Do you want the passive income and flexibility that comes with being a landlord without any of the responsibility? Sound too good to be true? It’s not. Letting agents offer a variety of services to help make your life as a landlord easier. From property management to rent collection and finding and vetting tenants, letting agent fees are often worth the investment for busy landlords. Are you looking for some help managing your property but aren’t sure what letting agent services are available? We’re here to help. Keep reading to uncover a guide to letting agent fees and services.
Letting Agent Services
Let’s start by discussing exactly what a letting agent does. There’s no one answer since letting agent services range from full management to individual services like guaranteed rent and finding tenants. The number of letting agents out there can be difficult to navigate. Rentround helps landlords compare letting agent fees, services & performance, for free. For landlords confused on which letting agent to pick, the platform is a great help.
Here are some of the most common services you can choose from.
Full management letting agent services are the most comprehensive. The explanation is right in the name — letting agents fully manage your rental property. This includes maintenance and repairs, rent collection, finding and vetting tenants, performing showings and walkthroughs, as well as handling any evictions, inventory lists, and drafting related paperwork. These services also come with the highest letting agent fees. If you’re looking for a “set it and forget it” approach to being a landlord, full management letting agent services is the way to go.
Find and Vet Tenants
Finding and vetting reliable tenants is one of the main complaints of most landlords. Vetting tenants can be tedious and exhausting. Not to mention, if you drop the ball, you may be left with a nightmare tenant! Many landlords pay letting agent fees for finding and vetting quality tenants. Letting agents have access to the best advertising techniques and have experience doing extensive tenant background checks. These letting agent services also include answering all questions, performing rent valuations, and scheduling viewings.
Rent Collection and Guaranteed Rent
Once you find the right tenant you just have to hope they hold up their end of the rental agreement and pay on time. There’s nothing worse for a landlord than chasing down monthly rental payments. Not only is this a nuisance but it could cause you to fall behind on your own bills and payments. Another popular letting agent service is rent collection. Agents are responsible for collecting the tenant’s payments and directly depositing it into your account. They also act as the middle-man between you and your renters, allowing you to maintain a positive relationship.
If you’re willing to pay a few more letting agent fees, you may want to consider guaranteed rent. This service is exactly what it sounds like. Regardless of whether or not the tenant pays on time, the agent will pay you the agreed-upon rent every month. Then it’s up to them to hunt down the tenant for reimbursement.
Repairs and Maintenance
Another tedious responsibility that many landlords face is performing repairs and maintenance on their rental properties. Landlords are responsible for maintaining the property (both inside and out) and performing all necessary repairs as they arise. This includes emergency repairs that occur at inconvenient times. Letting agents can handle these inconveniences for you. Not only will they find and hire contractors to perform repairs and maintenance, but in some cases, they’ll handle paying the bill and collect the money from you later. Any issues that create a safety hazard for tenants must be fixed immediately, which is why many landlords don’t mind paying these letting agent fees for peace of mind.
Inspections and Certifications
Landlords are required, by law, to provide certain inspections and certifications to all tenants. This guarantees that the living quarters are safe and up to standard. Skipping these requirements could make your insurance invalid and might result in legal ramifications. Most of these inspections are required before tenants sign the rental agreement and include inspections for plumbing, gas, electric, heating, smoke, CO2, leaks, and structural security. An experienced agent will have knowledge about these required inspections and how to obtain the required certifications.
Legal Services and Disputes
The last thing any landlord wants to deal with is an eviction or heated dispute with unruly or non paying tenants. Unfortunately, these situations happen, and letting agents are experienced in handling them. Not only will letting agent fees cover messy legal disputes, but it also includes drafting all the necessary paperwork to enter a valid tenancy agreement. Most letting agents have templates they use to help expedite the process. Letting agents edit these templates to fit your specific property and circumstances. Landlords also have the peace of mind knowing they have a legal expert on their side in case of any hiccups along the way.
Letting Agent Fees
Now that you have a better understanding of letting agent services, let’s discuss the cost of these services. Obviously, the more help you require, the more expensive it is. In addition fees vary between traditional and online letting agents. If you’re in the market of making money, you’ll want to weigh out your overhead costs vs your rental revenue to make sure paying letting agent fees is worth it.
It’s important to note that most letting agent fees are included in the service agreement but any additional fees will come at a separate cost. Many laws and regulations were recently put in place to prevent letting agents from charging administrative fees and other exorbitant line-item fees that were unfair to landlords. These rate increases were often passed from the landlord to the tenant, causing a spike in costs across the board.
Fully Managed Services
Do you want your letting agent to handle all the heavy lifting and landlord responsibilities? If so, you may want fully managed services. Most traditional agents offer these services for between £80 – £200 or a percentage of the monthly rent (usually between 12-18%). Paying top dollar means the letting agent will find tenants, perform background checks, draft the tenancy agreement, and perform all property management tasks.
Additional Letting Agent Fees
Are you okay with being a “hands-on” landlord? If so, you may just want a letting agent to help with certain things like drafting paperwork, finding tenants, or performing routine property maintenance. Each individual letting agent service comes with an associated cost. Here’s a breakdown of some of the most popular services and the letting agent fees you might face.
Tenancy Renewal Fees
When your tenancy agreement comes to an end but both you and your renters want to continue the relationship, you need to renew the tenancy. This comes at a cost. Your letting agent can draft a new agreement or update the old one. Most agents charge between £45 – £120 for this service but some don’t charge at all so be sure to check the contract.
Guaranteed rent is almost priceless for most landlords, but it does come with a price. The price for guaranteed rent can range from £80 to £200 per year.
Reserve Fund Fees
Some letting agents create a reserve fund of money to cover unexpected expenses including late rent payments and emergency repairs. Instead of chasing the landlord for money to pay contractors or cover rent, the letting agent can tap into these reserve funds. Fees range from £200 – £1000 depending on the size and value of the property.
There are countless other letting agent fees that landlords might face, depending on the type of agreement you sign. These include, but aren’t limited to:
- Eviction fees
- Late payment fees
- Necessity bill fees
- Maintenance fees
- Early exit fees
- Inventory fees
Whether you’re an accidental landlord or just new to the rental world, you could probably use the help of a letting agent to manage and establish your rental property. From finding and referencing tenants to collecting rent, drafting paperwork, and performing maintenance and repairs, letting agent fees cover a wide range of services based on your needs. The only thing left to decide is how much you’re willing to pay for this type of security and peace of mind.