I have recently used online Agent Open Rent to find a new tenant for one of our Surrey homes. It is the first time for me, as I usually use an Agent for tenant-find and then self-manage.
I think I am a decent judge of character, but I was apprehensive about conducting viewings. I also wasn’t sure how much of my time it would suck up. And whether I would find the same calibre of tenant that an agent had produced in the past.
What I was in no doubt about was the saving I was going to make.
And avoiding the angst of constantly overseeing what an agent was doing to ensure that the administration, paperwork and required legal notices were being served appropriately. For which we as landlords are accountable.
If an online agent or ‘traditional’ agent makes a mistake the heavy hand of the Law ultimately hits landlords, even when an Agent has made the mistake. Some landlords perceive they have outsourced accountability for legal requirements, as well as the hassle, when they hand over their property to an agent. But the buck stops with the landlord.
Am I slating traditional Bricks-and-Mortar Agents?
Don’t get me wrong there are great Agents out there. In fact I used a new Agent recently on another home and was impressed with their service. It was their expertise that got my home tenanted swiftly and above the market price I had estimated. So Agents provide valuable intelligence on market rates and the way the lettings market is moving, as well as judgement calls on which tenants are appropriate.
However the agent I had used on this latest house, I have been with for over a decade. They have gone through 2 take-overs / mergers and become much bigger than the original company I started out with.
On the one hand new systems had been brought in which are much-needed in today’s audit-trail of accountability requirements. But merging systems doesn’t always work that well. And the separation of the different functions into individual departments and split geographies meant there were a number of handovers, between staff in lettings, management, administration. There was always a ‘weak link’ which inevitably caused a problem. I felt I needed to stay on the case and progress chase. To plug that weak-link gap and that sucked up energy needlessly.
And then there is the Tenant Fees Act. Don’t get me wrong, I think it is good that tenants don’t get hit with lots of surprise costs when they least expect, or can possibly afford it. However it means that Agents can hit Landlords with these costs instead.
Agents can use an enticing % rate for tenant find fee only to impose lots of extra charges. Fees like; contract set up, contract renewal, deposit protection or handling disputes, introductions to services e.g. Gas Safe contractors, document preparation. Or indeed charge the tenant find fee on an annual recurring basis, which soon mounts up.
I also tend to read the small print of Terms of Business. I don’t like the idea that by signing you may be obliged to agree to being introduced to the ‘partner’ services like tax.
What are the advantages of a landlord using an Online Agent?
I reckoned I could be saving about £2,500 by using a landlord online Agent like Open Rent in year 1 and more if the Agent’s model meant charging recurring introductory fees each consecutive year.
This Surrey home is Victorian and needs lots of maintenance. I had not been able to do certain things to the property I had wanted to because Agent fees impacted income in year 1 significantly.
By using an online Agent and making these savings it meant I could invest more into the property. This in turn makes it more appealing and rentable.
Analysis of the Online Agent Stats
Out of 40 enquiries 8 viewings were arranged, with one no-show. Of the 7 viewings there were 6 sets of interested tenants and one we proceeded with.
We also managed to get more rent. Yes the rental market is very buoyant currently. But the money we invested back into the home also made a difference.
Using an online, landlord-dedicated, platform is certainly a great alternative to using traditional bricks-and-mortar agents. If an Agent’s fees are getting out-of-kilter with the service they provide, consider it. However, for distance or remote property investors sometimes a local Agent may well be the optimum choice.
I am a landlord, ‘prudent’ property investor and developer. I help others to invest ‘prudently’ either with a bespoke Property Finding service or in a supportive mentoring capacity. If you’d like help or to find out more do message me firstname.lastname@example.org. Or connect with me here
My business Property Venture® is an award-winning, Boutique property consultancy focusing on helping time-strapped professionals and expats who don’t have the local presence, or capacity, to acquire the ‘right’ properties for them.Tags: #surrey, Agents, Buy to let, investment property