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Letting Agents Commission

Started by betsy-bleu, September 10, 2014, 12:58:13 PM

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betsy-bleu

Hi All,
I currently have two flats coming vacant in the next couple of months which means renegotiating with my/an agent for letting only.
One tenant has been in for three years where upon I paid 7% for the first year, 6% the second and nothing for the third.
Regarding the other flat, the tenant has only been in eight months but I agreed 7% for the first year on that one too and 6% for the second
which won't be applicable now.
My question is do these commission rates seem reasonable given I am using a high profile london based agency?
Particularly as now I will have two flats available to rent am I being greedy pushing for less??
Also is it usual for most agents to charge commission on letting only for a second year? After all its VERY easy money as they
do very little other than administration i.e. renewal contract.
I have absolutely no idea what other landlords pay and cannot find anywhere on here to help me compare my experience so
any help would be much appreciated.

Thanks in advance.

Hippogriff

Caveat for everything I write... I'm not based in London.

The rates I have negotiated down to are 6% for full management. Although I have never taken it on. When you say "letting only" do you mean Tenant Find?

So, they come around, take some photos, upload them to their website and portals, they handle the initial enquiry from the prospective Tenants, maybe they do the viewings for you, they then recommend someone to get referenced and credit checked, they do all that for you, then they provide an AST, assuming you don't want to use your own and - possibly (not recommended) take and protect the deposit? After that, you're on your own?

That kind of service can be had for around £150 or less... but that's a one-time thing, not an ongoing monthly outgoing... even in the first year, never mind the second or third or whenever.

Maybe you can clarify a little bit and I'm pretty sure that others will pipe-up.

betsy-bleu

Thanks for the prompt response!
I assume 'Tenant Find' though the agents T & C's is titled 'Letting Only' Service. They are a well know company with several branches in London.
They carry out all the items that you have listed including getting references and credit checks, AST, carry out viewings and take the deposit and protect it.
I do my own photography (preferred) and submit said photos for uploading and arrange the inventories. ......and yes after that I'm on my own until renewal time,
whereupon they write to the tenant asking if they want an extension.
In my case, for the second year tenancy,  was having them write up an Extension Agreement for a charge of  6% commission on the yearly rental.
The third year I only paid an admin fee of £150 for the Extension Agreement.
The yearly commission is due in full at the start of the tenancy agreement so my first months rent and part of the second are swallowed up by this before I actually start earning an income.

I have looked at internet based 'Letting Agents' websites  which offer one off fees  but as these are two high profile  2,000 sq ft apartments in central London am unsure whether they would
attract the right sort of clientele who are prepared to pay what they are worth.

Hippogriff

What the apartments are priced at is what they are priced at. Whichever means you use to market them doesn't change their asking rent.

7% for Tenant Find sounds great... for them. 6% for nothing sounds... wow! Remember, you're the shark, they're just the remoras.

I advise against any Agent looking after the deposits for you.

Martha


betsy-bleu

Thanks Hippogriff....I see your point.

Yes, 6% for doing almost nothing is daylight robbery but find me a London agent who doesn't charge that sort of commission on a second years tenancy.
Thus my mission today.

As I'm a newbie to this, If theres anyone that deals with London letting agents who would like to offer up some percentages they've managed to negotiate it would help give me a guideline.

Martha, how interesting....my agent bears a striking resemblance to yours !

Pete

Why not use an online agent. Flat fee (£69 + VAT or less) and they do initial contact screenings, financial checks and references on chosen tenants, contracts etc. All you have to do is supply photos and advert details and decide which potential tenants to show the property to and then choose the best. If you choose an annual contract that after a year becomes a rolling contract you don't have to pay renewal fees. I'm not in London either but surely the same principles apply.

There is also a mass of really good advice on this site, so well worth taking the time to read through.

Good luck