[novice landlord]

Hi,

Recommend your letting agent here - give examples of why they are good.

I've been receiving quotes from established estate agencies to let a house as I am seeking a full letting and management service before moving away from the area.

I am tending to receive quotes that, with VAT and additional charges (for renewal, inventory and tenancy agreements) actually means a charge of 20% of the gross rental.

Now peace of mind is priceless if they do their jobs right and find good tenants quickly and deal with repairs and payments efficiently but the postings on Gumtree beg to differ. Also £300 per month for a couple of hours work each week is steep.

Thing is, whenever I research smaller agencies whose rates are less painful, their adverts invariably lead to shabby websites that display few properties or they have no online presence. If I check their details with Companies House, I find that their accounts are overdue. I figure if they can't sort out basic company admin like corporation tax, I ought not entrust my finances to them and if they don't know how to set up a domain name and publish a webpage, they are being a mite lazy).

I am also aware of my friends experience when she rented a property through an agency in Glasgow where they paid their rent directly to the agency but were contacted directly by the owner demanding an explanation of why they withholding it. It transpired that the agency routinely informed owners that they hadn't let the properties yet or that the new tenants had stopped paying the rent when they were actually fully tenanted and kept all the rent themselves without passing any on.

Time for discussion

[honestguy]

Hi,

First of all i think your paying faaaaaaaaaaaar too much for rental and management! usually companies only charge 12-15%.

I used to work as an estate agent, but left because it was too dodgy for me!

Where abouts is your property? I could recommend a trustworthy agency, or point you into the direction of one.

[novice landlord]

Thanks. Don't worry, all sorted.

Yes, agencies tend to charge 15% for full management but this is always exclusive of VAT which bumps it up further.

Commonly, it's usually exclusive of additional charges that you would have thought such a management fee would have covered to make it fully hands off for the Landlord.

This includes additional costs for drawing up the tenancy agreement, producing the inventory, check-in/check-out, inspection reports, tax return report, billing additional travel and time costs for viewings & meeting workmen at the property.

So when VAT and additional charges are factored in, estate agencies expect to take 22-24% of the gross rental income. This is with all the financial risk on the landlord, as they don't guarantee rent or fund any of the legal costs if there are breaches of the tenancy agreement.

Again, just to put the boot in further, after expecting a cool quarter of the gross rental income with no risk to themselves for a couple of hours work per week, some expect most or all of the management fee paid in advance before tenants are even found by them...