Fee Free Property Letting

by Mark Alexander

15:56 PM, 5th January 2012
About 7 years ago

Fee Free Property Letting

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Fee Free Property Letting

Would you be sceptical of an advert for fee free letting?

Being a landlord for over 20 years has made me a bit sceptical so when I first heard about a fee free property letting offer my gut reaction was “what’s the catch?”

It was obvious to me that the only way anybody could offer a free letting service via all of the following portals was to charge the tenants and to have an upsell agenda.

  • Rightmove
  • Prime Location
  • Globrix
  • Find A Property
  • Zoopla
  • Homes24
  • etc. etc. etc

Curiosity always gets the better of me though so I decided to dig a bit deeper. I went onto the website of the company offering the service and I read their terms and conditions very carefully. The bottom line was that if the landlord deals directly with the tenant and cuts the letting agent agent out of the game they charge the landlord £500. Does that mean they are charging the tenant £500 for referencing and producing a tenancy agreement then, I thought. I checked very carefully and there was definitely no requirement to employ the letting agent for long term management so I knew that wasn’t the catch.

I couldn’t just leave it at that, it’s not my nature to allow my scepticism to ruin an opportunity so I emailed the company concerned. They telephoned me today and I had my opportunity to dig deeper still.

It turns out that they are a relatively new business and are offering this promotion as a bit of a loss leader to gain brand awareness. Nothing wrong with that of course, the supermarkets do it every day. I asked how much they charge tenants for referencing and the answer is £99 including VAT. They don’t charge tenants for anything else and its up to the landlord whether they choose to use the agents tenancy agreement. OK, fair enough I’m thinking, that’s not the cheapest I’ve seen but it’s by no means the most expensive either. In fairness, if a tenant which they had found for me seemed decent enough, passed all the credit checks etc. and wanted my property, but these fees were the sticking then I’d probably subsidise them myself.

I’m going to give this a try the next time one of my tenants serves notice. What have I got to lose?

I did wonder whether the letting agent charges the fee to introduce the tenants to me but I’m assured that’s not how it works. The explanation I was offered was that they put us in touch, I show them my property and if I choose to do a deal then I simply refer the tenants back to the agent for the referencing. Can’t say fairer than that.

So in summary I now see this as being a decent offer, possibly a very, very good one and a very cost effective way to source tenants.

I’ve not named the letting agent because I’m hoping to get them to advertise on Property118. I’ve decided to write this article now though to demonstrate interest levels in this service from readers of Property118.com to them, so if you are interested in knowing more please leave a comment below. If enough comments are left, they will advertise and I will add a link to their website here.

What do you reckon?



Comments

Doreen Marr

0:51 AM, 6th January 2012
About 7 years ago

I would like to know the name and contact details of this company so I too can check this out. Sounds like a good deal.  I shall shortly have a property become available and will need to find a tenant. I would like to know which company they use for credit referencing? 

1:00 AM, 7th January 2012
About 7 years ago

Does the £99.00 include a RGI policy for a year.
If not it is cheaper to use discountletting and the best insurance  RGI policy.

Mark Alexander

9:44 AM, 7th January 2012
About 7 years ago

I too am a fan of Discount Letting. They have lots of testimonials in the Gold Business profile in our Directory too. I think you are comparing apples with oranges though. This company don't charge for advertising so this removes 100% of the up front risk money. They only charge £99 to the tenants for referencing if you decide to take the tenants on. Unless you decide to pay the £99 for the tenants then it's actually cheaper as it's cost you nothing. Must be worth trying them, I will be. I'm not sure whether they offer RGI along side referencing but I have put them in touch with Let Alliance who I also rate very highly and as agents they will be able to access their products. It will be interesting to see if they decide to advertise in our Directory and get testimonials. If they do I will obviously support them further by revealing their identity and creating a link to their website in the form of an update to this article. I will also put this article in our newsletter to give their business a massive boost, just as I have done for Knight Property Management and their ebook.

22:29 PM, 7th January 2012
About 7 years ago

Perhaps I have confused issues.
For the RGI policy on my tenant I had to pay £99.00 for the 1st year.
I had not thought that I could say to a tenant that they would have to pay for  the RGI policy that I required therm to have.
I still don't think it is fair to charge a tenant for a policy that I insist they have to pass or I won't tkae them on.
If they fail then the tenant would pay and have lost.
Perhaps I am not being a very good businessman!!?
This includes the referencing which is carried out by the RGI company themselves
The following year there would be NO requirement for a credit check providing the tenancy circumstances remained the same.
This covers £50000.00 per claim including legal expenses.

I belive the underlying underwriter is the well known motoring legal expenses company, DAS servces.
I believe another good policy is with justlandlords.co.uk and totalandlords.co.uk
I never got anywhere with that Alliance company.
Perhaps you could encourage these aforementioned providers to list on your site.
This on the basis that you could make a convincing business case to them as your site and it's popularity amongst landlords would I am sure drive traffic to them.
This as they are considerably more competetive than other longer established players such as H-----t anf L-----e.
 

Mark Alexander

23:24 PM, 7th January 2012
About 7 years ago

Funnily enough I invited Let Alliance to sponsor The Good Landlords Campaign this afternoon so fingers crossed. I think they are partially underwritten by DAS too for their RGI. I don't necessarily think you are a bad businessman for not charging letting fees Paul. I suppose it depends on your property type, tenant profile and demand in your area. I've been charging £150 for each new tenancy for years to cover the cost of referencing, tenancy production and RGI. Some tenants don't like it and that's fine, I am lucky enough to pick and choose and if they don't like it they can go elsewhere. I always look at objections to these fees and a possible disaster averted and move on to prospective tenants whop expect to pay them. My fees are a lot cheaper than the agents in my area.

1:20 AM, 8th January 2012
About 7 years ago

Perhaps you might also consider  A Good Letting Agents Campaign, inlight of the recent postings on this site regarding LA issues.
I don't think other accreditation systems have been very successful.
Perhaps you good persuade LA to piggyback effectively on the Good Landlords Camapaign.
I am sure reputable LA would love to have an association with your Landlord scheme.
Re my situation, I charge 1 months rent in advance plus 2 months rent as deposit.
protected under the mydeposits scheme.
I don't charge ANYTHING for production of related paperwork at any time in the tenancy unless a tenant wishes to change it ;  in which case I charge £30.00 as the DPC as to be reprotected.
If a tenant want another 6 months AST and I agree I again charge £30.00 for the DPC to be protected again.
I don't feel I may charge for a RGI which is protecting me from tenant defaults, the same as contents and malicious damage insurance.
The reference part is only £10.00, so I pay that.
Plus I am on site with the majority of my flats and therefore I can drive 40 mins to my other house.
For a little bit of inconvenience for my small portfolio it is worth me doing things myself; but I appreciate such circumstances  management are not want some LL would wish to do.
I appreciate I am only running a few properties and were I running as many as you I think I would be inclined to follow your methodology.
I think as has been mentioned eslewhere on this site tenants are looking for tenancies where the fees ideally NIL.
This is why they are trying to access LL directly.
Though I take the point that this maybe as a result of them thinking that individual LL might be less diligent in referencing them.
This is why the message re LRS and tenantid and the necessity of RGI should be impressed upon individual landlords, who I think are in some cases so many lambs to the slaughter by iffy prospective tenants.
I have to admit I was one of those LL; but never again, I have learnt my lesson.
I just wish I knew about your site then.
I don't believe I would have made half the mistakes I have done so todate!!!??

2:46 AM, 8th January 2012
About 7 years ago

As a possible way of addressing genuine tenant concerns regarding putting down roots etc.; would it be appropriate to perhaps supply a copy of the Land Registry entry for the rental property and attach to the AST.
I appreciate this doesn't stop a LL selling at any time;  but it would give confirmation as to the owner of the property, namely the LL and also the mortgage term if any on the property.
Or would I be naive in providing that sort of info to a prospective tenant; just before they signed a AST or even perhaps well before to assuage any concerns they might have as to a Good Landlord!!
Thoughts anyone?

2:52 AM, 8th January 2012
About 7 years ago

And just a thought as I have mentioned Land Registry.
I am sure I am teaching all you  existing LL to suck eggs here;  but
I am sure ALL landlords have advised Land Registry of  a correspondence address for ALL their rental properties ; which means NOT the rental address..
Also advising LR of at least one email address.
You may register up to 4 addresses; email or otherwise that LR will communicate with if there are ANY changes attempted on your legal title of ANY of your properties.

Mark Alexander

9:58 AM, 8th January 2012
About 7 years ago

I have invited the NLA and Eastern Landlords Associations to get involved but they have been very slow to respond.

Your comment regarding two months rent up front as a deposit concerns me. Do you realise that you are creating "Premium Tenancies" by doing this?

If you don't know what these are then check it out with your landlords association. The bottom line is that you can't stop your tenants sub-letting if you take more than 7 weeks rent as a desposit. I take one months rent up front, 6 weeks rent deposit plus £150 lettings fee.

Mark Alexander

10:14 AM, 8th January 2012
About 7 years ago

I would happily do this is requested, but I never have been. I wouldn't offer this voluntarily though, especially is there is a small mortgage or no mortgage. I've heard of con artists stealing identities of landlords in such circumstances and selling the property. I spoke to a chap who this happened to very recently, he was the buyer and has lost £250,000. He's in the process of getting a solicitor to sue his solicitor and the vendors solicitor. All VERY messy and very worrying for the purchaser. I've not heard how it has affected the landlord yet. The purchaser has declined to allow me to publish the story at this stage for fear that it could somehow prejudice his legal claims. I don't have such a problem as I have big mortgages on all of my properties so I'm not a good target for these types of crime.

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