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Landlords self-managing to save money is a false economy, argues agent

An experienced agent claims that forgoing the services of a letting agent to save money is a false economy for landlords.

In a guest article for LAT's sister website, Landlord Today, Jill Griffiths, director of residential lettings for Andrew Granger & Co, explains why letting agents remain a solid investment for landlords.

She cites the raft of new rental sector regulations as a key reason for landlords to work with an agent.

"With ever stricter guidelines and fines in place, whether you are renting out one property as a retirement investment, or a whole portfolio, landlords need to ensure that they are fully compliant," she writes.

Griffiths identifies the incoming Tenant Fees Bill and the recently-introduced Minimum Energy Efficiency Standards as just two of the measures which will increase the burden on landlords.

“Reputable agents have to keep up to date with changes in legislation and undergo training and examinations to ensure they have the right knowledge to advise landlords on a whole range of issues from health and safety to investing in the right BTL property," she continues.

Griffiths, who has over 20 years of experience in the rental industry, adds that agents' local market knowledge and existing tenant databases can help to ensure higher occupancy rates than the DIY-landlord approach.

"Of course, as a property professional you’d expect me to advise using a letting agent but ultimately, it’s a case of landlords deciding how they want to manage their properties." 

"For those who want to ensure their assets are well managed and protected, a good agency is well worth the investment," she concludes.

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    I did a check on our local MEES Exemptions register yesterday and found there were only 3 properties in the whole district registered. I've personally registered two and my business only has a 10% market share (of the circa 50% who use an agent). How much compliance is really happeniong out there....

    Paul Barrett

    There are many unfair fraudulent LL out there which is why I would reluctantly welcome a National LL Licensing scheme.
    I am being competed against unfairly by LL who fail to comply with regulations.
    I want them out of business or compliant.

     
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    We have so many enquiries from landlords who manage their own properties but are having problems and want to know the solution, when we ask what paperwork the tenants were given at the start of their tenancy we are told their tenancy agreement, no inventory, no right to rent, epc, gas certificates sent later, and they all seem unaware of what is required of them.

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    Sounds like the letting agency my son had the misfortune to have to deal with!

     
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    I don't manage my own properties but it is an expensive luxury due to mistakes. Of course the agents are well qualified and do their thing but they miss the blindingly obvious. These can be water leaks in airing cupboards and under a sinks, mandatory alarm battery replacements and telling us who the tenants are.

    One agent is totally incapable of sorting out tenant referencing. They believe everyone is very nice and will be perfect in every way. This attitude has just cost thousands of pounds

    Most agents allow overcharging for work. Sometimes thus may be dishonesty but I choose to believe it is to get a good service asap.

    Heating is a total mystery for most agents. Unfortunately problems occur at other times and not just the day before the annual inspection. I just had a shower go wrong. No it hadn't! The gas boiler tank thermostat had failed and the boiler was permanently heating the water - thus rather dangerously hot showers. That cost over two hundred pounds to fit a £10 thermostat. Yes I could easily fit that. I have an electrical certificate but not a gas one which of course means that I will kill someone if I touch the boiler system.

  • emma dobson

    I agree - agents are so much more diligent with the legal side of it and the identity checks
    Emma from https://coppenwall.com

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    had an agent did not do proper referencing check on tenants, lost eight months rent on suing and chasing rent; another agent covered the fact the tenants were doing unlicensed HMO; an agent over charged tenants on application fee and turn tenants and landlords against each other; I can go on and on about the stories to work with indecent agents. To manage yourselves is about to take the control on your own assets back from those agents who do not care about you and your tenants. It is absolutely nothing wrong we take care of what belong to us. It will only become a false economy if we force economy!!!

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    How much do you charge or pay for a full management fee? 10-15% every month to letting agent in average? Usually the first month rent has nothing left, how much is the profit for landlords after maintenance, improving property, incidents, hidden commission between contractors and agents and tax? If we are going this way, very soon, only the big players will survive and monopolise the market. Rich are richer, poor are poorer. Is this what we want? Are you sure you will be in the group of the rich? Are we still democratic? Ridiculous and childish!

    S l
    • S l
    • 05 June 2019 16:34 PM

    8-10% each month on full management, letting fee and finding fee are all in. no upfront deductions. some do upfront deductions but 3% rent collection or 4 for full management

     
  • Emma Hamilton

    We have many landlords contact us as they have been let down by their agent with regards to inventories and check outs. By then it's too late and has cost the landlord money he could have claimed from the deposit. They go on to leave the agent and self manage and we do all their inventories, inspections and compliance checks at a fraction of the cost. Some agents are terrible but we have seen some good ones. The difference can be astronomical though unfortunately and a LL won't find out until it's too late

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    A professional LL with not use LA to manage their property,,,, they do it themselves.
    We have done so for over 35 years. Its an easy daily job which saves you a small fortune. Your property, your business, your tenant, your livelihood.

  • Paul Barrett

    Providing a LL can reach the rental properties within about an hour's drive then self-management is viable.
    Of course time is needed and if the LL hasn't sufficient of this or simply can't be arsed they simply have to accept surrendering a fair percentage of their rental income to LA.
    Many LL could easily self-manage if they wished.
    Just join a LL association and take their relevant courses.
    It really isn't that hard.
    Plus as a self-managing LL to keep up with the trade press like this site.
    Make no mistake being a self-managing LL is far from a passive occupation.
    If you simply can't be bothered then a good LA is vital for the success of your rental property investments.
    There is the rub.............finding a good quality LA.
    It is unfortunate but they don't grow on trees!!
    They have the capacity to permanently damage the future financial prospects of a LL as indeed happened to me.
    So I have no alternative than to self-manage.
    Never again will I risk using a LA.
    But for most LL their LA is doing an adequate job.
    Though I do believe that LA should be fully qualified and regulated.
    There are no real barriers to entry currently which is totally unacceptable.


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    Agree, if further than an hour becomes not really viable, unless of course you brought a street of houses in say Newcastle for less than 100k and get rents of say £350ish.on each of your half a dozen or so houses.
    Its like Freeholders of blocks of flats who have offices over an hour away,never works and they get taken over under RTM.
    Being a portfolio LL means you have to approach it in a professional manner and then you have only yourself to blame, o and of course the clueless local council.

  • Suzy OShea

    Well what a nice advert Ms Griffiths has given us. She is hardly partial now is she? What she fails to acknowledge is that there are more rogue letting agents in this unregulated market than there are rogue landlords!

    last year, I attended a very useful National Landlords association course, during which it was stated that Landlords are entirely responsible for the errors of letting agents. that is the legal position! So since we are legally responsible for our own properties, which is only just, what is the point of paying vast up front management fees of 10-15% of the annual rent, when their varying levels of expertise and effort provide landlords with no legal protection? Better to make the effort to keep up with the legislation yourselves, chore though it is, and keep a copy of the current gas safety certificate on the notice board in the house or include a clause in your contract which stipulates that the tenant is happy to receive all the bonus documents, right to rent, EPC, current gas safety certificate in electronic format to their e-mail, along with their AST contract.

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    Interesting comment Suzy. Check court cases. Tenants received the gas check following signing their AST and the Courts accepted the tenants defence that the landlord failed to give it at the same time as the tenancy was signed! So the email system is not accurate in such a respect. For tenants to accept legal notices by email is a better idea as you can obtain receipt also. I have also attended many courses by the NLA, RLA and several other training enterprises. I have been amazed many times how much landlords don’t know who have been in the business many years. Even basics such as Article 4, or what is quiet enjoyment, or a N5 etc etc. I agree agents should have a qualification but landlords also. There are too many poor of each. So that NLA course has no doubt been updated now. Maybe another course is due?

    S l
    • S l
    • 31 May 2019 09:47 AM

    Was the case being appeal? I am surprise the court accept the tenants defence that landlord failed to give gas cert at same time as tenancy was signed. There are no requirement that it has to be given at that point so long as the property have the gas certificate clearly visible and displayed on the property when tenancy start and have a valid gas cert throughout the tenancy period. The landlord do need a lawyer who are well verse with the hmo laws and requirement. Bear in mind, magistrates are not legally qualified and not necessarily have any depth in their knowledge of how hmo works and the laws regulating it. They should have.

     
  • Suzy OShea

    Jonathan Ash,

    Thank your for your contribution.

    Since the tenant signs the tenancy agreement agreeing to all of its terms and conditions, then that is a legally binding document between us. Otherwise what is the point of contract law? By signing the agreement the tenant agrees to accept these documents in PDF format sent by e-mail. The tenants signature is witnessed by my manager, whilst my signature is already on the page and has already been witnessed.

    I've signed up to do more courses this summer.

    You have given me an idea about including a clause to protect the activities of my cleaner/manager who is often at the house daily during the week, and even on week ends if she is showing rooms. This means that the house is well cleaned and maintained, but someone might get funny about it!

    What is N5?

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    Level of understanding

  • Paul Barrett

    Disturbing isn't it!?
    Suzy clearly is a little bit shy of knowing what should be known.
    But at least she recognises this and is doing something about it.
    How many other LL are similarly motivated?
    I doubt many!
    Which is why I believe there should be MANDATORY Training for LL akin to the training HGV/PSV drivers have to undertake EVERY 5 years.
    Indeed my 5 year CPC is due to expire so I will need to undergo another 30 hrs of training before I may drive for money.
    Why shouldn't LL have to undergo similar training every 5 years?
    Cost is about £300.
    Still all power to Suzy who is protecting herself with education.

  • S l
    • S l
    • 05 June 2019 16:39 PM

    no other businesses are required to take training, so why should prs. its up to the individual landlords if they wishes so. Moreover, tenants are already crush by the increase in rent due to the new laws and regulations on prs.

    Paul Barrett

    I think the issue is that LL should meet required standards.
    Unlike homeowners tenants can have no influence upon the standard of a property.
    Therefore it is not unreasonable for tenants to expect there is a safe standard.
    I have no issue in this at all.
    No LL can really object to CO and fire detectors.
    LL should have knowledge of what they are doing as legally s LL is RESPONSIBLE for everything.
    I have no sympathy at all for LL who choose to remain ignorant while making profit out of tenants.
    When profiting from a service the service provider should know what they are doing

     
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