5% Letting agent fees

[mind the gap]

Every task needs considerate skills and knowledge, that a good LA will provide but a bad LL or LA wont know are required or doubt the need. "It wont happen to me".

I'm sorry, but it doesn't. Much of the work is routine. I suppose it depends what we mean by 'considerable' (I take it that's what you meant to say, not 'considerate'?) If we take as our yardstick the kind of work done by other white-collar workers who take home a similar salary to a letting agent, I think you will find that they do considerably more difficult/complex/specialised work requiring a higher level of training and more initiative than is typically demanded of a letting agent.

Reminder letters, secretary obviously using template, in your mind?. How good is this template? I hope it takes into account difference in possession for PCW/PCM/ETC when giving deadlines. Ensuring the accuracy of arrears to date, any inaccuracy on these two points could void any claim due to dispute of accuracy. Lets hope template has provision in place giving tenant details on where to get advice (i.e. shelter). Template I hope takes into account variations in tenancy agreement changes, not all same and protections differ.

So, it is a secretarial task with several possible permutations. Secretaries are well-practised in adjusting to fit and sending out standard letters. If the templates are well-drafted and water-tight, it should not be a labour of Hercules.

I hope secretary made a copy of the signed original for evidence to be submitted to a court.

Yes, I expect they did. That's what secretaries do.

Ops, all that and its a benefits issue anyway, tenant is more than eight weeks in arrears and rent can be paid directly, shame its just a secretary and dont know this. Has secretary ensured the additional "sharing information with your landlord" form completed? to talk to benefits in first place, to resolve issue with a call.

A secretary can be trained to do this perfectly efficiently. It's not the G8 summit. It's a conversation/short correspondence with a council official.

You said reference check I presume you would include Proof of Identity and Proof of Residence in that. Dated in the last three months and valid photo id. Can not accept professional drive licence as ID nor mobile bill as POR. Otherwise tenant has dependability that its even them that built up the arrears.

Again - tenant referencing is not rocket science. The referencing company does most of the work and tells you clearly how to do the rest. No initiative or imagination or specialist training needed there.

My job though, not justifiable to an experienced landlord but to my customers who pay me generously for the services I provide them, a service they can rely on and researched fully. Their time better spent elsewhere perhaps.

I sincerely hope that you do a good job and that your clients are happy.

and not someone who dont spend sundays reading sites like these

You've tied yourself in knots with your double negative, I'm afraid. Translation, please?!

Now, I was just about to get in bath. I imaine its now cold, thanks for the debate

You're welcome! (But you still haven't convinced me that your job is difficult enough, dangerous enough or specialised enough to warrant the money you make. That's just my view, and in a free market economy, market forces will of course prevail. Conscientious letting agents who manage property efficiently are not my focus, (although I remain to be convinced that their job is partiularly hard). It's all the rest which worry me...

[YesAdam]

lol, im thinking it was a tipple negative. The point being that a secretary is a Jack of all trades, master of none.

In your post you say secretary can be trained, if a secretary is trained that's a letting agent. (for at least 6 months, until it all changes again)

Referencing agencies dont see tenant face to face to can not verify id. They only work from information provided.

On that note though, we don't use referencing agencies. All work done in house, your outsourcing a letting agent job. LA just lazy if they use (if I can say) TenantVerify although I know many that do. Lazy buggers.

and in a free market economy, market forces will of course prevail

Agreed, this is why you wont find many LA if at all charging lower than 10%.

[mind the gap]

lol, im thinking it was a tipple negative.

Don't type when drunk, then!

The point being that a secretary is a Jack of all trades, master of none.

Not really. A secretary deals with routine paperwork, appointments and communications. That hardly qualifies as a 'jack of all trades'.

In your post you say secretary can be trained, if a secretary is trained that's a letting agent. (for at least 6 months, until it all changes again)

? Sorry, you're not making much sense there. If you are agreeing with me that a letting agent is actually a glorified secretary, then you must agree that even the best-paid secretaries do not normally earn more than about £10-15 per hour. So why should a LA?

Referencing agencies dont see tenant face to face to can not verify id. They only work from information provided.

OK, so you have to compare the photo of the tenant's face on his passport, with his actual face, and read the addresses on the utility bills or whatever which he provides and match them up to the address he originally gave as his own. What is so difficult about that? It is not a task of MI5-type complexity, is it?

On that note though, we don't use referencing agencies. All work done in house, your outsourcing a letting agent job. LA just lazy if they use if I should say TenantVerify although I know many that do. Lazy buggers.

Not really. If TenantVerify can do it more for better value than you can do it in house, then it surely makes no sense not to use them.

Agreed, this is why you wont find many LA if at all charging lower than 10%.

Yes, but the fact they charge silly rates just because they can does not make them right. That's my point, really.

[Phlash]

Phlash : thank you for your well-presented explanation. I take your point about 'dead time' although in many industries/businesses employers, shareholders and customers are increasingly averse to the idea of people being unproductive in the way you describe. In a well-run business, surely employees should be engaged in productive work virtually 100% of their time, not lying fallow some days.

I must also take issue with your comparison with teacher's hours. I appreciate it's not a fair comparison, but that's because teachers typically work many more hours than the mythical 1265 directed hours on which their salary is based. In your calculation of their hourly rate, dont' forget to factor in the 20-40 additional hours per week spent in the evenings and weekends and school holidays, preparing, marking, attending exam/controlled assessment standardisation, supervising extra-curricular activities, etc. One of my colleagues, a drama and English teacher, once did an exercise for the Professional Association of Teachers, whereby he kept a detailed record of everything he did for six months. They worked out his hourly rate, on the basis of that diary, to be less than the minimum wage. You will perhaps understand why I am made impatient by letting agents who feel sorry for themselves because they feel they do difficult and time-consuming work.

Just to clarify, I am by no means presenting my personal views on teachers' salaries. Merely using them to present the case showing that statistics are damned lies unless they are computed under similar conditions/variables.

I will lean towards your views on value when thinking about a sole trader letting agent. But with a lettings business with significantly varied risk profiles in terms of fixed overheads, then I can understand (intimately actually!) the reason for charging the rates of fees discussed as extortionate here.

In terms of the 100% thing, am not saying that it's entirely lower because of non-productivity, but because of 'other' tasks not directly related to a landlord's property that therefore do not earn income.

We are a fairly new agency, and each and every day is packed full of things to do. In the early days, I was working full weeks without any of it being directly paid for. I guess, once up and running and not putting so much energy into start up exercises, then fees could be legitimately lowered. However, I always want our company to develop, so I will always ensure we dedicate time to things that are not direct functions of fee paying tasks. To that extent, there will always be a portion of the fees being re-invested in order to improve future performance, so that is a small part of the cost-plus charged.

I do believe letting agents get a hard time generally, mainly because of the minority rogue ones. I was an engineer, turned chartered accountant and now owner of a letting agency. I think I can safely say I've tasted under-recognition, over-recognition and under-appreciation so far and in that order...

Our landlords can leave our service fairly easily, we have a small tie in but this has been thought through. We require 3 months notice so that the business can react, imagine losing 20% of your business overnight, we therefore require notice to plan appropriately. We do not require the landlord to keep paying us for the tenant that was found, so comparatively speaking it is fairly easy to leave our agency - at one point we allowed landlords to leave without notice but we consider this too risky for our staff and had a responsibility for their welfare so we integrated a notice period. To date, we haven't had a landlord leave...but they do still pay what is considered extortionate by some here (although, we avoid the hidden add-on stuff usually found part way through the business relationship) - I like to believe that our landlords are receiving the value of their £££'s paid. As stated at the beginning of this thread, the landlord receives much more £££ for their time for simply owning the asset than we as agents do, so too much ill feeling about the level of fees can be unjustified. They are both capitalists after all, yet we have tried to value agents from a socialist type valuation - If we do that, we should also look at the rates that landlords charge in rent...

[mind the gap]

Just to clarify, I am by no means presenting my personal views on teachers' salaries. Merely using them to present the case showing that statistics are damned lies unless they are computed under similar conditions/variables.

Point taken.

I will lean towards your views on value when thinking about a sole trader letting agent. But with a lettings business with significantly varied risk profiles in terms of fixed overheads, then I can understand (intimately actually!) the reason for charging the rates of fees discussed as extortionate here.

If that is the case then the logical conclusion is that sole trader LAs are able to provide the same service more cost effectively, albeit for fewer properties, than a bigger agency with more staff. That seems to fly in the face of economies of scale and market forces! Unless a big agency offers services which the small sole LA cannot?

In terms of the 100% thing, am not saying that it's entirely lower because of non-productivity, but because of 'other' tasks not directly related to a landlord's property that therefore do not earn income.

For example?

We are a fairly new agency, and each and every day is packed full of things to do. In the early days, I was working full weeks without any of it being directly paid for. I guess, once up and running and not putting so much energy into start up exercises, then fees could be legitimately lowered. However, I always want our company to develop, so I will always ensure we dedicate time to things that are not direct functions of fee paying tasks. To that extent, there will always be a portion of the fees being re-invested in order to improve future performance, so that is a small part of the cost-plus charged.

That makes sense, but very few new businesses make a profit in the first few months/year.

I do believe letting agents get a hard time generally, mainly because of the minority rogue ones. I was an engineer, turned chartered accountant and now owner of a letting agency. I think I can safely say I've tasted under-recognition, over-recognition and under-appreciation so far and in that order...

Try teaching. You'll get all that and goverment interference and contempt by the shedload.

Our landlords can leave our service fairly easily, we have a small tie in but this has been thought through. We require 3 months notice so that the business can react, imagine losing 20% of your business overnight, we therefore require notice to plan appropriately. We do not require the landlord to keep paying us for the tenant that was found, so comparatively speaking it is fairly easy to leave our agency - at one point we allowed landlords to leave without notice but we consider this too risky for our staff and had a responsibility for their welfare so we integrated a notice period. To date, we haven't had a landlord leave...but they do still pay what is considered extortionate by some here (although, we avoid the hidden add-on stuff usually found part way through the business relationship) - I like to believe that our landlords are receiving the value of their £££'s paid.

From what I know of your business practice, I'm sure they do.

As stated at the beginning of this thread, the landlord receives much more £££ for their time for simply owning the asset than we as agents do, so too much ill feeling about the level of fees can be unjustified. They are both capitalists after all, yet we have tried to value agents from a socialist type valuation - If we do that, we should also look at the rates that landlords charge in rent...

Probably best not to bite the hand that feeds you...!

[YesAdam]

haha, I dont drink.

It makes sense to me, you say LA is an unskilled roll (not your words, but ok) and contradict that saying a secretary can be trained. I agree with that. Although a trained secretary is a letting agent and therefore paid more, though as other poster suggested your paying a business not a person so your per hour maths is incorrectly based.

I stand by the analogy in your scenario a receptionist would be a jack of all trades, with no speciality in lettings industry and have to work like robots in your scenario.

Remembering though that a trained secretary as a LA with no permanent roll will soon fall in lapse of regulation and matters. My RSS reader is full to brim not to mention emails from lettings associations. Its what we call Continuing professional development (CPD).

Your over generalising the point I was making an untrained secretary; is likely to take provisional driving licence as ID - that is uneditable. Is likely to take mobile telephone as POR - that is uneditable. Is unlikely to ensure POR/ID is no more than 3months out of date.

TenantVerify is not better value. Its a good service for lazy LA but all can be done in house. It costs me less than £4 for a credit check with all bells and whistles, a few phone calls to nicely integrate references, employees and such ensuring its not a "friend". I think I do good referencing but i'd admit TenantVerify is a specialist in the area. (Im sure you could argue just a secretarial job though, I could probably try.)

[mind the gap]

It makes sense to me, you say LA is an unskilled roll (not your words, but ok) and contradict that saying a secretary can be trained. I agree with that.

Come again?

Although a trained secretary is a letting agent and therefore paid more, though as other poster suggested your paying a business not a person so your per hour maths is incorrectly based.

You are confusing yourself by your use of the word 'unskilled'. I did not say secretaries are unskilled. The average secretary is skilled in writing letters (usually to a pre-existing template), making phone calls to arrange things, contacting people to remind them that money is owed, and drafting straightforward texts such as advertising copy for accommodation. My point was that since secretaries are deemed to be worth only £10-15 per hour, why should letting agents (whose role encompasses mainly secretarial tasks) be deeemed to be worth much more?

I stand by the analogy in your scenario a receptionist would be a jack of all trades, with no speciality in lettings industry and have to work like robots in your scenario.

I wasn't aware I had a scenario, nor did I mention receptionists. Not sure what your point is.

Remembering though that a trained secretary as a LA with no permanent roll will soon fall in lapse of regulation and matters.

So many words...so little sense. Please clarify.

My RSS reader is full to brim not to mention emails from lettings associations. Its what we call Continuing professional development (CPD).

No, it isn't. It's called emails. CPD is when you do some useful training for your job and are assessed on it afterwards.

Your over generalising the point I was making an untrained secretary; is likely to take provisional driving licence as ID - that is uneditable. Is likely to take mobile telephone as POR - that is uneditable. Is unlikely to ensure POR/ID is no more than 3months out of date.

You have very little faith in the intelligence of the average secretary. I believe that most secretaries can be trusted, once instructed, to remember which documents are acceptable as proof of residence and which are not. It's not the Da Vinci Code.

TenantVerify is not better value. Its a good service for lazy LA but all can be done in house. It costs me less than £4 for a credit check with all bells and whistles, a few phone calls to nicely integrate references, employees and such ensuring its not a "friend". I think I do good referencing but i'd admit TenantVerify is a specialist in the area. (Im sure you could argue just a secretarial job though, I could probably try.)

Whatever. So it costs you £4. How much do you charge the LL/T?

[boletus]

For an update, there's another well known landlord site advertising full property management from just £14.99 a month.

I've not provided a link due to the advertising rules but it's not hard to find.

I reckon it's nearer £30 all in for fully managed, so on a £600 pcm property that comes in at 5%.

No idea how good they are but they can't do a worse job than some of the high street chains trying to charge 10%.

There doesn't appear to be any hidden fees, certainly no more than other letting agents charge.

It's an online service, so no high street office for tenants to pop into to sort out problems or shop window to advertise properties to let. Although they do visit the properties.
ARLA registered and part of a money protection scheme.

No connection to me whatsoever. I don't think I'll use them as I'm happy with my current management arrangements, I also think it might limit the pool of potential tenants.

[mind the gap]

And what about all the money they rip off the tenants for !!!! come on agents spit it out give me a list of all your fees and don't give me all the ******** about time and sorting things out with credit checking it takes very little time oh and I printed 2 tenant aggs off this afternoon for a couple that took me Mmmmm 5 mins have I earned £200 from my new tenants NOooooooooooooo ! its all part of the service
Numpties !

So you are unconvinced that letting agents represent value for money?

[midiman]

For an update, there's another well known landlord site advertising full property management from just £14.99 a month.

I've not provided a link due to the advertising rules but it's not hard to find.

I reckon it's nearer £30 all in for fully managed, so on a £600 pcm property that comes in at 5%.

No idea how good they are but they can't do a worse job than some of the high street chains trying to charge 10%.

There doesn't appear to be any hidden fees, certainly no more than other letting agents charge.

It's an online service, so no high street office for tenants to pop into to sort out problems or shop window to advertise properties to let. Although they do visit the properties.
ARLA registered and part of a money protection scheme.

No connection to me whatsoever. I don't think I'll use them as I'm happy with my current management arrangements, I also think it might limit the pool of potential tenants.

Who are they? Can you PM the details.

Thanks