Ask a Letting Agent anything

Ask a Letting Agent anything

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superlightr

Original Poster:

12,842 posts

262 months

Thursday 16th March 2023
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NextSlidePlease said:
Is rightmove the only realistic way of letting? I am in the process of setting up as a letting agent (following a decade plus of being a landlord) but my god the fees!. Can you get by at least initially on various social medias and own website and tenant shortlists rather thave having to hand over 4 figures a month to RM?
We are getting out now at the top/peek of the market for letting agents - its going to go downhill quickly for smaller agents as the big boys are buying up and the hoops to jump through are getting ever more for the letting agent. I think it will be ok for the landlord but at the end of the day we know we will struggle in a few years to compete with the larger firms, our income will decline and our sale vale will drop. It wont be viable from our pov. bear in mind this is our pension. So we took the decision to cash in now before the really serious changes impact smaller agents and landlords and before our value declines.

If you are starting organically ie you are not buying up a portfolio or another agency then good luck. its very hard to break in to make money now. the costs are very high at all levels, the competitors will be fierce, they will have better tech. Yes you can undercut, yes you can be more nimble and offer a more personal care for your landlords but to actually grow it and make money you then get into the stage of you will need staff and then thats where the issues start. You also have to know what you are doing in so many technical areas. Training and compliance for yourself and staff are vital. Its so easy to screw up the paperwork. Most DIY landlords dont know half of what they have to do and end up screwing up. It may not come to light and they think they are good at it but when they get bitten they get bitten hard with multi thousand pound fines. Get ARLA trained to level 4 which you will need to be shortly by law as an owner of a LA. (I think its level 4 or perhaps 3) This will help you to understand the issues.

Wife and I did well on compliance as we both have law degrees and worked as solicitors - compliance is where the hard work is - letting properties is easy. Proving compliance is also a major part now if and when you get inspected or challenged by trading standards. Proof, compliance and vigoursly following procedures.

Where you can beat the big boys and where we did is on the tenant selection and not having issues with tenants from the very get go. We were very selective.

Bear in mind;
the govt hate you, the public hate you, the banks hate you, the governing bodies hate you and trading standards hate you. You are public enemy number one. Before you go any further check out that you can actually open a client bank account. many banks will not do so for new business.

I honestly would struggle to recommend you going into at this time without full training and having worked in the industry for years. looking after 4 properties is nothing like running a letting business.

Nickbrapp

5,277 posts

129 months

Thursday 16th March 2023
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Why are so many houses “stunning”


Why do landlords think it’s ok to not allow pets?

Alickadoo

1,593 posts

22 months

Thursday 16th March 2023
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Nickbrapp said:
Why are so many houses “stunning”


Why do landlords think it’s ok to not allow pets?
Because it's their property and if they don't want pets they don't have to have them.

Jiebo

908 posts

95 months

Thursday 16th March 2023
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Alickadoo said:
Because it's their property and if they don't want pets they don't have to have them.
Most cowboy landlords mortgage the property, so it’s actually the banks property, not theirs.

I’m of the opinion that landlords should legally not be able to disallow pets, as long as all damage is covered. In many ways they cause as much damage as small children.

Alickadoo

1,593 posts

22 months

Thursday 16th March 2023
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Jiebo said:
I’m of the opinion that landlords should legally not be able to disallow pets,
I'm of the opinion that fewer people should have pets. Nobody should have more than one.

superlightr

Original Poster:

12,842 posts

262 months

Thursday 16th March 2023
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Louis Balfour said:
superlightr said:
Having just sold up a multi (2) branch Letting Business and been working as a letting agent for the last 25 yrs - Im happy to give any low downs, ins and outs or questions relating lettings, landlords/tenants. (We didnt do any sales)

Edited by superlightr on Thursday 16th March 16:41
How much did you sell the business for (if you don't mind disclosing such info) and how did you calculate its value?

Edited by Louis Balfour on Thursday 16th March 20:21
Value was on a multiple of our commission turnover 1.5x - 1.7x. different weightings to different client types.
We also had a high profit ratio for the industry of close to 45% but we were very efficient and charged high fees. our market is SE but not London and clients not generally BTL investors but well off LL who wanted straight forward, reliable agent who could sort out the issues and successful do the job.
Sold for just under £900k ish.

Edited by superlightr on Thursday 16th March 22:14


Edited by superlightr on Thursday 16th March 22:14

superlightr

Original Poster:

12,842 posts

262 months

Thursday 16th March 2023
quotequote all
Nickbrapp said:
Why are so many houses “stunning”


Why do landlords think it’s ok to not allow pets?
As letting agents not estate agents we were much more down to earth and realistic about properties/descriptions etc. We did have some stunning properties over the years worth a 1-2 million we let out but most were normal houses/flats. We were rural location so again some properties were attractive and interesting which is what i enjoyed and had property envy a few times for sure !

We would not take in properties if they were bad - its a waste of everyone's time.

Equally we would bin some LL if their expectations were not realistic and we could not work with them. Its very much building up trust and getting the LL to trust us to get the best price and manage the property in the best way. We had many LL with us for 20+years.

One of our challenges was always to educate LL that the rent should go up each year - LL would say but they are nice tenants, keep the rent low to help them etc but that was not the right way. We ran educational letters abut why to increase the rent each year and why it was best for the LL and also the T in the long run.


Pets

tricky as "technically" a LL must consider allowing unless there is a reasonable reason not to. Many LL are reluctant for Pets (we would general refuse tenants with reptiles based upon a number of bad experiences). Cats/Dogs ok depending on numbers and how they are kept. we would try and educate the LL to allow pets as it would open the property to a wider market, we could charge a higher rent and simple maths to show they would get more rent which would cover any realistic risk was worth it business wise. We/I would always recommend to allow a pet 1 or 2 unless flats etc where they would be excluded under the head lease. 8/10 the LL would follow our advice and it would work out well. pets are not a problem.

Its getting the right tenants that the hard part which we excelled at. thus low rent arrears and few issues with tenants. = happy landlords and high fees.

Disco You

3,681 posts

179 months

Thursday 16th March 2023
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I'd be fascinated to know how you managed to spin it that an annual rise in rent is good for the tenant.

Louis Balfour

26,271 posts

221 months

Friday 17th March 2023
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superlightr said:
Pets

tricky as "technically" a LL must consider allowing unless there is a reasonable reason not to. Many LL are reluctant for Pets (we would general refuse tenants with reptiles based upon a number of bad experiences). Cats/Dogs ok depending on numbers and how they are kept. we would try and educate the LL to allow pets as it would open the property to a wider market, we could charge a higher rent and simple maths to show they would get more rent which would cover any realistic risk was worth it business wise. We/I would always recommend to allow a pet 1 or 2 unless flats etc where they would be excluded under the head lease. 8/10 the LL would follow our advice and it would work out well. pets are not a problem.
Not wanting to derail the OP's thread, but the main problem with pets is that owners rarely, if ever, understand how much damage they can do. As a consequence, they are reluctant to pay a deposit large enough to cover the potential damage (and anyway deposits are limited legally). They love their pet and in their minds said pet can do no wrong.

A single cat can easily trash a set of carpets, soak the underfloor in urine and impregnate the decor with cat smell, whilst using parts of the kitchen as a scratching post.










Edited by Louis Balfour on Friday 17th March 08:26

lizardbrain

1,939 posts

36 months

Friday 17th March 2023
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What happens if you discover a good tenant has a dog, deep into an otherwise hassle free tenancy.


Louis Balfour

26,271 posts

221 months

Friday 17th March 2023
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lizardbrain said:
What happens if you discover a good tenant has a dog, deep into an otherwise hassle free tenancy.
If there has been no agreement to a pet the landlord can either seek to secure their financial position, or serve notice. The Tenant Fees Act (2019) limits the deposit, so they can really only insist on a guarantor if you've already paid the maximum deposit.





lizardbrain

1,939 posts

36 months

Friday 17th March 2023
quotequote all
Louis Balfour said:
If there has been no agreement to a pet the landlord can either seek to secure their financial position, or serve notice. The Tenant Fees Act (2019) limits the deposit, so they can really only insist on a guarantor if you've already paid the maximum deposit.
But what typically happens. Is eviction the most common response? (Assuming no damage) What if the tenant refuses extra deposit?




Edited by lizardbrain on Friday 17th March 08:42

elanfan

5,516 posts

226 months

Friday 17th March 2023
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Daughter is in a houseshare. It’s been dreadful from the off. Black mould, water running down walls, treated by landlord/letting agent though mould blamed on them. Walls are damp skirtings rotten. She literally has slugs coming into her room. Numerous contractors turning up with no notice. Noise whilst daughter works from home. Thankfully only 3 months left on tennacy.

Latest is the letting agent texted her (not any of the other 4 housemates) Weds evening saying scaffolders would arrive Friday morning to cover entire house ready for contractors to remove all the render off the house to try to cure the damp issues. Talk about having quiet enjoyment of the property?

Council already involved over previous issues, daughter has copied council into email telling letting agent no. Let’s see if he listens I expect not.

Louis Balfour

26,271 posts

221 months

Friday 17th March 2023
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lizardbrain said:
Louis Balfour said:
If there has been no agreement to a pet the landlord can either seek to secure their financial position, or serve notice. The Tenant Fees Act (2019) limits the deposit, so they can really only insist on a guarantor if you've already paid the maximum deposit.
But what typically happens. Is eviction the most common response? What if the tenant refuses extra deposit?

Edited by lizardbrain on Friday 17th March 08:35[/footnote]
There is no "typical" because landlords vary so much from casual ones to hard-nosed professionals.

What would we do? We'd give you notice if we felt that you had misled us and then not put us in a secure position financially.







croyde

22,701 posts

229 months

Friday 17th March 2023
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You say that the LL should raise the rent every year.

Why?

My wages have not gone up in years. I have stayed a while in properties where the LL has treated me well and I have looked after the property.

Anyone raising rent after only a year and I'm off.

Gazzas86

1,707 posts

170 months

Friday 17th March 2023
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When work needs doing on a property that is managed by you, and you are asked by the LL to go and get quotes, do you get 'backhanders' for choosing a certain contractor?, does he give you a Christmas hamper each year, a cut of the costs, discounted work on you're own properties etc. There must be some sort of arrangement

Louis Balfour

26,271 posts

221 months

Friday 17th March 2023
quotequote all
superlightr said:
Pets

tricky as "technically" a LL must consider allowing unless there is a reasonable reason not to. Many LL are reluctant for Pets (we would general refuse tenants with reptiles based upon a number of bad experiences). Cats/Dogs ok depending on numbers and how they are kept. we would try and educate the LL to allow pets as it would open the property to a wider market, we could charge a higher rent and simple maths to show they would get more rent which would cover any realistic risk was worth it business wise. We/I would always recommend to allow a pet 1 or 2 unless flats etc where they would be excluded under the head lease. 8/10 the LL would follow our advice and it would work out well. pets are not a problem.
Not wanting to derail the OP's thread, but the main problem with pets is that owners rarely, if ever, understand how much damage they can do. As a consequence, they are reluctant to pay a deposit large enough to cover the potential damage. They love their pet and in their minds said pet can do no wrong.

A single cat can easily trash a set of carpets, soak the underfloor in urine and impregnate the decor with cat smell, whilst using parts of the kitchen as a scratching post.









GT03ROB

13,207 posts

220 months

Friday 17th March 2023
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Jiebo said:
Most cowboy landlords mortgage the property, so it’s actually the banks property, not theirs.

I’m of the opinion that landlords should legally not be able to disallow pets, as long as all damage is covered. In many ways they cause as much damage as small children.
I wouldn't let to a family with kids either! biggrin

lizardbrain

1,939 posts

36 months

Friday 17th March 2023
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Google thinks 50% of the population have pets. (62% according to one recent survey)

6% of rentals permit pets. Even allowing for ownership type the numbers suggest it’s rife!

OP I'm still curious to know what the most common response is to a pet discovery? It must happen all the time?

Edited by lizardbrain on Friday 17th March 10:29

Louis Balfour

26,271 posts

221 months

Friday 17th March 2023
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Jiebo said:
Most cowboy landlords mortgage the property, so it’s actually the banks property, not theirs.
Wrong.

By the way, the majority of entities that build and operate housing stock have mortgages of one type or another.