Updating post from Reddit.
Hi all, I have just purchased my first buy-to-rent property and I am looking at using an estate agency to manage it as I currently have a full-time job and will likely not have enough time to manage it. I also don't really know how I would go about a tenant.
Any advice would be hugely appreciated:
Thanks for the advice!
Manage it yourself if you’re local to the property. And if it takes up more time than you’d then you can use an agent. Dont give an agent 10-12% until you’ve tried it yourself
I don’t agree with this with the Renters Rights Bill and Licensing. 10 years ago it was worth it as the downside was lower. Now the fines are in the thousands or tens of thousands. That’s a LOT of risk.
Is there anything in particular I should be concerned about with the renters rights bill?
Personal recommendations are worth their weight in gold. Do look at reviews, but take them with a pinch of salt. Pay attention to which agents are not only listing the most properties in the area but also successfully letting them. Personally, if I were local to the property, I would prefer to manage it myself. You can use a “let-only” service, where the agent carries out the viewings and sets up the tenancy for a one-off fee at the start, rather than paying ongoing monthly management charges. Alternatively, you could use a platform such as OpenRent, where you conduct the viewings yourself. One approach I’ve found useful is to ring the agent while posing as a prospective tenant, just to see how they treat potential viewers and how proactive they are in arranging viewings.
I sometimes wonder if newbies ever bother looking through the posts here. This group is full of people complaining about how crap their agents are. Join the NRLA, do it yourself. You will do a better job and your tenants will thank you.
I would always choose based on the reputation in the local area. Cost depends on service provided but I would be resistant on going anything above 15%. If the tenants are fairly responsible then management is obviously more straightforward but the good agents earn there money when tenants aren’t so smooth.
Speak with your accountant (or lawyer) and ask if they have any connections they can refer you to.
15% sounds like a London price.. 8-10% would be the provincial rate plus letting fee/inventory/tenancy deposit protection (plus VAT). You will pay more for rent guarantee insurance
Yes I'm based in London and it's 15-20% for full management with the big chains! How long have you lot been with the same agent? Have you checked for better prices?
I pay 8%, fully managed, east london.
I'm so confused about this price difference between the large brands and the smaller one chain agencies. Does your agent provide exactly what the big brands like Foxtons provide? Do the cheaper ones charge you additional hidden fees?
I get charged for inventories and new tenancy paperwork is 150 inc vat. I can't really find any 'hidden fees'. I pay 8% per month and they handle all issues. I've been with them for 10+ years. I've told them if there's maintenance <500 don't bother telling me and just do it.
Essentially I think they are a trustworthy business. Personally I'd stick to the smaller independent agencies and obviously avoid any rent guarantee schemes.
Agree with the idea of self management. Agents in general have a bad reputation and unfortunately this is often deserved. Much better to have a direct relationship with your tenants in my view.
Don’t employ an agent. Waste of money. Do it yourself. The best person to manage your investment is you.
I would approach local estate agents first, go there in person and get a sense of what they’re like.
Big chains tend to be quite exploitative and charge exorbitant fees for everything. They’ll promise the world (short term corporate lets for 200% market value), and then under deliver.
My local agent charges 10% for full management, with no setup fees. Foxtons quoted 17% + VAT and £700 tenant funding fee, and then had the cheek to call me daily to express their discontent that they could see it on rightmove with someone else!
Foxtons charges are the highest. Not just the headline amount, but the sneaky ones too, like hefty renewal fees for doing nothing.
So I was initially thinking of going with one of the large chains like Foxtons, for peace of mind. But the prices for them are definitely significantly higher, I wasn't sure if it was because they provide higher quality service or is it just purely branding? Have you used them previously?
I haven’t used them personally but friends of mine have and all have bad experiences. Things like charging £300 for a new tap in the bathroom etc.
The only benefit of a big chain is that they have access to a larger client base so may fill the place faster, but given that everyone lists on rightmove now, it’s unlikely to make a difference
I'm also looking at changing agents! Has anyone done this before for a better fee? Is it much of a headache?
My agent wanted 6months notice and 2month rent in fees (£1,100p/m) for terminating the contract
Find local independents. Go meet them in person. Decide based on how you feel about them and any personal recommendations.
There’s different aspects of what you describe:
Tenant find - you can use open rent or an agent (Landlord Lab offer a handholding service if you ask them about it). This is where you can save the most.
Compliance - this is the most risk and I think it’s dangerous to go alone when you don’t have a lot of time.
Books/accounts - can do yourself but a good accountant pays for themselves. Just get a property specialist to get proper value.
I haven't really thought much on the books/accounts side of things, what are the main things I need to consider there?
If using a company then it’s companies house and HMRC filings. If it’s in your own name then self assessment. If a company this might answer a few questions.
I am so glad I didn’t manage it myself after having been through the experience now. I use Capital Rooms - London-based independent agent who I would recommend. With independent agents you get accountability and a direct line to them should you need them.