap. If possible, I'd try to visit some of the offices to get an idea of how professional they are when you walk through the door but that may not be possible if you are a long-haul flight away. I almost used easyProperty.com last time I had a vacant flat but then found someone through another means but they do offer amazing deals - I just have no idea how good they are.
I use a local agent recommended to me by word of mouth, by a colleague who had both let and rented through them.
I pay 15% for a full management service - pretty standard for our area. I was overseas for a number of years and decided just to hand over everything to the agents. Over the years they have earned their fee - some months they do very little, others they do a lot. They have always found me really good tenants and given good advice on the market.
I'm just about to re-let my house. The market seems pretty flat according to the agents, and as lala says July/August are pretty dead anyway.
Good luck with your new tenants!
Thanks to both of you. it is good to have your thoughts as i figure out how to proceed.
The flat will definitely need to be painted, and also is likely to need new flooring (carpets are getting old). I expect the kitchen will also need a bit of sprucing up too - though hopefully not a complete refurb. The agency I am currently speaking with would arrange for all of that to happen, but no idea how I'd be charged. Is there a standard formula for that? Perhaps a % of total cost?
Do both of you rent your properties furnished or unfurnished? That is something I've also got to consider. Much of the current furniture was my own which the tenant was happy to use, but I doubt it will conform to current regulations.
It will need to conform to current fire safety regulations etc. Tenants who bring their own furniture tend to stay longer and, since the government is phasing out the 10% wear and tear allowance (I can't remember if it is this year or next ), it makes more sense to rent unfurnished.
I suspect putting an agency in charge of works will cost a fortune and I would not want to entrust it to an agency I had not used before.
lalalonglegs - the problem is, I've got no choice. It must be managed as I am so far away, so the issue for me is how to evaluate which company is most likely to do a good job, and what is a fair price to pay for that job.
I think I would prefer to use a project manager to oversee works - approx 12% of project cost and you will have someone who genuinely knows about building works/refurbing (if you choose wisely) rather than some office junior who doesn't know one end of a spirit level from another. Doing it remotely is always likely to be risky though - do you know anyone in London who can keep an eye on things or make recommendations?
As much as I hate to say it, out of the letting agents I've had contact with Haart have been okay. Pretty prompt at fixing things. I should say as a tenant not landlord. Fees were pretty standard too but obviously I don't know what they charge our landlord.
We used a "local" agent initially only to find all the lettings mgmt. was done from one central London office
The agent was instructed not to give the keys out to trademen but to let them in etc - property was yards away from the office - they ignored this
We have now moved the property mgmt. to Helena Jackson hjpm.co.uk/ who does it at a better price and provides a better service. Her team have been great at sorting out repairs etc/ refreshing the place between tenants
We have still used an estate agent for the lettings
Everything is negotiable. However.
We use KFH, and they are turning out to be rubbish.
Too many people emailing me. Then they are out of the office when you need them.
No matter what percentage you decide on, most agents will expect money up front. This works in that you pay a lower percentage thru the year, Ie you have split your percentage. Agents get cash up front and you have a bit more money monthly.
However, do be prepared to stump up cash on change of tenancy etc.
I don't use their cleaning or repairing services. I call on my own.
We are also abroad. My major issue with KFH is that they rented out the house to the first people who came along. Easy for them. The job is done. I wanted to vet future tenants. KFH can't be bothered with that so we have ended up with students in out family home (we are abroad for a couple of years). I am furious. So specific clauses have been added to the contract. We have to move back to our family home and if students piss off our neighbours, we are done for.
The current tenants have been a bit rubbish, but at least they paid rent on time.
Try and ensure as little time between tenants so your finances are not stretched. Too long a gap between tenants doesn't work financially. Agents might not worry about that, but it's worth keeping an eye on.
I am in uk at the moment, so will be going to our house to check it, meet cleaners etc. And attack the garden. That's also been a sticking point. Tenants want a house with a garden. Agree to contract that states they must keep the garden in a good condition. Then they just ignore it for 6 months til I see photos and hit the roof.
Our house is semi furnished. Beds, tables and chairs in place.
I must say, once we return I won't want to do this again. We are now in the position where fees are so high, while the rent is double the mortgage, it's costing us more than we are making.
Interested to see Haart are ok.
I'd check them out on Trust Pilot or Revoo or wherever to see what their service is like, then give them a list of what you want (rather than them telling you what they will do for you) - you want someone that is going to be responsive and helpful.
It's all well and good drilling them down to 6% fees, but if they leave a leak in your roof for 24 hours the cost of your insurance excess is going to wipe out any saving.
This is wonderful feedback - thank you all.
Being so far away, I am not in a position to oversee the refurbishment needed to prepare the flat for the market. I have been told there is a special team who work out of one of the Zone 2 offices who coordinate and supervise all works required (for a juicy fee, of course). This is the same team who will organise any repairs needed, should things go wrong at the flat. So, it seems to make sense to use them - though I will be asking if their fee is at all negotiable.
Haven't heard of Helena Jackson, so will research that. Thanks for the tip. Also, had not considered KFH, but will avoid them based on advice here. I've heard from friends who think Winkworth are just OK, but nothing special. Have also heard that Douglas & Gordon are very good, but perhaps a bit too quick to call out expensive workmen (maybe necessary - not sure as I never saw the flat in question).
Will also follow up with TrustPilot and Revoo.
Would it be extreme of me to stipulate no smoking and no pets? If only an investment flat, I could perhaps overlook. But we hope to live in the place again one day.
Any other thoughts much appreciated.
No smoking is totally standard. From a tenants point of view, I have always looked for places with a view to staying long term rather than 6-12 months. I'm paying a lot of rent and as a grown up, I enjoy having a pet. It has always annoyed me that some people are up tight about pets but I do understand why. I guess I'm saying the no pets rule might only affect a certain demographic of tenant and if you aren't looking for someone long term for example, they might not want pets. Where is your flat and how long do you intend on letting it for?
No smoking and no pets completely standard and in London unlikely to reduce your applicants imho
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