Taking over property management from agent due to 35% increase in fees

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    Taking over property management from agent due to 35% increase in fees

    Hi,

    I would be interested to hear advice and experiences in taking over the management of a property from letting agent.

    My tenants have been in my property for 4 years and have been managed by a letting agent for a set fee per month, in that 4 years I have done all safety checks and dealt with repairs, my agent has collected the rent and done an annual inspection.

    I receive what I think is a fair market rent for the property so have not imposed any rent increases in the 4 years despite tax changes etc as I am taking a long term view on the investment and also want to ensure the rent is affordable for my tenants as they are long term.

    Today I received an email from my agent advising of the new legislative changes and because of this their whole pricing structure is changing as of 1 June, resulting in a 35% increase in my monthly letting fees. This means I would be letting at a significant loss. The agents advice is to pass this on to the tenants.

    I am am reluctant to do so as I think it is unfair on the tenants and also think it would push the rent above the market rates for our area and potentially lead to them moving which I want to avoid as they are good tenants. Because of this I am looking to take over the management and I am sure my tenants won’t mind as I have had to mediate a previous dispute between them and the agent.

    Any advice would be welcome on this, I assume I’m not the only landlord in this position.

    #2
    I wonder if agent might reconsider the increase, if you tell him you intend to sack him in view of the increased fees?

    Comment


      #3
      something's got to give somewhere. I've just got off the phone to one of my agents who has been in the business 30 years. In his professional opinion, the new bill will result in 30%+ of agents going out of business. That means a sizeable number will do as yours has done and attempt to recoup these monies from the landlords. If you sack them, they won't get the cash. If you keep them, you'll need to get the cash from the tenant. There's no way around it.

      It's likely you could negotiate a compromise where you do increase the rent a certain amount and maybe ask the agent to lower their fee increase to balance it out. Otherwise, they'll lose you completely. You hold the bargaining chips here...

      Comment


        #4
        I’ve had nothing but trouble with agents. I manage one of my properties myself, have done for 2 years, long term tenant and not one problem so far. You seem to do most of the work yourself anyway so save yourself some money. Just read up on legal obligations. I registered with data protection, do my own legionella and fire risk assessments.

        Comment


          #5
          some people can't manage properties themselves. I've been overseas for the last 20 years. Managing properties yourself when you're over 3000 miles away is very tricky!

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