Letting Agent Fees: A Guide for LandlordsWritten By PropertyLoop May 13, 2021
Whilst every landlord will have their own unique approach to managing their rental properties, the assistance that a letting agent can provide is not to be overlooked. The journey of becoming a landlord can not only be intimidating for newcomers but will also land a hefty blow on their finances. Effectively using a letting agent will not only help landlords to find tenants quickly, market their property in its best light, collect rent and deal with tenant disputes, but also potentially make the experience far more cost effective for the landlord. But, how are letting agent fees calculated and is it worth using a letting agent? We will answer this and more in our guide to letting agent fees for landlords.
Why Do Landlords Use Letting Agents?
The approach that a landlord chooses to take with overseeing their rental portfolio is of course, completely down to themselves. Whilst many rental property owners enjoy being on the frontlines of each aspect of the rental process, seeing them personally attend all property viewings, arrange repair work and liaise with future tenants, other prefer to take a far more hands off approach.
Essentially, letting agents will take on many of the responsibilities that come with letting out your property, with the degree to which they assist the landlord depending on the services purchased. It goes without saying that similarly to landlord insurance, the specific nature of what each package will comprise will vary between letting agents, but more commonly that not agents will offer a “let only”, “rent collection” and “full management” services.
How Much Does It Cost to Use a Letting Agent?
It is important for landlords to keep in mind that whilst there are a suite of services that letting agents can offer, you may not need all of them. As mentioned there are multiple approaches to managing a rental property portfolio and letting agents are here to complement that effort. Therefore only implementing the level of service that you need will reduce the over all letting agent fees.
Naturally the more “basic” packages that facilitate the letting agents marketing the rental property and finding a tenant will be the cheapest. However, it is always worth checking what services are included with the package as the associated costs of referencing your tenants can quickly make this nominal amount skyrocket. As can be expected the more “hands off” packages that require much more legwork on the letting agents behalf come at an extra cost to the landlord. Of course this is rather vague as the exact prices will of course vary between agents, however for a let only service property owners can expect to pay the equivalent of a few weeks rent at the very least, taken as a one off payment. If however, the landlord has opted to let the agency collect periodic rental payments from their tenants, rather than an established figure, the agency will typically deduct a percentage from this rent for their service. Similarly, if the letting agent is overseeing the full management aspect of the rental experience, the landlord can expect them to take up to 20% of their monthly rental fee.
Can You Negotiate Letting Agent Fees?
Of course, with so many peripheral costs landlords have to incur when maintaining a property portfolio, with constant remedial work, annual taxes and inspections to pay for, not to mention marketing and referencing costs when trying to find a new tenant, they can’t be blamed for wanting to trim down their expenditure. As you would expect there may be some room to negotiate when approaching a letting agent for their services, however it is important to be hesitant of any agents that are all too happy to drastically reduce their fee. Instead seek out the letting agents that firmly defend and justify their costs, levying this on a proven record of connecting tenants and landlords. Whilst this may not be the cheapest option on the market, it still doesn’t mean that landlords won’t be able to talk their way into a reduction in overall costs; and will still be able to take advantage of genuine experience and expertise.
However, it goes without saying that the more comprehensive a service the agent is providing, the higher the letting agent fees that the owner of the rental property should expect to pay. With this in mind, if the landlord does not wish to pay the highest of premiums they could trim the amount of services they are asking of the letting agent. Similarly to assessing landlord insurance policies, what do you actually need, and what are you able to do yourself. With this in mind there are areas of the letting where it would be wise to leave your rental in the hands of the specialists, particularly marketing your rental property online and helping you to find your ideal tenant quickly.
Letting Agent Fees With PropertyLoop
When hosting your rental opportunity with PropertyLoop we endeavour to put the landlord first, ensuring that a penny isn’t charged until a tenant has been found, agreement signed and bags through the door. Leaving out dated models of hidden and upfront payments behind, PropertyLoop upholds transparency in every facet of the renting process, only taking a 5% fee from each rental payment. Put simply, when advertising and managing your rental with PropertyLoop we make sure that the landlord is paid before we are!
Advertising Your Rental With PropertyLoop
When advertising your rental opportunity with PropertyLoop you can rest assured that there will no surprise letting agent fees, upfront costs or other financial barriers to finding your ideal tenant. With this in mind, listing your rental with us is completely free, seeing the rental property hosted on favoured property portals such as Rightmove and Zoopla, alongside our industry leading PropertyLoop Platform. The bespoke PropertyLoop platform brings all sides of the rental community closer together than ever, allowing landlords to seamlessness communicate with their tenants, assess offers on their rental opportunities and negotiate with aspiring renters all in one place. Not only that but landlords will also receive feedback on the performance of each of their listings, getting direct feedback from viewers alongside metrics on how renters have engaged with your rental listing, allowing us to target your ideal tenant. During your search for a new tenant to occupy the rental property, our dedicated specialists will be available through our online chat portal and over the phone to assist both landlords and their tenants in any aspect of the rental process.
Not only have PropertyLoop looked to bring forward the stagnant nature of how all parties of the rental process can be brought together to make for more transparent dealings, but we have endeavoured to revolutionise the way that tenants view and interact with their future home. To this end when marketing your property with us each rental benefits from a fully immersive, dimensionally accurate photorealistic 3D tour. Professionally captured and curated through the collection of billions of reference points throughout your property, these photorealistic tours offer potential tenants a new way to engage with rental opportunities, allowing the property to be explored at any time or place, without either the landlord or tenant having to commute to an in person viewing. Further allowing landlord to demonstrate every intricacy and rich detail of their rental property, each opportunity is recreated through a suite of new property media. Landlords and tenants are able to see multiple recreations of the rental, seeing the property from a floor plan, doll house and of course, the explore function.
Each rental opportunity hosted with us also receives a 4K HD videography tour, highlighting the character of each opportunity in brilliant detail and curated by professional, experienced directors. Alongside the 3D tours, these videos further contribute to the unrestricted viewing experience that PropertyLoop offers with every listing. Recognising one of the largest frustrations within the UK rental space every property that is exhibited through our platform has HDR photography wonderfully capture its space, ensuring that misleading and out dated imagery is a thing of the past.
Once your property is listed and received interest from prospective renters we will provide a comprehensive reference for each tenant you wish to proceed with at no extra cost. Seasoned landlord will recognise that many other high street and online letting agents will charge rental property owners exorbitant amounts for each tenant that they wish to reference. Not only does this make the process of finding the ideal tenant far more expensive, but this in turn only encourages the landlord into rushing into a tenancy agreement with a party they may not be completely satisfied with, leading to disputes and at worst lengthy eviction proceedings or abandonment. We understand that this is a critical component on the rental experience for property owners and not only offer this unrestricted referencing process to landlords at no additional costs but also gather more information on each potential tenant than the typical letting agent. Naturally before proceeding with a lengthy, legally binding tenancy agreement, similarly to tenants, landlords should be able to make a fully informed decision as to who they grant possession of their property. With this in mind, when referencing a tenant we provide you with a reference from each of the potential tenant’s past landlords, allowing property owners an uncompromising insight into a residents full rental history.
The PropertyLoop Guarantee
Making the renting landscape easier to navigate for both renters and landlords alike is more than just an ambition for PropertyLoop, it’s our everyday practice. Whilst many of the services outlined below would come at an additional cost with many competing online and high street letting agents, we look to allow landlords to manage their properties in an unrestricted manor, with all of this coming as part of our guarantee, meaning no extra expense, higher premiums or lengthy sign up process for landlords.
Addressing perhaps one of the greatest concerns for landlords, PropertyLoop offers property owners rent protection, ensuring that landlords always receive their expected rental payments. Of course, any situation regarding missing rental payments can be a nightmare for landlords, to this end is a tenant is unable to make payment, we will cover the due amount. Additionally if a tenant accumulates substantial rent arrears we act to uphold the financial security of the landlord, pursuing the tenant for the outstanding rent payments, and recovering any due amounts on behalf of the landlord.
Naturally, neither a landlord or tenant aspires to have their rental journey involve any court proceedings but these eventualities can unfortunately transpire regardless. With this in mind landlord will be able to take solace in knowing that the PropertyLoop guarantee will cover the cost of any unforeseen legal expenses up to £100,000. Of course these disputes can arise, with problem tenants only working to exacerbate any problems the landlord may be facing; however if there are any disagreements regarding the tenancy agreement the associated costs and expenses will be covered by PropertyLoop.
With the landlord rightfully implementing measures to safeguard their buy to let investment, a tenancy deposit is perhaps the most abundant way of doing so. However, this is sometimes not enough to protect landlord from the unforeseen costs of extensive neglect to the property and its contents. In the unfortunate circumstance where the impairment to the rental exceeds £1000, we will pursue the tenants for the costs, with the associated legal fees also being taken care of.
In addition to this where the possession of the rental property needs to be regained by the landlord PropertyLoop will be there throughout the entirety of the eviction process, ensuring that tenants that violate the terms of the tenancy agreement, squatters or illegal residents are removed.
PropertyLoop is the world’s first commission free lettings platform. Our platform allows landlords to advertise their rental, reference tenants, curate an agreement, register the deposit and collect rent completely for free! There are no hidden charges, upfront fees or any catches.
Built by experienced property investors and landlords, PropertyLoop connects renters with the owners directly. Your property is featured on all major search and comparison portals as well as advertised by PropertyLoop everywhere else on the Internet. You don’t have to worry about finding the good renters, that’s the job for the platform. Receive offers straight to your mailbox and select the renters that are right for your property. Need access to busy London property market? No problem at all! PropertyLoop is the London market specialist with years of experience and unique knowledge. Whatever your needs are, you can always speak to friendly support staff. Renting property is made as simple as one, two, three.