Letting Agencies and commission

by Readers Question

4 years ago

Letting Agencies and commission

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Letting Agencies and commission

Having moved into new build properties I now have to use agents for letting as the usual route – spare room etc do not cover the high rent I am now charging (do not have the tenants to pay the higher value). Letting Agencies and commission

I’ve seen a number agents and it’s just dawned on me that my usual route of 6 months then moving onto a periodic tenancy is not ‘suitable’ for them, they want 12 or 24 month contracts (which they have got for me on the last 2 rentals).

Whilst my tenancies are normally over this time (my tenants stay for years) I am in control of the tenancies, e.g. I can issue 2 months notice.

What I have fail to understand is how agencies and their commissions work – obviously if they get a 12 month tenancy they take take 12 months’ commission – but if it’s 6 months and rolling, how does this work?

Thanks

Elizabeth (Halequin Garden)



Comments

Mark Alexander

4 years ago

Hi Elizabeth

I totally understand why you would want to increase your marketing exposure for your properties by advertising on Rightmove, Zoopla, Prime Location etc.

What I can't get my head around is the rest of your question, I think you have been talking to the wrong letting agencies.

Agents generally make their money by charging fees based on a percentage on rent collected, as they are collected. Some agents also make money by charging landlords and tenants for lots of extras.

Take a look at what you can get for your money if you use our recommended letting agent >>> http://www.property118.com/property-management-checklist/67891/

I hope that helps.
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Harlequin Garden

4 years ago

Reply to the comment left by "Mark Alexander" at "16/10/2014 - 14:06":

I'm central London with all the big boys, so I don't think they are 'wrong', they all have the same criteria, they charge commission on the term - a year is a year's commission, and then for as long as the tenant stays at a slightly reduced level, as you've noted, I don't do management or rent collection (why would I do that!!) but having used the system where my ad it placed on Right Move, etc and not had one call, I have to use them, it's out of the market for the less ones as I explained. I object to paying £400 for them to draw up a contract but it's all pretty standard costs. I just wondered how they collect on a periodic tenancy, they are all pretending that they don't know what I'm talking about and say that tenants don't want to be on an 'uncertain term'.

I'll check out your link.

Mark Alexander

4 years ago

Reply to the comment left by "Harlequin Garden" at "16/10/2014 - 14:30":

Agents do charge more in London, for example Letting Supermarket charge a £200 additional fee up front.

Everything else you have been told is sales BS from companies who think they have a monopoly on the market. They are too arrogant to recognise the competition which will eventually knock them off their perches - and of that I'm certain. They are no different to BA when EasyJet first launched.

By the way, the founder of EasyJet is now getting into lettings too - see >>> http://www.property118.com/easyjets-stellios-getting-letting/68771/
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John Daley

4 years ago

Hi Elizabeth,

I often wonder on this site why landlords agree to the most onerous and exploitative terms from letting agents. And then complain here when their agents charge them mercilessly for stuff they have agreed to in writing..

They are not in charge of this .... you are. Its your business and your property.

So you can agree any terms you wish with an agent. If you want the tenancy to become periodic after the term certain, tell them that's what you want. You will save fees and your tenants will save a bundle, and like you rather better as well.

The cycling of fixed term tenancies is just a device to increase fee income, the AST was never intended to operate that way.

If your agent, who don't forget is bidding for your business, presents you with a 'standard' agreement just draw a line through every bit that you don't like with a pen.

Write anything you want into the agreement and sign it. If they want your business they will still agree, if not there is another agent nearby.

Mark Alexander

4 years ago

Reply to the comment left by "John Daley" at "16/10/2014 - 16:36":

Excellent post, spot on!
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Harlequin Garden

4 years ago

Thank you John, I haven't signed anything yet, having done it successfully myself for 20 years I'm just staggered by the amount they want and the charges for the essential add ons like a contract!

I'll be altering and will let you know if I end up with any agents who will deal with me, an interesting experiment.

Mark Alexander

4 years ago

Reply to the comment left by "Harlequin Garden" at "16/10/2014 - 17:48":

Why bother?

All you need is Letting Supermarket, they have several agents in London and are unbeatable on both price and service.
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