Do I Need To Use A Letting Agent? No.

I’ve just had one of my tenants vacate after 4 years of faithful service. It’s an extremely sad and emotional moment… because now, I’m thrown into the agonising process of finding suitable replacement tenants, which despite popular belief, is a gut-wrenching task. Not only that, but it’s also a brain-numbingly boring process, which is often extremely infuriating and frustrating.

Scheduling viewings with potentially dozens of prospectives can specifically be infuriating, because when you start dealing with a large volume of people, you start to realise how unreliable people truly are. That’s just how it is when you work with people. We’re unreliable, selfish idiots. But despite all that, I still refuse to use letting agents and allow them to takeaway some of the stress and hassle, for the following reasons…

Letting agents are expensive

The most obvious reason not to use them.

They’re ridiculously expensive, but not in a fair way (because I could deal with that scenario), mostly in a snake-oil conniving way. On the surface, their flashing prices can often seem compelling, but it’s when the small print and terms & conditions are given some attention, that’s when you suddenly realise that they’re an extremely expensive commodity in a cowardly, greasy fashion. And with the rise of “fixed-priced” Online Letting Agents, high-street prices just doesn’t make sense anymore. Not in many cases, anyways. A lot of Online Letting Agents even offer rent collection and rent guarantee services, which is the complete management solution. Essentially, it’s very easy to replicate what letting agents do at very little cost these days.

Tenancy renewal fees

While this reason does come under letting agents overall cost being overpriced, I’ve singled-out this particular cost because I believe the tenant renewal fee crosses a moral line. The fee is unfair, unnecessary and unwarranted. Anyone that adheres to applying this fee won’t receive a penny of mine. Pffft.

Letting agents are just as helpless as everyone else if something actually goes wrong

The bottom-line is, in the unfortunate situation where a tenant falls into arrears, the letting agent won’t lose sleep over it. They won’t even spend a moment worrying about it. In fact, they’ll probably charge me extra for serving the eviction notices, so they may even welcome the occasion.

In reality, if a tenant ignores the eviction notices and refuses to pay rent and/or vacate the premises, there is nothing the letting agent can do. So all that money I’m paying them to manage my property can often seem like money down the drain.

My point is, agents will happily and easily handle the mundane tasks that anyone can do, but if the situation turns sour, I’ll have to take control and do the worrying, so what am I paying for exactly? Oh yeah, rent collection and occasionally dealing with repairs, which isn’t actually that much work.

I’m just as capable of finding tenants

Letting agents don’t have access to a magical list of prospective tenants that anyone else, like you and me, cannot access. We can all reach the same audience by using an Online Letting Agent and their tenant-find service, which can cost as little as £42.50.

I’ve had an high-street letting agent charge me £750 only to find me a tenant that fell into 2 months worth of arrears almost immediately. I eventually had to evict her, which was an added cost. So if you think you’ll always get a better quality of tenant from an agent, you’ve been grossly mislead. Most letting agents run standard tenant referencing steps, which anyone can do. But from my personal experience, a landlord is capable, and has more incentive, of running a much better tenant referencing program.

The middle-man can often slow down processes

Having a letting agent as the middle-man can often slowdown and complicate matters when something at fault needs attention. For example, when an appliance needs repairing, the tenant will need to contact the letting agent, and then they will need to contact the landlord. At this point, the landlord may appoint their own labourer to resolve the situation.

I’m suddenly in the middle of a 4-man chain, which may not sound too tedious, but you’d be surprised at how difficult it can be to distinguish what the actual fault is, to arrange a suitable labourer to remedy the situation, and arrange an appropriate time to resolve the situation between 3-4 people.

The fewer people in the chain, the more effective and easier life is.

No one will care as much as the landlord

It’s a fact. No matter which letting agent I use, they will NEVER care about my investment as much as I do. That instantly makes me want to manage my own property, because I genuinely believe I will mostly make better judgements to protect my investment, while letting agents usually have other own priorities and incentives (and I don’t blame them).

Most Letting agents don’t know the law

Letting agents don’t need qualifications, which is unfortunate, because there’s a lot of red tape in this industry. I’m amazed at how misguided and illegal the advice and practices letting agents advocate- not only do I know this from personal experience, but from the comments other people have left on my blog. That worries me, a lot.

Not only are many of the grey tenant/landlord legal areas misrepresented, but alarmingly, even the statutory regulations are just as frequently misrepresented. For legal advice, I wouldn’t rely on letting agents, ever. I would seek advice from a tenant eviction professional (that’s usually when legal advice is required), Citizen’s Advice, a specialist landlord law solicitor, or become a member of a reputable landlord law society or association.

Simply, I struggle to trust letting agents

I’ve personally encountered many letting agents over the years, some have been extremely decent and honourable people, while many have been lying, money-grabbing parasites. The problem with any commission-based jobs is that it inevitably attracts the latter type of person. It’s the nature of the beast.

I hate stereotyping the industry, because I know there are a lot of good men standing, but unfortunately, it’s extremely difficult to spot the difference between the good and the bad without going for a test-drive. And in reality, I can’t afford to take a test-drive, because by the time the ride is over, it’s usually too late (assuming the agent is an idiot). I’d rather avoid the game of Russian Roulette from the start. Basically, the industry is just full of too many idiots, which makes it difficult to trust anyone.

So there you have it, a list of reasons why I personally don’t use letting agents. But I’d like to clarify that letting agents aren’t perfect for everyone, but at the same time, they might just be perfect for someone. Letting agents have their uses, which I won’t and can’t deny.

What are your thoughts? Can you think of anymore reasons to why you shouldn’t use a letting agent?

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21 Comments- Join The Conversation...

Guest Avatar
Justin Burns 27th January, 2009 @ 07:13

In the interests of balance; 10 reasons to use Letting Agents

1. If you have a 2-3 week void as a result of your limited
marketing you will lose more than the letting agent’s fee.

2. Because they work on commission they have an incentive to negotiate the best rent for you.

3. If you are lucky enough that the tenant they found stays for a further term they reduce their fee significantly.

4. Because they can provide a regular stream of work they have access to the best and most reliable tradesmen.

5. They can offer you a rent guarantee in case the tenant doesn’t pay.

6. They take up comprehensive references to reduce the chances of finding you a bad tenant.

7. They can feature your property on popular websites that aren’t available to private Landlords such as Rightmove.

8. They provide a buffer zone between Landlord and tenant which can help a Landlord avoid promising something they later regret.

9. They can advise you on repairs and a maintenance schedule to ensure that your property holds its value.

10. Use the time you’ll save to go and do some charity work.

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The Landlord Avatar
The Landlord 27th January, 2009 @ 07:38

Great list, Justin. I don't particularly agree with all those points, but I won't interfer as i'm sure you don't agree with all my points. However, do you mind if I make it an individual post?

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Kath 27th January, 2009 @ 09:33

I'm considering signing one of mine on with a letting agent after failing to find a tenant privately.
The letting only option is £250, its expensive sure but I'm hoping they'll find me someone quick.

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The Landlord Avatar
The Landlord 27th January, 2009 @ 10:24

Hey Kath,

£250 is not too bad actually. The property I have is on the outskirts of London, and the local agents want 8-10% of the rental income. Which I find a bit too much.

Is the property in question situated in a well populated city? From what i'm hearing, rental properties are getting snapped up quickly. But I guess it depends on geolocation and availability.

Do you know if the agent is going to charge you a renewal fee, if you keep the tenant beyond the contracted terms? That's a killer!

But I definitely endorse your consideration to use agents. An empty property is the last solution, i'd rather pay an agent to fill the space if I was struggling to find tenants!

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houseofcards 28th January, 2009 @ 15:46

For the first time in my life I am going to agree with property investor.

Estate agents are the most pathetic pieces of rat turd in this planet. With their 50 quid suit and slickly styled hair and/or goat beard that would make hard stomachs vomit, they pranse about thier office thinking they own you when you walk in.

They are so unbelievably up thier own arse with thier Plymouth polotechnic degree in housing management or whatever piece of shit degree they have. If any....

As the property I own is not in this country, a collapse in property prices here is simply fantastic news for myself. I pride in them losing thier jobs considering its an industry 90% of the population would be too ashamed to even consider entering.

Imagine meeting someone for the first time and them saying 'I work for Foxtons'. I would piss myself laughing and then walk away.... No reply necessary.

This is a very bitter reply I admit, and yes I have had personal dealings with these people, many times. All but one have been sneeky, lying, sleezy, two-faced, back-stabbing dickheads that I would refuse to piss on if they combusted in front of me. In fact I would fuel the fire.....

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Kath 28th January, 2009 @ 21:51

Woah woah woah house of cards!!

That is the most vitriolic post I have ever read!

Tell me, are you posting similar comments on boards for say people who work for lending houses? Finance companies, utility companies, internet houses etc?!
Because all of these industries can be seen to be making shed loads of cash from the joe in the street....
The fact that you think a housing crash is fantastic news is just awful! Granted you clearly have issues with estate agents (did you lose out to a Foxtons negotiator in a 'whose got the biggest dick competition'?!) But think of all the home owners in negative equity, first time buyers who have innocently stretched themselves to buy their first home, solicitors who carry out the conveyance, the guys carrying out the HIPS/EPC's, companies who put up boards etc etc......

This property crash has affected far more people than just greedy estate agents and we should all be regretful of that.

I have dealt with many agents over the years and have had mostly good experiences, sure I don't like paying 1 - 2% for someone to sell my home but I view them as a nessecary evil. In the same way I don't like being forced into paying the bbc license fee when the other channels are free or I have to pay road tax when I I already pay so many taxes. But hey you know what? You an chose to vote with your feet! If you don't like agents then don't use them.

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houseofcards 30th January, 2009 @ 00:06

I agree that one cannot blame estate agents for the problem. In fact they have nothing to do with it if you were to consider a world where credit access was not inflating.

However, perhaps my point was misunderstood in my peice.

My point was talking of estate agents themselves as people. They are, and I quote myself "sneeky, lying, sleezy, two-faced, back-stabbing dickheads"

Again, I probably took it too far in saying the recession was good because clearly it is not, but I merely wanted to illustrate and amplify my hatred for estate agents, by claiming it was good because it is they that are losing their jobs.

The day a loyal, truthful and trustworthy estate agent comes about is the day Gorden Brown admits there were some serious errors in his economic policy............NEVER

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dom 24th February, 2009 @ 22:19

house of cards-

I am utterly disgusted by your comments, me and another female collegue were made redundant in November one month before xmas with no money to pay bills and kids to feed! I understand your comments as i feel the same hatred towards traffic wardens but remember these "estate agents" are people too and are trying to provide for their families like anyone else! Please remember this next time you decide to post a ridiculous commment.

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Dr Nogood 4th March, 2009 @ 22:42

House of cards...I am wondering if you are an ex estate agent yourself. You use words like "Myself" when you mean "Me" and refer to "Polotechnic" degrees when you do of course mean Polytechnic...you seem like a sub hundred IQ desperately trying to play with the big boys (those with 101, 102, or sometimes 103 IQ points).

Your hatred of estate agents is well founded, but your pathetic gramatically incorrect rants do you no credit. I suggest you go to a polotechnic and get yourself some educashun.

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GillsMan 5th March, 2009 @ 16:36

When your argument is reduced to picking up on minor grammatical errors, you're really clutching at straws IMO.

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Phillips 30th May, 2009 @ 14:31

I see both points of view. I have never let a property without an agent but now I am looking into it. I am no veteran. I have only let seven times but my experience has always been bad and that was with five different agents. What annoyed me apart from the ridiculous fees especially the renewal fees for doing nothing is that they did not do much else either. Sure they put a card in their window (5/7 times describing a different property twice with matching wrong photo!), found tenants of varying quality eventually. Then pressed print on a fantastical tenancy agreement most of which did not and could not apply. Apart from that and taking my money of course they did absolutely nothing. No Internet ads which they all promised, inventory always wrong, references often not worth the paper they were written on or none at all, never inspected the property once and never performed a final inventory. Not that it would have been much use as it was always wrong to start with. Anything that went wrong with in their terms a 'managed property' the tenants ended up calling me as they could get no where with the agents. Many were also very rude to me, I am not surprised they have a bad name. I am sure there are good ones but I have now run out of ones to try in my London post code. What amazes me is that most of the major property web sites will only deal with you if you are an estate agent. Maybe they treat them better than they do their clients....

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Scott 13th May, 2010 @ 17:39

I'm considering renting my property.

I was going to use an agency but have now started to think differently.

I understand what the flat fee up front gets me, advertising, tenant venting, legal contract between tenant and landlord.

However unless i am missing something obvious, if i get a reasonable tenant who pays the rent and nothing goes wrong with my property, what would i actually be getting for the £45 a month my letting agency would claim from my rent? nothing?

Then i have to pay another fee each time i renew the contract with the tenant.... again, why? what am i getting for my money?

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Gary Ash 28th July, 2011 @ 07:15

Letting agents exist solely for those Landlords 'who don't want the hassle' of having to deal with tenants themselves, full stop.
From a tenants point of view, letting agents simply have no reason to exist. They charge for a process which already worked perfectly, that didn't need a middle man. Problem is that letting agents have now made themselves a discriminatory gateway between tenant & landlord. Self employed tenant? You'll need to pay 6 months up front then. On benefits? don't even bother 'applying to be a tenant'. What b*llox.

I'm with The Landlord on this. Letting agents - get rid of them.

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Not very happy 19th July, 2012 @ 07:16

We are letting our property in London and to be completely honest with you...IF letting agents were honest and upfront about things it would help them greatly. After our initial 12 months, which I thought was our agreement with the letting agent, we decided we could collect the rent ourselves and save the 250 pounds a month this service was costing us. Instead we were told that as long as the original tenants, or ANY of the original tenants remain in the house, we are bound to the contract! There is no way out of it unless our original tenants move out. CRAZY! We manage the property. I have managed a major leak from the bathroom, which caused the ceiling downstairs to cave in and walls to crumble, replaced the boiler, serviced the fridge, serviced the dishwasher AND bought a new washing machine. ALL without the agent doing a thing of course. We were grateful they found the tenants to begin with which happened to be neighbours of the estate agent that were looking for somewhere new...so no advertising was necessary. We were happy to pay them for the first 12 months but were shocked to find out that we will have to pay them for however long. This was not told to us upon signing the agreement. PLUS to make things worse..anything extra they do, even printing out a rent collected tax form....they charge us 80 pounds!!! What the???? I mean - hell 250 pounds for a simple bank transfer, where they don't even lift a finger... PLEASE!!!!

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pete 15th September, 2012 @ 17:18

Not Very Happy - not very clever more like.

How about if your tenant stopped paying the after a year because, 'oh I thought that it was only a 12 month agreement therefore I could stop paying rent and carry on living here'. I presume you would quote the contract that was signed and question whether they read and understood it before they signed it? So why didn't you do that with your contract with the agent. If the renewal fee is in the contract and you signed it then stop eff'ing whinging now.
If it wasn't in the contract you agreed, then it's unenforceable and there are ways and means to prove that.

For pitys sake, all of the posts on this website seem to slag off letting agents - apart from the moronic plankton who can't tell the difference between letting agents and estate agents.

Using a lettings agent is not like car tax - if you don't want to pay for it don't use it. Go on your merry way, congratulate yourself on your penny pinching ways, (which will mean more tax in any case as fees are tax deductable), and accept that you will collect a few more than average rogue tenants, because the rogue tenants will always try to avoid professional agents.

Or.... you could find a good letting agent who is recommended, fair, clear and straightforward in their business - and then pay the going rate for the service rather than try to screw them down to the rate of the lowest fly by night. pay peanuts get monkeys.

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Nick 23rd August, 2013 @ 16:20

An old post now for sure, but I have to point something out everyone seems to be ignoring.

The fee you pay a lettings agent is tax deductable, meaning yes you have to pay it initialy, but you can claim and offset the full amount - not just the vat - against your taxes.

Therefore, lettings agents are free :)

Source - many years of renting several of my properties via letting agents (NOT estate agents).

Peace out.

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Nick 23rd August, 2013 @ 16:27

Also, statistics are out there for you to view. 1 in 3 private tenants are currently in rent arrears with their landlords. This figure is much lower for lettings agents, at an average of around 9%. Some agencies that have much more stingent referencing are around the 1% mark.

Also, everyone is moaning about renewal fees. If a tenant wants to sign up for 3 years for example, and the agency does not charge a renewal fee, then the landlord would simply make them sign a one year contract and then renew it twice for free. Remeber everythingi s negotiable with a lettings agent as they want your business.

However, you get what you pay for. I have been using my London lettings agent for several years now. They manage three of my properties and I look after the forth as it is on the street I live in and I have never had a problem with them.

I feel this thread is giving them a bad name, and no one is fighting for their corner. They offer a service at the end of the day, if you don't want it, don't take it.

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Nick 23rd August, 2013 @ 16:36

Pete, what are the odds of that. No one posts for just under a year, and then we both post within 7 minutes :o

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Benji 24th August, 2013 @ 11:33

@Nick,

"The fee you pay a lettings agent is tax deductable, meaning yes you have to pay it initialy, but you can claim and offset the full amount - not just the vat - against your taxes.

Therefore, lettings agents are free :)"

That is total bollocks. The letting agent that sold you that one must be laughing his head off over the "many years of renting several of my properties via letting agents.

Here is why;
Landlord makes £1000 profit on his rentals.
Without a letting agent he pays 40% tax i.e £400 (assuming a higher rate payer)
Therefore £1000-£400 = £600 profit after tax

Landlord makes £1000 profit on his rentals.
With a letting agent he pays £500 commision to them.
He is then taxed on the remaining £500 at 40%
Therefore £500-£200 = £300 profit after tax

Letting agents are certainly not free :(

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Benji 24th August, 2013 @ 11:37

@Nick,

"Also, statistics are out there for you to view. 1 in 3 private tenants are currently in rent arrears with their landlords. This figure is much lower for lettings agents, at an average of around 9%"

Have you got a reliable link for that or is that what your letting agent told you?

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Arps 11th December, 2013 @ 22:09

In the beginning we used letting agents to manage our portfolio (15+ units) for tenant find and rent collection.

Tenants would not always pay on time and we would be the last to find out. If something major went wrong it would always be on us to fix it or have the agent fix it at "inflated" prices.

Then we switched to tenant find only - worked much better. We used an independent agent who was good at the start. Then he stopped paying for right move - switched to zoopla and gumtree! Became harder to get in touch with, and time wasting.

Now I've been three lets without an agent. I'm sure I will get a few wrong and I'm sure I will get a few right. Either way the use of traditional agents has to be coming to an end. If they tenant doesn't pay they don't care!

Most Letting agents are oiks.

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