Last week I was approached by a Landlord who is in the process of purchasing a rental investment apartment and who is currently contacting lots of local lettings agents, in order to get himself the ‘best fee’ for when he is ready to put his property on the market.
Now I know that I cannot offer the ‘best fee’ if – by best – that means the ‘lowest fee’, but it got me to thinking about how so many Landlords do not take the proper time to find out how insignificant the ‘FEE’ really can be when talking about letting – rather than selling!
For instance: If we work out that an average apartment rents for 12 months at £1000pcm, that gives an annual rental income of £12,000, on which the ‘fee’ is calculated.
- So a usual tenant find fee for a REGULATED agency, such as Sewell & Gardner (because we are a licenced ARLA firm) would be 11% + VAT = £1584 (inc VAT).
- A non regulated agency might charge 8% + VAT, so using the same rent criteria, this would calculate at £1152 (inc VAT) – a saving of £432 (inc VAT).
Now consider the difference between a regulated agency – using Sewell & Gardner as an example in this instance – and a non-regulated agency:
Sewell & Gardner have a dedicated lettings office, with 15 lettings staff ready to take care of your property, of which, 2 are Fellows of ARLA (which means they know their stuff) and 6 individual Members of ARLA, and 6 currently studying for their Technical Award in Lettings & Property Management – so basically, you are going to be correctly advised!
Having this many qualified staff at your disposal, not only means that you have peace of mind with regards to the tenancy you are entering into, and assured that you have carried out EVERYTHING you are legally required to carry-out (so no nasty surprises) BUT let’s face it, 15 staff are going to have your property rented quicker and more efficiently than a smaller agency with 1,2 or 3 staff working there.
And working out the rental calculation: £1,000pcm is equal to £32.88 per day, so if your property is empty for 13 days longer because you’ve chosen a smaller agency, then you have already lost the £432 you saved on FEES….! And left yourself exposed to a sub-standard tenancy agreement, incorrect advice (and believe me, I have heard ALL SORTS OF RUBBISH being told to Landlords by non-qualified agencies….) and you could face really hefty fines or WORSE if you have failed to comply with your Landlord obligations and something goes horribly wrong.
So how do you choose the correct lettings agency?
Firstly ASK AROUND – in a small community, there are bound to be some glowing reports or some not so glowing reports to be heard! You can always ask your lettings agency to recommend someone to talk to…. after all, surely they have loads of satisfied customers who would be happy to pass on their recommendation.
Here’s some feedback we have had in the past:-
LOOK AROUND FOR “LET BY” BOARDS – after all, this has to be the most telling feature of a good agency, lots of ‘let’ boards – and where Sewell & Gardner are concerned, check out the “Let in a Day” boards for proof of our efficiency!
LOOK ON THE “ARLA” WEBSITE – The Association of Residential Letting Agents is the biggest and most trustworthy body for regulating Letting Agents and ensuring that they have Client Money Protection and Legally Trained Staff in every office.
USE A “SAFE AGENT” to really ensure that the agency isn’t going to go bust and take your tenant’s deposit money with them, meaning that you have to find it from somewhere – because you are liable for that money you know!
Check out RIGHTMOVE, ZOOPLA / PRIME LOCATION, NEEDAPROPERTY, AGENCY WEBSITE and all of the other popular property portals to ensure that your chosen agency actually has the ability to upload their properties to the main places people will look for a rental property!
My most important advice would be to actually go into the office and speak to the staff, ask them about the market they work in, check out how they are going to interact with your new tenant and how knowledgeable they are about the industry they work in! If you find the staff friendly & approachable, then the chances are, other customers will too and one of those could be your next tenant.
If you have any questions or queries and would like advice, please do not hesitate to contact me!