Newly refurbished house to let- fully managed or finder fee only?

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    Newly refurbished house to let- fully managed or finder fee only?

    I have been a landlord, initially accidental (had to manage fathers properties when he became ill) then by choice. Only 2 properties, a student flat which is fully managed and a house which I inherited with tenants in situ and no letting agents, it was quite hands off but amicable. They have moved out after a good 20 years and the place is undergoing total refurb. Should be ready late August. The agents for the student flat are ok, usual occasional issues but in the whole competent and honest as far as I can see. But of course they take a good chunk of the rent, in real terms probably 20% once all the extras have been added. I feel I could go for managing the house myself. Just a bit apprehensive as have never managed a letting myself from scratch with new tenants. I work 4 days a week and the house is not in the city I live in, it’s really a whole day round trip if I have to go there. I have made links with a few reliable tradesmen ( plumbers, Electricians, etc). Anything in particular I should bear in mind? I am a member of the NRLA, I understand the legal obligations ( rent deposit, EPC, data protection, the usual safety checks and measures). Is there anything else I should bear in mind? I would like to manage the house myself if possible. and continue to use agents for the student flat.
    Thanks in advance.

    #2
    I've never used an agent to manage my properties - even when starting out. In the past I'd always used the 'find tenant only' service.

    However, after terrible service from an agent (no feedback after most viewings, multiple attempts to put forward unsuitable tenants, lights left on, property left unlocked overnight once, etc, etc), a friend suggested OpenRent. It's £49, plus £20 per person (as well as any guarantor that needs checking) for the credit checks/referencing. You fill out a template and upload your photos, then pay the £49 and the advert goes live on Rightmove & Zoopla (which is all you need to draw attention really).

    You have to do the viewings yourself - the website sends you a text when someone shows an interest and you log into the portal for details. I actually found viewings enjoyable, and you get to meet the potential tenant before agreeing to let to them (rather than after they'd moved in). Tenants said they preferred dealing direct, and getting shown around the house by someone who knows the street, the neighbours, and someone who can answer all their questions about the quirks of the house.

    Their system sorts out the deposit, first month's rent, and the (digital) signing of the tenancy agreement.

    You need to do your own inventory (if you don't want to pay extra for one), but I just copied the layout and level of detail from an old one the agent had provided.

    I'll never go back to using agents again, I consider my past letting agent fees (maybe apart from the very first time) as wasted money.

    It's not as though you're a novice landlord, if I were you I'd give it a go once and see what you think.

    Comment


      #3
      Being a member if NRLA is a good start, but I suggest you do their foundation training or read every guide on the website before you think about self managing. You also need to be sure you really have the time to do it. If you do that you will probably get a better result than using an agent imo.

      Comment


        #4
        If you use an agent at all, don't just use them for tenant find.
        You want your incentives and the agent's to be aligned.

        With tenant find, the agent gets paid when a living person moves into the property and it's in their interest for that to happen as frequently as possible.
        You want the best possible long term tenant.
        If the tenant is troublesome, there's no downside to the agent.
        If you want to repossess, you're reliant on the agent having done everything 100% correctly and being prepared to support you by confirming that.
        And if they haven't, they might lose some future business from you.

        With find and manage, your incentives are more closely aligned.
        They want the best possible long term tenant.
        A troublesome tenant is as much a pain to them as you.

        It's best to think of agents ongoing fees as lost income rather than a cost.
        So (outside my financial records) I think of the rent being the net income after the agent's cut.

        The more your agent earns the bigger the customer you are to them.

        Or do it all yourself.
        Your incentives are 100% aligned with your own!!!

        It's all or nothing for me.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          Thanks for your views guys. Beswick, sounds like you had a really bad experience with your agent, not surprised you moved on and I’m glad Openrent is working well for you; it’s something I would certainly consider if the house was nearer, but just doing the viewing would probably take out a week which I’d need to cover with annual leave- a precious commodity for me. JP, I understand about the agents’ incentives not being aligned if I go for tenant find, however I also use the agents for another property so it’s not like they’d be severing links with me after finding the tenant. DP, thanks for the advice, I think I’ll do some more remote courses with the NRLA ( have a,ready done electrical safety, but need to do the fundamentals of letting one).

          Comment


            #6
            I have had a similar bad experience and would never use a tenant find service again. I use openrent now but my properties are all within 3 miles. I had one half an hour away and I found that a pain. Personally I wouldn't have one I managed myself that far away. If you do I'd suggest it's even more important you have someone you picked yourself.

            Comment


              #7
              Yes, I’ve been reading around about OpenRent (OK, on mumsnet ) it seems the reports are mostly positive and I’m coming round to considering it. Having one day a week to manage the property does mean I have some leeway.

              Comment


                #8
                I think perhaps flexibility in your schedule is more important than the amount of time you may have. When you have a change of tenants you may need several days close together to check out one set, clean, advertise, interview, complete paperwork and check-in. You may then have little activity for a while apart from inspections etc, but repair issues can arise at any point and may not wait for your free day.

                Comment


                  #9
                  And the tenant's free day may not coincide with yours.

                  There are five hidden benefits to using an agent:
                  1 - There are usually several people to answer the phone, make calls and arrange things at an agent, while if you DIY, there's you.
                  2 - It's much easier to say no to things via someone else. And if you change your mind, you can always blame the agent.
                  3 - It's much easier being asked by an agent to authorise £200 to fix a fence (or whatever) without spending half an hour having the whole story explained to you.
                  4 - Letting agents have access to general-purpose handymen who can deal with most odd repairs. These are like unicorns.
                  5 - Agents can usually get a central heating engineer even in the first cold snap of autumn when everyone turns their central heating back on for the first time since spring.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    My first BTL I mistakenly used an agent to manage. 10% a month Plus VAT for doing nothing, when there is anything wrong they phone me to sort it out, they have lost high security keys (£40) and denied it. Tenant stayed for 4 years. Just moved out as I have sold the flat. They even changed the electricity supplier on the day after the tenancy ended (watch out for that one, apparently it is quite common and they get a commission from the provider). Gave them an incorrect meter reading, but worst of all they didn’t tell me.

                    I have three other BTL, I manage them all myself, a lot less hassle, I use an agent (not the same one) to find tenants and hold deposits, I have my preferred contractors.

                    It came down to, do I want to spend 10% + or £200 per month or £2400 a year to do something that, yes at times is a hassle but on the whole is pretty easy.

                    Comment


                      #11
                      Thanks you everyone for your viewpoints. Fireriskassessor I agree the thought of handing over 10% plus VAT monthly when actually the buck stops with me and I have to be involved in all trouble shooting anyway is sobering. I might go for finder fee only with the first tenancy then try managing entirely myself. When the refurb is finally complete ...

                      Comment


                        #12
                        I'm surprised despite being a member of the NRLA you still use an agent; except if you have a portfolio of properties perhaps. The most important thing is to find your tenants yourself. Use Openrent and Facebook. Do your viewings yourself. That way you get to interact with them and decide whether to go with them.

                        Comment


                          #13
                          Hi delectable. No I only have two properties, but work 4 days a week and they are in a different city requiring a one day round trip. After this tenant find only I think I’ll have enough experience and confidence to do full management myself. I am not in Facebook and don’t want to be.

                          Comment


                            #14
                            Facebook is good for snooping, if you don't use it for anything else it can give you an idea of their lifestyle.

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