How much should you pay your letting agent ?
We have all heard, hopefully not seen, the horror stories that happen with tenancies, homes ruined with wanton destruction and high figures of rental shortfall.
Being a letting agent, we see the value in appointing one, but what value should you pay for a letting agencies service?
Over the years we have seen so many letting agency contracts and there does not appear to be a one size fits all, with different companies having different quirks. These range from the numerical value of their commission fees to mark up in cost, new tenancy find fee, exit fees and even VAT.
From a sales point of view, should the agency ever been sold, the lengthy notice periods, high exit fees and mark up in commission costs all add value to the agents book value. This has no importance to a Landlord looking for great service and value, today.
Percentage or Fixed Fee?
Should you pay a percentage commission, or should you pay a fixed fee? Both have their own merits but we firmly sit on the side of fixed fee. At the moment, we are the only agency that we are aware of that does this in Edinburgh.
A perceived benefit of a percentage-based commission is that with the agent getting a percentage of rental income this would push an agent to achieve the best possible price. Professional ethics would ensure this was not the case but for a long-term tenant, would having the most expensive home on the street be an advantage to keeping a tenant? Should another property become available for a few pounds less, the tenant is unlikely to move. Should the saving be a hundred pounds per month, or more, we can easily see the benefit of moving if the saving is thousands of pounds over the years.
Benefits of a percentage commission structure?
A benefit of the percentage commission structure is that some, not all, agents include one free tenant find per year within their structure. This is great if you have to relet your property once every year, should it be more, you will pay and if you do not have a new tenant within the year you have paid for a service that you have not needed, or used, with very slim chances of getting a refund for service not used.
The Management is the same
The works required to let a property at £500 or £1,000 per month is the same. Each property would have the same works to advertising, viewings and day to day management so why pay more commission for a property that is rented for a higher value? If an agent is happy to take a commission of 10%+Vat on the £500 per month property ie £60, what additional value does the Landlord get for paying £120per month on the higher rented value property?
At Win Win Property we do not charge for services not needed and are happy to charge a fair commission.
Check out our website https://winwinpropertymanagement.co.uk/ to see how much you could save.
Now, the only question left is what are you are going to do with the savings?
#FixedPriceBeatsCommission #Fair
