Cutting out the middle man (Letting property without estate agents)

by Readers Question

9:49 AM, 30th January 2015
About 4 years ago

Cutting out the middle man (Letting property without estate agents)

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Cutting out the middle man (Letting property without estate agents)

I am a Landlord with a small portfolio of properties in London (mostly within Zone 2). I am using the services of various estate agents but after experiencing everything from bad tenants to having to do everything myself (despite signing up for a “management service”) – to put it bluntly, I feel ripped off, and I don’t feel that estate agents represent value for money. Cutting out the middle man Letting property without estate agents

Without going into all the details, and to get straight to the point, I want to take all of the properties off the estate agents and managing it myself. I am doing all of the work already as it is, and I am paying estate agents on average, in excess of 10% of my rental revenues for the privilege of running around like a skivvy.

The service I am looking for is a simple introductory (and possible viewing), where tenants are vetted (i.e. referenced) – and ideally, the service provider does the property viewing (i.e. showing prospective tenants the property). I am aware that Estate agents provide a similar service, but those I have spoken to so far, want to extract a commission for as long as the tenant remains in the property (even though I will be doing everything from rent collection to management). I want to pay a one off fee (“finder’s fee”, if you like). I’m not interested in paying a recurring commission.

I would like advice from Landlords in London who manage their own properties, on the following details:

1. How do they get their tenants (remember if using third parties for this, I am only interested in paying a “one off” fee)
2. What kind of reference checks do you do (any specific reputable reference agencies?)
3. How frequently do you inspect the property once its let out
4. Do you have the frequency of inspections as part of your AST agreement?

I would be very grateful for any advice from London landlords – who have experience in this matter.

Many thanks

Ronald



Comments

Mark Alexander

9:52 AM, 30th January 2015
About 4 years ago

Hi Ronald

I enjoy this level of service and a lot more for just 4% of rent and no up front fees.

The company I use charges a one off £200 premium for tenant find inside the M25.

I was so impressed with the company I acquired a stake in the business!

See >>> http://www.property118.com/letting-supermarket-amend-pricing/68829/
.

Joe Bloggs

11:47 AM, 30th January 2015
About 4 years ago

we do all ourselves. we advertise via the cheapest portal, filter tenant phone enquiries, meet, reference, protect deposit, draw up TA etc. works very well. we have good tenants who appreciate lack of extortionate agents fees. this also allows us to charge higher rents than agents as we dont levy any fees.
would not want to go back to using agents.

Kate Cotterell

12:21 PM, 30th January 2015
About 4 years ago

Hi Ronald

I have 4 rental flats near Canary Wharf and like you I am very reluctant to use an Estate Agent due to the lack of value for money they provide and the fact that as I have a vested interest, I do a much better job.

I used to always advertise on Gumtree, Openrent, Rentify etc (there are a host of other new websites) and always found a tenant myself, did the reference & credit check, have my own contract & inventory, so basically settled the tenant in myself. I do inspections every 6 months or so but have a very open door policy with my tenants in that I encourage them to let me know about any niggle no matter how small, which I promptly fix. However I work from home and live in the area, so easy for me to drop everything and sort stuff out. (I see specialised sites like Openrent will do ref & credit checks for you now for a fee).

I have noticed that over the years, advertising myself, I have been getting enquires from a lower grade of tenant ie. they are having to rent from private landlords as they couldn't register with an estate agent as wouldn't pass their checks ie. self employed, bad credit history, no references, students etc. However, what has countered this is that there is generally a lack of rental stock in London and so estate agents now check these websites and I get up to 20 calls from them per advert. I'm quite tough with them as the smaller, less reputable ones always say they have clients but it usually turns out they don't always but promise you the world as they need to boost their portfolio and have to be cheaper than the big agents. I say the same thing to them all, that I don't want them to advertise my flat but if they have a very strong potential tenant , they can run their details past me and if ok, then show the flat. I also stipulate that I will only pay a finders fee of £1000 if I like the tenant. I usually have calls from small start up agencies to the very established big name ones and if they have the clients but not enough flats, it is better for them to get a finders fee rather than loose the client to another estate agent who does have stock. I think it also helps that they contact me and so I can stipulate my terms up front.

Definitely over the past couple of years I have found this works well for me. I can still find a tenant myself if a good quality one approaches me through my ad and not have to pay anything. It also allows estate agents that have a client/s but not the stock to approach you and as they've approached you, it's easier to negotiate your one off fee. I do think this only works because I live in a strong rental area where demand often outstrips supply, so estate agents are willing to do deals. It also only pays off if your tenant stays a few years as that finders fee is regardless if they stay 6 months or 6 years.

At the end of the day to get the best possible tenant you still have to view them yourself as you do get a gut feeling by meeting people. I would never just let an estate agent view on their own and choose a prospective tenant on paper.

Hope this helps.
Rgds
Kate

Recardo Knights

12:43 PM, 30th January 2015
About 4 years ago

As I live in Croydon and my BTL's are in East Anglia, I use letting agents to advertise, reference. and provide a 6 month tenancy agreement. They vary from £250-350 for this service and also do the viewings.

if I am in the area doing a refurb I do the viewing myself. Read their tenancy agreement and add any changes if not happy. At the end or tenancy I issue my own Agreement or let it roll on to a periodic, so no more fees or involvement with letting agent.

I also do my own inventory (written) and provide a dvd to the tenant (saves disputes later)

The agent takes the deposit and 1st months rent a week or 2 before the tenant is due to move in, and sends me the balance less their fee. I protect the deposit to keep control and send the required info to the tenant. They have to sign a copy of this as proof that they received the DPC and prescribed info, to save further problems.

Stephen Reynolds

12:48 PM, 30th January 2015
About 4 years ago

Hi Ronald, I have 5 properties in Hackney that I have been renting out for 10 years and when folk ask me about managing them I tell them the same thing. I do it all myself as the likelihood or being ripped off by a tenant that I have met is maybe 1% whereas the likelihood of being ripped of by an estate agent is closer to 99%. As others have said tenants really appreciate not being ripped off with dodgy fees and all the other bs that agents hit them with. If you keep your rents reasonable and your properties well maintained you will have tenants biting your arm off. Most of mine only ever move because they are leaving London. My longest void in ten years has been half an hour.

Regards
Stephen

Mark Alexander

12:49 PM, 30th January 2015
About 4 years ago

Reply to the comment left by "Recardo Knights" at "30/01/2015 - 12:43":

Hi Recardo

Please help me with the maths.

You say that it costs you around £250 to let a property by doing all the work yourself. Does this include the cost of a professional inventory at check in/out? How much is the cost as a percentage of your typical rent for a year?

The reason I ask is that it may not just be more economical to you to do what I do, it will also save you a whole lot of hassle and provide you with another level of protection, i.e. the agents Professional Indemnity insurance.
.

Ian Cognito

13:37 PM, 30th January 2015
About 4 years ago

Reply to the comment left by "Kate Cotterell" at "30/01/2015 - 12:21":

Hi Kate

I advertise for new tenants on UPAD. My ads include a clear description of the type of tenant I'm looking for. In general, I get higher quality responses via the property portals (usually Rightmove or Zoopla), whereas those through Gumtree are "lower grade" to coin your phrase, that I don't bother pursuing.

Mark Alexander

13:41 PM, 30th January 2015
About 4 years ago

Reply to the comment left by "Ian Cognito" at "30/01/2015 - 13:37":

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I se there are a lot of new members reading this thread. Please allow me to introduce myself, I am the founder of Property118.com - WELCOME 😀
.

Yvette Newbury

14:06 PM, 30th January 2015
About 4 years ago

I advertised on Upad and have always been very pleased with the service. I trialled Rentify once and it was a disaster so won't try that again, but it may work for you.

However it is not always convenient for me to rent out the property myself so when I am in that situation I have set up an agreement with Martin & Co.. Tower Bridge for Let only and find them very flexible. Previously I tried other well known estate agents on the lettings side and was sorely disappointed with their service (always for Let only) basically telling the tenant one thing and me something else!

If you don't want to pay renewal commissions then negotiate this in your initial discussion with the agency.

I have been very pleased with Martin & Co. Tower Bridge for their service, and I never thought I would be able to recommend an estate agent for lettings, so it takes a lot for me to say that! The agency do the reference checks, but if the person is from overseas I have set up my own means of checking and so far that has served me well.

We inspect every 6 months unless something alerts us to check more often. To be honest we often find there is another reason we need to visit (eg. washing machine problem etc) so we roll our inspection into that visit (alerting the tenant beforehand we will be doing that of course).

andrew sheppard

15:01 PM, 30th January 2015
About 4 years ago

Hi, I have used various online platforms but find urban sales and lettings good value. I look after my own properties but joined the national landlords association and can use all of the up to date contract documents etc for free. I do my credit and reference checks through the nla. i get a good relationship with tenants and ensure they get good service. We inspect after 7 weeks and then twice per year or when called out. It can be hard work, it can be time consuming but also it can be worth all the effort to see happy tenants.

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