BTL: property self-management after/without Agent

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    Originally posted by fridaypassion View Post
    As letting agents tend to have flat fees for advertising/tennant finding/vetting it makes the margins very tight at this end of the market potentially wiping out 40% of any surplus cash if we are changing tennants more than once per year.
    It should not matter how many times you change a tenant per year.
    You end up paying the same amount in fees if you use an agent (and they all charge the same %).

    Originally posted by fridaypassion View Post
    I know a lot of more experienced landlords will do their own vetting/marketing but I'm wondering if this is a sensible thing for us to try and do as novices?
    There are 2 separate considerations here.
    Referencing (easy)
    Dealing with tenants & managing the property yourselves (less easy)

    You can go direct to a referencing agency and get the reports on prospective tenants yourself.
    Referencing is now all done online so you aren't handling anything physical at any stage yourself, although you may ask to see people's passports or driving licences if you want before you go further or even ask them to complete an application form (samples of which you can find online).

    The much harder aspect is managing tenants.
    As Poppy35 said, if you don't know about all those elements she mentioned and you don't wish to, you will have to use an agent as you cannot avoid them and you could potentially be opening yourself up to a whole bunch of hassles, complications and costs/money loss.

    While you can learn all these "factual" elements by reading up with a good recent book on property letting & then getting things done, what you will lack is the experience that a good agent can provide and that all important gut feeling/bad person radar that a good agent can provide, which is worth an awful lot, IMO.

    I also agree that getting it wrong by selecting the wrong tenant can cost you a lot of money, heartache, anxiety and possibly getting a feeling of "what did we do wrong?" and/or "do we want to keep doing this?"

    I can tell you that after a few years of a learning curve, I realised that just as the wrong tenant can end up being a bloody nightmare (not that I have had this myself or anything remotely like it) equally, the right tenant can make your property letting operation a breeze & a joy.

    Choosing the right tenant is therefore the No. 1 element that you should look to get right and although a tenant reference report will reveal the information that can be revealed, what an experienced nose & gut can detect is never shown on any report.

    My advice.
    Spend some time interviewing 5/6 reputable local agents and do searches on how long they've been in business, seeing if there are any complaints/problems with any of them, etc.
    A good local agent that you strike up a rapport with is a valuable asset that will serve you well.
    Natural selection is a wonderful thing
    You shall know them by their fruit
    Saying "Never say never", says it

    Comment


      Having had some disastrous tenants by DIY a good LA can be worth the expense for vetting and drawing up Agreements. Management fees are tax deductible.
      When choosing a LA you need to vet them, check their Contract with you, fees etc & who does their/your repairs, scale of charges etc if management contract.
      Also worth joining Nat Landlords Assoc (NLA) for a year as they have a free advice line and on-line teaching modules for the newbie LL.
      Do a lot of research on being a LL before you buy to let, esp at the 'lower end'
      Remember rent is paid gross, so have some reserves for tax bill at end of year as well as ongoing repairs.
      If you state in which town you are renting, someone here may have knowledge of a suitable LA or 2 for you to check out.
      Private rented property is a minefield. Good Luck

      Comment


        Thanks for the advise everyone. Ive no problem with the management side I have good people skills and can do any practical stuff bar plastering and gas Its more the vetting side of things to make sure we are not going to have problems. A Couple of the LA's ive spoken to said that the checking systems they use come with a guarantee that if the T defauls on rent that you are covered for 4 months rent payments? If its easy enough for us as individuals to have access to credit checking systems I think we may try going it alone but probably not on the first let......

        Comment


          It is perfectly possible to carry out tenant checking oneself by using services of reputable companies like Tenant Verify (there are others) which advertise on this site. Good agents will do it conscientiously and the cost will be included in their commission. However, contrary to the information given by of 'Scrungy' above, many agents do charge the LL (and the T) a separate fee each time they check a T, so if you do use an agent check very carefully before you sign their contract what is included in their fees and what will cost you extra.
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

          Comment


            Originally posted by fridaypassion View Post
            As letting agents tend to have flat fees for advertising/tennant finding/vetting it makes the margins very tight at this end of the market potentially wiping out 40% of any surplus cash if we are changing tennants more than once per year.
            Tenant referencing is usually paid by tenants so why does it cost you anything?
            Also, where do you get 40% from?
            What makes you think that you will have to change tenants at all each year, never mind more than once per year?

            Comment


              Originally posted by DrunkenJedi View Post
              Tenant referencing is usually paid by tenants so why does it cost you anything?
              Also, where do you get 40% from?
              What makes you think that you will have to change tenants at all each year, never mind more than once per year?
              The LA's I have spoken to were more regarding marketing but they do packages where they advertise, get the tennants signed up and do the referencing for about £350-450 + Vat. If we change tennants twice in a year that would be about 40% of the rental income above the mortgage payments gone. I'd hope we get long term tennants but this is the kind of thing I dont know until we try it. The area where we are has a lot of transient population who some to work here part of the year or may stay for a year or two then return home.

              Comment


                Originally posted by fridaypassion View Post
                The LA's I have spoken to were more regarding marketing but they do packages where they advertise, get the tennants signed up and do the referencing for about £350-450 + Vat. If we change tennants twice in a year that would be about 40% of the rental income above the mortgage payments gone. I'd hope we get long term tennants but this is the kind of thing I dont know until we try it. The area where we are has a lot of transient population who some to work here part of the year or may stay for a year or two then return home.
                £340-450 plus VAT is a ridiculous amount to be charged by unqualified, unregulated non-professionals for what is effectively a couple of hours' work at most. There is a thread on the letting agents' forum of this site where an agent broke down what they actually do for a renewal of a tenancy (which is less work than a tenant find but the principle is the same - it's not much work!) and even at the rate they charge, it worked out at £70 odd per hour.

                http://www.landlordzone.co.uk/forums...ts-for-renewal

                My advice would be don't pay it unless you are desperate. Also, if your Ts do default and/or trash the place, the agent will not be able to help you sue them for the rent/damages because they are not lawyers, so re not allowed to. The best they will do (and that's only if they 'fully manage') is serve a notice or two, which is not difficult anyway.

                Not all letting agents are unprofessional and greedy - there are some good ones. But if you do use one, make sure it comes with a personal reference from someone you trust. And a quick scan of the thread titles in the Letting Agents forum of this site does, I'm afraid reveal a catalogue of woe, incompetence and graspiness.
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                Comment


                  I thought it was a lot but I guess the bulk of their charges are for the marketing, getting it on rightmove and that kind of thing. I guess its hard to market a property unless its with an agent? We are in a small town so although there isnt a lot of rental property I wouldnt know where to start our own advertising. Thats the kind of thing I hope I can pick up some tips on!

                  Comment


                    Originally posted by fridaypassion View Post
                    I thought it was a lot but I guess the bulk of their charges are for the marketing, getting it on rightmove and that kind of thing. I guess its hard to market a property unless its with an agent?
                    Well I advertise privately on Rightmove using an obliging agent as an intermediary (Rightmove don't like it and if they find out what the agent is doing are likely to ban him!) and it costs me £27 for a month, which is usually ample time to find a new tenant. I don't advertise anywhere else (not since the local weekly rag upped its rates to £40-50 for a simple advert!).

                    Try this thread

                    Comment


                      Renewal of tenancy agreement

                      I used an estate agent to find tenants for my property. I paid them an agreed percentage of the annual income for the tenancy which was for a year. My tenants paid their deposit to the agent to be held. We are now coming to the end of the tenancy agreement and my tenants want to sign for another two years. The agent keeps ringing me asking me to get in touch, but I just want to sort out the new tenancy agreement privately without paying the agent, where do I stand? If anyone could give me some advice I would be grateful. The agreement with the agent was for introduction only, no management.
                      Thank you very much.

                      Comment


                        Hi Pandabear,

                        If I were you I would check the contract you signed with the agency. I'm about to let my property out and this evening I have been reviewing their T&C's - on the first page it states that Introduction Fees are payable for the first 3 years of the tenancy. If I sign this, I am bound to it. Go over your agreement and double check what you signed up for. Once you know what you have agreed to you can then speak to the agent. Additionally, you may well be required to give notice to sever your contract with the agency.

                        Comment


                          Thanks for that, will check it.

                          Comment


                            Letting Agency Fees

                            I recently tried to tell my letting agent that i would like to start managing my own property and they said that i would have to keep paying them a management commission for the duration of the full tenancy and apparently this is in the terms of business which is backed up by a solicitor. The alternative would be to pay a contract release charge which equates to one monthly rent. the monthly rent is £600.00. Has anybody been in this situation before and how much have you been charged. Any help would be appreciated.

                            Comment


                              Originally posted by Dougie View Post
                              apparently this is in the terms of business
                              Never mind "apparently", what is in the contract which you signed up to?

                              Comment

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