Landlords thoughts on new agency scheme

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    Landlords thoughts on new agency scheme

    This is really for landlords who use an agent although I appreciate there are many who would rather not use an agent.

    Not wishing to advertise my agency but rather get a feeling for any thoughts on a new fee structure we are running. I have worked for lettings agencies for over 10 years but up till now in the Midlands where I work I have not seen this advertised before and wanted to see what Landlords would feel if offered this kind of service/fee structure.

    We are offering a full management package with fees as either the traditional method, ie: Finding fee and then a management fee based on the percentage of the rental income

    or

    as a one off fee at the beginning, I have been looking at approx. 130% of the months rent as a one off fee, this is paid on invoice when the tenants are moved into the property and then that covers you for a full 12 months worth of full management services. By using this scheme it means that as a landlord you can now receive the full asking rent for the property each month obviously achieving the full potential which in turn helps towards any mortgage payments. So now when we tell you the rent at the time of the valuation it will be the rent YOU receive, not lowered by management fees. It also works out cheaper than the traditional method if the agent is charging approx. 10%, a saving of anywhere between £75 - £200 over the course of 12 months.

    Any comments would be appreciated as we are always trying to improve business.

    regards

    Jason Guest

    #2
    Basic arithmetic leads me to the conclusion that what you are offering is not that great and it's hardly a groundbreaking new idea. I would feel the same pain parting with 130% of the first month's rent all in one go as I would do if parting with 10-15% of it every month.

    Suggestion : if you really want to improve your service to landlords, charge about one third to half of what you currently do. It may then start to look like reasonable value for what a letting/managing aegent typically does.
    '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


      #3
      Jason - as a landlord who always uses top quality appropriately registered and recognised letting/estate agents with a high street presence to find me tenants only, I see where you are coming from. As an experienced landlord who is totally happy to manage his own properties, this works for me but I can well see that some less experienced ones would appreciate the alternative that you are offering. I think many landlords who sign up for full management often ask themselves what on earth agents do for that 10% of the rent they deduct every month. After all, apart from handling the monthly rent, what else do they have to do? Usually, tenant complains about something and agent rings landlord to say that so-and-so wants reparing and landlord has to get on with it. Is that worth (say) £50 per month?
      Now, before any of the excellent agents who post here jump on my neck justifying how they earn their £50 per property per month, may I first assure them that in this I am being very, very simplistic and I am sure a good agent does deserve his full fee. But this is sometimes how it appears to a landlord.
      On the other hand, do you feel that you will be able to do everything that a good management agent does for a mere 130% of a month's rent for a whole year including finding the tenant?

      P.P.
      Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

      Comment


        #4
        I suppose the offer is not so much trying to entice the landlord with huge savings but more on the practical side of receiving the full rent each month though for example:

        RENT £525PCM

        OUR STANDARD FEES:
        FINDING FEE: £100 plus VAT
        MANAGEMENT FEE: 10 plus VAT

        TOTAL OVER 12 MONTHS : £857.78

        OR

        ONE OFF FEE: £682.50

        The one off fee is worked out inclusive of VAT so in actual fact it is entered in this case as approx. 110% plus VAT (not worked it out exactly, apologises)

        But I appreciate your comments, ty, I suppose none of us want to part with money.....

        Comment


          #5
          Originally posted by P.Pilcher View Post
          Jason - as a landlord who always uses top quality appropriately registered and recognised letting/estate agents with a high street presence to find me tenants only, I see where you are coming from. As an experienced landlord who is totally happy to manage his own properties, this works for me but I can well see that some less experienced ones would appreciate the alternative that you are offering. I think many landlords who sign up for full management often ask themselves what on earth agents do for that 10% of the rent they deduct every month. After all, apart from handling the monthly rent, what else do they have to do? Usually, tenant complains about something and agent rings landlord to say that so-and-so wants reparing and landlord has to get on with it. Is that worth (say) £50 per month?
          Now, before any of the excellent agents who post here jump on my neck justifying how they earn their £50 per property per month, may I first assure them that in this I am being very, very simplistic and I am sure a good agent does deserve his full fee. But this is sometimes how it appears to a landlord.
          On the other hand, do you feel that you will be able to do everything that a good management agent does for a mere 130% of a month's rent for a whole year including finding the tenant?

          P.P.
          Having worked in a number of different agencies and also having set up several agencies from scratch and now being in a position where it is partly my own business it is my intention to be able to offer the utmost. I appreciate a lot of agents say the same things but its one thing to work for someone and a completely different attitude you have to have when its your own business. It is hard to justify the fees we charge but what with proper 1/4ly inspections followed by email/letter backup, 24/7 phone lines, tenant re-location services, reliable contractors I would hope that I am in a position to better serve my clients than some agents who promise the earth but dont deliver.

          We also offer fully customisable services for those landlords wishing to manage their own property, if a landlord solely wants advertising or a schedule of condition with photos and video then we can offer it.

          It is a very competitive market, certainly from when I started over 10 years ago but like any business if you deliver what you offer eventually you hope to achieve the trust of those around you.

          Comment


            #6
            Originally posted by mind the gap View Post
            Basic arithmetic leads me to the conclusion that what you are offering is not that great and it's hardly a groundbreaking new idea. I would feel the same pain parting with 130% of the first month's rent all in one go as I would do if parting with 10-15% of it every month.

            Suggestion : if you really want to improve your service to landlords, charge about one third to half of what you currently do. It may then start to look like reasonable value for what a letting/managing aegent typically does.
            I would consider offering landlords a saving if they wanted the one off fee to entice that business,

            So if they wanted full management to offer either standard fees or a heavily reduced one off fee, maybe even below the 100% mark......

            Comment


              #7
              Originally posted by humbug1s1k View Post
              It is hard to justify the fees we charge
              Thank you for your honesty.

              You really don't seem to understand my point, though. As a LL, my heart does not leap with delight at the thought of handing a whack of money over to you all in one go (even with a bit of a discount), any more than it does at handing it over to you every month.

              THE PAIN IS THE SAME!
              '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


                #8
                Believe me I appreciate the pain of handing money over though unfortunately for me having to compete with all the other agents then I do have to charge otherwise I would not have a business. Also from a psychological point of view then it doesnt matter how good my service is people seem to be put off by extremely low fees, I suppose its the old adage, you get what you pay for, syndrome.

                Which is why I have asked for comments, which again I appreciate, as if I can improve my business for both landlord and tenant that I have suceeded, and if I can find a way to make that pain slightly more bearable for you as well by the service I offer then thats my job.

                Comment


                  #9
                  Originally posted by humbug1s1k View Post
                  Also from a psychological point of view then it doesnt matter how good my service is people seem to be put off by extremely low fees, I suppose its the old adage, you get what you pay for, syndrome.

                  Let me reassure you that although I make no judgements as to your personal effectiveness or otherwise, this adage is rarely applicable in your field. There is rather a general perception that with letting agents generallly you do not get what you pay for.
                  '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


                    #10
                    I appreciate that and if I can go some way to change that perception then I will, even it that means helping provide landlords with services to eventually be able to let and manage the property themselves, and at the same time provide those l/lords who have not got the time and inclination to deal with their investment/s the best possible service and more to justify the fees charged.

                    Comment

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