Hi,
I'm about to rent a furnished studio flat (my first ever such deal). I'd like to have a letting agent fully manage it, and it will probably rent for
500-550 pcm.What percentage should I expect to pay to the letting agent for full management?
What should I watch out for? (contract-wise? deposit-wise? letting agent charges (e.g. cleaning) etc?)
Anything else I should know?
Thanks,
Fred.
Well, in my experience, that's your first mistake. If at all possible do the letting direct, agencies just add to the hassle and cost a lot of money. We let a flat in North London for many years through the
1980s until recently, all of our most successful lets were done directly with the tenant. The only 'agent' we had who was any good was actually a sort of agent cum odd job man who not only handled a lot of the day-to-day hassle but also fixed things himself and would go and buy and install replacement washing machines and such. People like him have now been legislated out of existence.A 'modern' agent will charge you 10% for doing absolutely nothing at all except putting a tenant in touch with you.
You will not get anything like what I would regard as "full management" from any agent. Once the place is let they will not do anything.
Agents.
Yes, I don't like letting agencies! :-)
Typically 15%, give or take 2 or 3. Rarely as little as 10%. Many charge a setup fee in addition.
Plus VAT. So the bottom line is that it reduces your income by of the order of 20%.
You will have to pay the cost of repairs, redecorating, initial cleaning. Tenants pay for cleaning when they leave.
Some agents charge you for advertising. This means the less good they are at finding a suitable tenant quickly, the more it costs you, which I find a little disturbing.
You'll need to know how to work out your tax position.
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