UK Landlord Forum / Life

Hi everyone,

New here.  I have a question regarding management fees.  I pay 12% for full management of my property as I work abroad a lot of the time.

This month, I accidentally received another landlord's monthly statement from my agents and I noticed that they only pay a 4% fee.  Their tenant has not just moved in as it is about a quarter into their contract, so this is not a renewal fee or anything. 

Can I say something to my managing agents?  And if so, how do I broach it without them passing the lower percentage off as a late renewal fee or just a rent collecting fee (which is normally more than 10%).  Basically, can I negotiate a lower fee from this as I feel ripped off paying 3 times what this landlord does.

Any advice would be appreciated. 

Many thanks!

I am in the same position as you - I live / work in the Far East  and have a couple of properties rented, I'm paying 13.5% for the agent's "fully managed" service (they did originally want 15% but I negotiated). I've spoken with a couple of other landlords and especially after seeing your post I've now concluded that the best way to increase our yields is to get this fee reduced - We have great tenants so don't want to lose them by hiking their rent. Not sure if the market moved since we appointed the agent or maybe we just got slightly ripped off at the time!

I think 10% would be a good target for a fully-managed service fee if you can negotiate it - this is what I will ask for, although despite my grumbling I actually do get good service from the agent so I don't want to go elsewhere. 4% is totally unrealistic though, are you sure this refers to a fully managed service and not just rent collection? Either way it's worth mentioning to the agent come renewal time you want a discount, your argument I'm sure will be helped if the agent hasn't had to do much (ie respond to any / many queries from tenants) during the initial contract term.

Hope this helps In some way, other people with more experience in this area may be able to add their tuppence worth too and give you a range of opinions.

I once negotiated 6% for full management, but I still didn't take the Agent up on it. This offer was after the Agent came to visit the property and saw everything was in really good nick and assumed, rightly, they'd have to do very little if they got the right Tenants (not ones who call up for every little thing)... so they offered 6% as it was "money for old rope"... 

13.5% is being ripped off. 15% is being ripped off even more. 12% is being ripped off.

8% to 10% is a good - negotiated - position for full management. Some Letting Agents start at 10%... one doubts that they are any better or worse than the others.

How do you approach it? Balance out their effort for their reward in your contact... if they've done nothing - literally nothing - for you over the last year use that to help justify why you want to continue having nothing from them, but at a cheaper price... if they've been involved in all sorts throughout the last year (from Tenant queries to broken boilers) then they're likely to be less interested in reducing their income when their effort is actually high.

I work away alot aswell and at the moment I am with an agent and pay 10%. I am thinking of getting rid of them and managing it myself which is a little concerning.
I would just ask them if they can lower the fee. As someone else said if they do nothing then ask for a reduced rate or just look around and go somewhere else. After all your the client. The agents will all want a piece of it so you can look around for something better.

Hi everyone,

Thanks for your replies.  I am going to try to negotiate a 10% fee instead of 12%. 

My agents usually have to deal with a couple of emergencies for me every year i.e. broken boiler, floor leakage from blocked drains (I have a basement flat in a Victorian building), to a couple of more minor things.  Apart from these, they do pretty much sod all. 

However, they do make monetory mistakes, such as not noticing when my tenants didn't pay the rent increase and didn't correct it for 2 months even after I told them, taking off money from rent owed for contractor invoices when I settled these invoices myself with the agents knowledge beforehand and a few other incidences.

Anyway, I will see how I get on.  Hate being ripped off, especially by letting agents, but I have no choice but to give my property to an agent to fully manage as I am hardly ever in the country these days.

If anyone else wants to chime in, please do. 

Many thanks!!

Demand 8%, but settle for 10%. Cite the reasons you've included here.

But - I would also say - a couple of emergencies each year is quite a bit of involvement on their part. It's a bit more than absolutely nothing.

Hippo, this is exactly my strategy, it just so happens that one of my properties is up for renewal so I have just sent an email to the management company to this effect. I will report back here on how I get on!  Jhels why not do the same so we can electronically high five each other if we get a result?

On a side note, I've gone through the contract the management company issued to both myself and the tenants for another property of mine and there's nothing specifically addressing what happens if I terminate the management company's services (eg an ownership clause on the tenants preventing me from taking them to another supplier), so what would happen if I found someone else who was cheaper mid-term? Could I just advise all parties and get the new management company to issue a fresh AST agreement for the tenants to sign? Any ideas people?

You might have a good Agent there, then... a lot of them do try to enforce such conditions about termination. If this Agent doesn't, then it might be fair-minded one who is confident in its abilities to retain the business of Landlords. Of course, they might be complete amateurs too... but I'll assume the best case instead.

Hippogriff - thanks for your advice, much appreciated! 

Dj_efk, look forward to your report back.  Did you ask for a specific percentage discount?  Or just a general reduced rate?  I will report back also.

I asked for 8% first thing on Monday and nothing heard back yet, i think I will start calling today...

Personally I would take the letter and sit down with them and ask them to explain the difference.

Bullshit about long term relationship building, trust, hope to grow the business with them but feel dissatisfied etc etc .

Get in a paddy and demand they back date all your fees to 4% from the start of your agreement.

Compromise on 4% moving forward.

Or what ever the actual facts of the other landlords situation deem you should be paying in a fairer market.

Guys, apologies for not reporting back sooner.

I got the agents to agree to 10% and 11.5% on my two properties - the latter to be fair does seem to have things needing to be attended to on a fairly regular basis plus the tenants change on average every 18 months whereas the other property has always had the same tenants and needs much less attending to.

I'm happy with this as the agents do a good job and are responsive. Never really had a problem with them, so although I could go to someone else and save on a couple of %, I can't see this working out as a good move.

You don't ask, you don't get eh?

If you are happy with a letting agent, you need to tell others, they seem a very rare thing.

Quote from: Riptide on June 01, 2015, 01:07:37 PM
If you are happy with a letting agent, you need to tell others, they seem a very rare thing.

Bone dry. But very funny