5 Killer Questions to Choose a Letting Agent

5 Killer Questions to Choose a Letting Agent

18:06 PM, 6th August 2014, About 7 years ago 60

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I am keen to hone the “Killer Questions” that we can advise landlords to ask when choosing a Letting Agent. I have five as a starter, but if any of you have others that you would rate in the top five please let me know!! 5 Killer Questions to Choose a Letting Agent

  1. What is your average void period across your managed portfolio? And you non-managed?
  2. What stock do you have available to let as an average, and how many lettings negotiators do you have to let them?
  3. What percentage of tenants deposit do you return as an average across the last year? And what is the biggest area of contention?
  4. How many clients have you lost to a competitor over the last 12 months, and what was the principal reason for their defection?
  5. Why should I instruct you rather than any other letting agent in this area?

I would be very keen to hear from landlords, or others, to improve my list ….. thanks!



Comments

by Mark Crampton Smith

11:17 AM, 9th August 2014, About 7 years ago

Reply to the comment left by "Roger Lancaster" at "08/08/2014 - 23:12":

Two excellent questions Roger....... I completely agree that few agents even consider these key indicators. Nonetheless, most will be using software that can produce reports answering almost any question. Any decent agent will be registered for data protection..... what about a Freedom of information request in writing? If they do not get back to you in the prescribed time frame, that would be a clear answer. Or, if as Mark suggests they lie, and you instruct them on data that does not them match your experience, the agent would be on very thin ice?

by Mark Crampton Smith

11:23 AM, 9th August 2014, About 7 years ago

Reply to the comment left by "Jill Lucas" at "08/08/2014 - 17:28":

Spot on Jill, if you manage the details, and focus on the small things and deal with them fast, there is seldom opportunity for a big problem to manifest itself.

by Roger Lancaster

9:57 AM, 11th August 2014, About 7 years ago

Reply to the comment left by "Mark Crampton Smith" at "09/08/2014 - 11:17":

Hi Mark

Pleased you agree with the approach and though Mark Alexander is right that Agents can lie about their figures but by asking to see the evidence you will quickly be able to assess how comfortable they are with the information they have given you. If lying they are unlikely to have prepared detailed falsified records to back up their claim and could open themselves up to charges of misrepresentation and fraud if they did.

These two figures are crucial to the performance of a landlords portfolio and as such all agents should be aware of their landlords and their own overall performance in respect of these indicators.

by Mark Crampton Smith

10:20 AM, 11th August 2014, About 7 years ago

Reply to the comment left by "Roger Lancaster" at "11/08/2014 - 09:57":

All true Roger; I do believe that the question about average length of tenancies will vary dependent on where an agent is operating and in which market. We let and manage over 150 student HMOs and this skews our tenancy term averages. We have certainly found that our average tenancy term has risen dramatically since we stopped making any charges to tenants for renewals (two years ago). Tenants talk to each other, and long term tenants who have to pay renewal fees every year (or six months in some cases) have come to us to reduce costs.
A question to confirm average void periods also adds to the picture here.....If the agent has maintained excellent relations with the tenant, such that they are actively helpful with marketing, we find that voids can be kept down to an average of under 3 days per year.

by Ian Ringrose

11:31 AM, 11th August 2014, About 7 years ago

When a tenant gets a letter asking them to pay a renewals fee and sign a new AST, it does prompt them to consider their options. So just letting a tenancy run on without expecting the tenant to take any action is likely to lead them to never getting round to looking at other properties.

I consider the question about average length of tenancies to be very valid; any good agent will be able to split this down into different types of lets. As all the agents being consider will be in the same area and most likely will do with the same type of properties, as the landlord would have so targeted the agents that are experts in their type of property.

by Mark Crampton Smith

12:11 PM, 11th August 2014, About 7 years ago

Reply to the comment left by "Ian Ringrose" at "11/08/2014 - 11:31":

Thanks Ian..... Looks like we are getting some consensus here. We all agree that the tenancy length is a powerful indicator. Here in Oxford, it is generally not a good idea to allow tenancies to go periodic as the market is so closely aligned to the academic year. We have had some of our longest voids when periodic tenants have given notice and vacated in Late October or November....... The market here goes very quiet until the New Year. We tend to offer a renewal on a fixed term (at no cost to the tenant) then should they seek early release we advise our L/L to agree subject to finding suitable replacement tenants. That way rent will be paid until new tenants move in.

by Roger Lancaster

13:28 PM, 13th August 2014, About 7 years ago

Reply to the comment left by "Mark Crampton Smith" at "11/08/2014 - 12:11":

Absolutely agree with both you and Ian about the different tenancy lengths and the skewing effect these would have and I would hope portfolio landlords or HMO landlords would be savvy enough to recognise this. My real concern is that too few landlords even ask this question and appreciate the significant effect it can have upon their income. It is not difficult to produce a little spreadsheet calculator that can demonstrate the effect of doubling tenancy length on overall profit margins.

The same applies to % of rent collected for portfolio landlords. As far as I am aware the question is never asked. 1% difference on a 20 house portfolio on average rents is £1200 plus per year. My experience is that most agencies collect on average less than 95% of the rent due (£6000 straight of bottom line) and when voids are taken into account as well as missed payment it is significantly worse.

Landlords need to start asking these questions and then moving their business to those that can give them the evidence. At that point landlords might start getting the service they should expect and require and standards in the sector would rocket.

by Ian Ringrose

13:37 PM, 13th August 2014, About 7 years ago

My experience so far has been 100% rent collection for all of my properties; the two properties we have rented out longish are with agents, but they are “higher end” then what a lot of landlords have.

Long voids when new tenants need to be found has been an issue, they have mostly be due to a short term drop in the local market with the agents not know if it is just a bad few weeks, or if rent levels are going down.

by Mark Crampton Smith

14:42 PM, 13th August 2014, About 7 years ago

Reply to the comment left by "Roger Lancaster" at "13/08/2014 - 13:28":

You are correct....... I have never been asked either question, although we do tend to make sure we impart this data during our market appraisal. I would still be concerned about being too attached to length of tenancy in isolation from void data; in Oxford, our average void is less than 3 days per year, my experience is that L/Ls would rather not propose a rent increase than risk loosing a tenant........ this of course suits most agents as there is less work....... I would be concerned that even a 2.5% increase would generate equivalent of 10 days rent and across a portfolio.........?!?!

by Mark Crampton Smith

15:04 PM, 13th August 2014, About 7 years ago

Reply to the comment left by "Mark Crampton Smith" at "13/08/2014 - 14:42":

@Roger....... Just done a snapshot of our "rent not collected" for July and August..... We collect on 1st of the month, and the average is 5.36% not collected on 1st.......... by the end of July (and June) the average is down to under 0.5% going into "arrears" The way we manage arrears is to offer early release to tenants who are not able to pay their rent (Oxford is in the top 10 places in the UK of rent as a proportion of earnings) this is generally welcomed by tenants, and usually prevents arrears exceeding deposit sums held.


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