Like many landlords you may be tempted to choose a letting agent based on the cost of their fees. But doing so could prove to be an expensive mistake.
Searching for lettings management in Stamford? Like many landlords you may be tempted to choose a letting agent based on the cost of their fees. But doing so could prove to be an expensive mistake.
Lettings management in Stamford: the false economy of cheap fees
Here’s a question. What’s the most important thing to look for when choosing a letting agent in Stamford? Many landlords - wishing to protect their profit margin - compare letting agents based on their management fees. Bad idea. Because unfortunately that’s a false economy.
You see, not all letting agents are born equal. The money that you can lose by choosing the wrong agent dwarves the money you can save by choosing an agent whose fees are 1% or 2% cheaper. To illustrate, let’s say you have a property where the rent is £950pcm. Here at Belvoir Stamford & Bourne we charge a 10% management fee. That would work out at £95pcm or £1,140 across the course of a year.
Now, let’s say you find a cheaper agent. They only charge a 9% management fee. That works out at £85.50pcm, equating to a saving of £114 across the course of a year. £114 isn’t much of a saving, but the gulf in quality between letting agents can be huge. That’s why it’s always best to cast a careful eye over each agent’s service offering before you make your decision.
Otherwise you could be left severely out of pocket.
Tenancy voids: no heel-dragging here
It’s true what they say. Time is money. That’s especially true when it comes to letting property. Each day that your property remains unoccupied means lost revenue. With rent of £950pcm, even a one-week tenancy void adds up to more than £220 of lost income - and the longer your property is unoccupied, the more money you lose.
That’s why it’s crucial to choose a letting agent with the capacity to prioritise the process of sourcing new tenants for your property, processing the paperwork swiftly and negating the impact of tenancy voids. That’s something in which we excel, while some agents seem to take perverse joy in dragging their heels.
Could your rent be higher?
Recognising market value is an important skill. Even a slight discrepancy between what you are charging and what you could charge adds up to a major loss of revenue. For example a loss of just £50 per month adds up to £600 across the course of a year. In that context, saving £114 per year on letting management fees suddenly doesn’t feel like such a coup.
Here at Belvoir we insist on a high-level of local knowledge. It’s our line in the sand and an ethos that’s sewn in to the very fabric of our business. We recognise that rental value differs from street to street - especially in areas like Stamford and Bourne. With us you get an expert who considers both the nuances of property and place and writes regular rental reviews into tenancy agreements.
That way you can be sure that you are always earning what you should be.
For some it’s one of the less glamorous aspects of property management. But - in short - maintenance matters. Failing to stay on top of maintenance costs you more in the long run as things fall into disrepair. With Belvoir you get a dedicated property manager, who visits quarterly to conduct a thorough check on your property and make sure everything is in order.
The legal implications of shoddy repairs
Boilers break. Old water pipes leak. Things need repairing. That usually requires a contractor. But did you know that engaging poor quality tradesmen can have serious legal ramifications? If one of your tenants were injured as a result of contractor negligence, it would be you that was responsible, not the contractor.
Here at Belvoir we manage hundreds of properties. We know the going rates for common repairs and have property managers on the ground to oversee the work carried out at your property. We can even manage the process of charging repairs back to your tenants if they were at fault. Most importantly we ensure repairs are completed by reliable, accredited and fully insured professionals to keep you on the right side of your legal obligations.
>> 13 legal obligations you must abide as a landlord
Damages and deposits
Another thing to check when choosing a letting agent is their process for compiling inventories and conducting final inspections. Without them you lack evidence to extract damages from the tenant deposit at the end of the tenancy. That could cost you several
hundreds of pounds if repair work is necessary. We compile inventories week in, week out - and can even help you to prepare for small claims court in the event of a dispute.
What happens if the rent isn’t paid?
Unpaid rent is a serious spanner in the works. If one of your tenants fails to pay on time (or at all) it can leave you with significant cashflow issues. Then there’s the time and potential cost (legal fees) of chasing it. So be sure to ask your letting agent about their procedure for collecting unpaid rent.
Here at Belvoir we offer all landlords the option to subscribe to our Rent Guarantee service. It gives you cast-iron security that in the event of any unpaid rent, we will cover the shortfall to ensure you receive your full rental income as normal. We will also chase your tenant(s) for payment on your behalf - keeping you in the loop every step of the way. If the arrears are not cleared we then cover the legal costs of evicting the tenant via the courts if required. You don’t need to lift a finger. Not all letting agents can say the same.
The false economy of management fees
It’s a perfectly natural impulse to weigh up letting agents based on their management fees. But as you can see, a 1% or 2% saving typically translates to a few hundred pounds per year. Whereas choosing a poor quality agent could cost you thousands of pounds, not to mention a lot of stress. Then conclusion? Always examine an agent’s service before making any final decisions.
If you would like to know more about Belvoir Stamford and Bourne, please feel free to contact me directlyor visit our website.
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>> Avoiding mistakes when choosing tenancy agreements in Stamford and Bourne
>> 9 reasons it’s fabulous to live in Stamford and Bourne
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Luke Clarke is Belvoir Stamford Lettings Manager. Luke has over 12 years of property experience and has built up unrivalled expertise in the lettings industry and remains a tried and tested advisor for landlords who not only intrust Luke with the complexities of day to day property management but also to assist them with the ongoing development of their property portfolio.