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An Example Of How Much Extra Letting Agents Charge

Written by The Landlord on 24 Sep 2010

Since yesterday, I’ve been leading a tenant finding campaign because a current tenant of mine is due to leave pretty soonish. I’ve already placed an advert on Gumtree, Tepilo (for the first time) and I also plan on using Discount Letting to get my property across all the major property portals like Rightmove and FindAProperty.

Now, the thing with Gumtree is that it’s a haven for the lowest form of letting agents. They watch properties on their like hawks, and prey on landlords like rotting corpse on the side of the road.

They contact private landlords advertising on Gumtree and try to convince them they can find tenants quicker than Gumtree. These agents aren’t always located close to the property, but then again, they don’t need to be! From my experience, they try and capture the landlords’ interest by offering the following incentives:

They’ll arrange the tenancy agreement for you
They’ll reference the prospective tenants
They’ll get your property across a large network of websites e.g. Rightmove

The letting agents know they’re useful services Gumtree don’t offer, so they use it as a major part of their sales banter.

I was graced with one of these calls earlier today, from a letting agent that saw my advert on Gumtree. The guy seemed really excited, like he was offering me a deal of a life time. After he opened his sales pitch with, “We have plenty of tenants in our books looking for a property in your area of your description” (of course you have, cock-sucker), he enthusiastically described what he was going to do for me:

We’ll find you tenants for £150
“we’ll arrange all the contracts for you”. That’s exactly what he said. Of course, “all the contracts” actually meant “Tenancy Agreement”. But fuck it, “all the contracts” sounds so much better, doesn’t it?
We’ll reference the tenants
We’ll get your property on websites like Rightmove
We’ll come to viewings with you
If we don’t find you tenants, you don’t have to pay a penny

At the end of his little sales pitch, he seemed totally hyped, and eagerly said, “Now, how does that sound to you?”

I dully replied, “Sounds ok, but i’m not interested”. I think he was disappointed, because he wanted me to be as enthusiastic as he was. Perhaps he wanted me to get on my knees and deflate his balls and continually thank him for the rare and golden opportunity he was offering me.

I was actually being nice when I said “sounds ok”. I actually thought the deal was pretty shit because I knew exactly what he was going to do and how little it will cost him to do it, if I agreed. To the average novice landlord, what he was offering may have sounded like sweet apple pie. But to me, sounded more like diarrhea Soufflé.

All the agent would have done is stick my property on websites like Rightmove, receive the enquiries, and then forward them into me. A traditional highstreet letting agent would typically provide a much better and personal service.

While the agent wanted £150 for his services, I could do exactly what he was offering myself for £50, without breaking a sweat. That’s a massive saving, right?

How Landlords can do the letting agents job for a lot less money

Arranging contracts

A Tenancy Agreement can be downloaded from my site for £4.99. Simple. No point overcomplicating that shizzle.

Moreover, I’ve seen a lot of agents use junk tenancy agreements that aren’t always up-to-date.

Tenant Referencing

I recently wrote an article on how to take advantage of a Free Tenant Credit Check Service For Landlords, no strings attached. Alternatively, I’ve also put together a List Of Tenant Credit Check Services For Landlords, which average at about £12.

Getting a property on Rightmove

This isn’t as difficult as it sounds. In fact, it’s not even remotely difficult. There are dozens of websites out there that will get your property on websites like Rightmove for a small fee. Here’s a list of websites that will market your property on the biggest property portals in the UK, not just Rightmove.

Prices vary from £30-£60, but it all really depends on the package.

Tenant Viewings

This is the part that confused me. As part of the deal, the slimeball said he would go to viewings with me. Seriously, what fucking use is that to me? We’d look like a right pair of lemons if we took viewings together. Am I meant to stand there in a pair of tights and a cape and be his sidekick? Taking a viewing is a one man job, not a job for a homosexual couple.

It would have been different if he offered to take the viewings by himself because that would have been useful, especially for those who can’t be bothered to take viewings. But for us to both attend a viewing…Pointless, and kinda creepy.

No tenant, No fee

This may sound appealing on the surface, but it’s totally not, because it literally costs them PENNIES to acquire a landlords business from Gumtree and stick the properties on websites like Rightmove.

Letting agents already have fixed costs to cover the services they offer. For example, they already pay Rightmove £500 every month to list their entire stock on their website. It won’t cost them any more to put more properties on Rightmove. The only cost incurred from the acquistion of a landlord from Gumtree is small quanities of time and an insignificant phonebill, which isn’t even equivalent to a bean.

An agent may contact 50 landlords per day from Gumtree, and 10 of them may agree to the £150 deal. All the agent will do for that £150 is stick those 10 properties on websites like Rightmove and arrange viewings when the enquiries come in. A monkey can do that.

The agents that contact landlords via websites won’t typically offer a personal face-to-face service, it will be completely virtual, because the odds are the agency isn’t based anywhere near the property or landlord. But that’s ok, because they don’t need to be close in order to get a property onto Rightmove. It’s a savage ploy! It’s literally like paying someone £50 to contact your local paper to place an advert for £30. In reality, you can contact the local paper yourself and pay £30, saving yourself £20 labour.

Bottom line, all the agents want to do is get as many properties as possible in their books via Gumtree because the acquisition costs pennies, and they know they won’t have to provide a personal service. The letting agents have got nothing to lose, only plenty of money to make.

Consider Value

If you get approached by agents who have seen your property markted on a website like Gumtree, think about the value you’re actually getting before accepting anything.

Upad.co.uk Review To Find Tenants & 50% Discount Code

I Didn’t Receive A Single Enquiry From Tepilo

Extra Unforeseen Costs Of Buying A House

10 Reasons Why You Should Use Letting Agents

Why Do Letting Agents Charge Tenants An Admin Fee?

How Much Rent Should I Charge?

12 Comments - join the conversation...

Andrew Mills2010-09-24 14:35:50 Seems like you could make a little extra money finding tenants for other landlords... 1

andy sheppard2010-09-24 15:51:59 I agree with your comments. Just started the property game with my first buy to let that i purchased at auction. These agents already piss me off with a load of 'experience' as they call it, bullshit to me! I am trying to learn all of the ins / outs for myself because these agents can stick their fees where the sun can't shine! I am sure it is not easy but I would rather learn the hard way than give my money away. 2

GillsMan2010-09-25 10:11:29 "But to me, sounded more like diarrhea Soufflé." Hahahaha! Brilliant. 3

Smithy2010-09-25 11:05:17 Hi Landlord,

You wrote recently about using Upad to find a tenant - cost £59. They advertise on Rightmove etc.

They were at the Landlord & Letting Show, giving out cards offering a 10% discount. I won't be using mine, so if you want to use it, the 'discount code' is BD001.

PS: the little cartoon figure in the mac which features on your website. Is that really what you look like? 4

The Landlord2010-10-01 11:11:23 Hey Smithy,

Thanks a lot for the code. Right now I don't need it, but I'm sure someone else will use it :)

Yes, the cartoon looks like me. Although, I'm plenty more sexy in real life! 5

Sam2010-10-05 12:03:44 Andy - owning a buy to let involves a lot of regulations and legislation and if you get it wrong could cost you a whole lot more than what a decent agent charges.

Admittedly not all agents are great, but I think you're missing a trick if you don't find a decent one to start with and learn from.

Mistakes can be expensive - esp. if your tenants decide to hang you out to dry. 6

andy sheppard2010-10-05 18:59:06 Sam

Point taken but at 7.5% to 12.5% a month and a finder fee of about £300 it actually takes the profit away. I am undertaking a landlord association course to understand the laws and stuff and will probably try a local advert and a free add with makeurmove. I may be wrong but if i understand the ins/outs/pitfalls for myself then as my portfolio grows I will be able to engage with an agent on an informed basis and hopefully get a deal that fits what i want to pay for. I have nothing against agents but i do have a problem with then fees they charge compared to the actual work content, remind me a bit of bankers - now dont get me started on that one! 7

rentdirectuk.co.uk2010-10-11 20:06:21 Not advertising or spamming but i do believe we offer landlords a good tool when looking for tenants, check out our tenant database online. We have prequalified tenants for you to view now. copy and paste this link to view hundreds of tenants, http://www.rentdirectuk.co.uk/landlord_tenants_matches.php?action=search

You can also advertise your property for free 8

Sam Watterson2011-02-03 22:32:32 The business I run offers a similar service, I would conduct the viewings myself though. I charge £200 to let a house and that includes photos, writing the advert, arranging the viewings, referencing the tenants, sorting out contracts moving in the tenants and taking meter readings. People use my services because a buy-to-let is usually the fruits of additional cash brought about by a successful career..... The last thing a busy, stressed professional wants to deal with is muppets ringing at 10.30pm to arrange viewings or rushing home from work just to be stood around for half an hour waiting for someone who doesn't turn up. I should know I rented out 4 houses whilst having a full time job, it was such a fucking pain in the arse that I quit my job to do it full time for other people. The oldest business model in the book Hassle for cash...... I despise people who ring me because of an advert on gumtree, they are weak individuals who couldn't qualify a scotch egg let alone a potential tenant..... As for the high street, pfffff.... I've usually found a tenant before they've finished their coffee and worked out whose lost the office camera.
The problem with a part-time landlord is they make mistakes, mistakes I made 5 years ago that cost me money, I wouln't make the same mistakes again now for me or for anyone else... Feel free to look at my web-site and deliver feedback as you see fit. www.morrison-watts.co.uk 9

Sam Watterson2011-02-03 22:33:27 P.S if you want an official tenacy agreement for free email me and I'll send one over. 10

Helen2011-06-11 15:14:04 I have been letting a small number of flats for 15 odd years and have never used an agent. Just lately, I discovered 'Brilliant Lettings', where for a flat fee of £29 per month, my property will appear on all the main lettings portals including rightmove and findaproperty.....so I tried it and let me flat in less than 2 days! It is cheaper than putting an ad in the local papers which is how I used to advertise. With services like this, why would any landlord use an agent? 11

Mark Sesum2011-09-05 01:51:39 I am a contractor, an electrician by trade, but with 30 years experience in most trades due to continuous training. I am Gassafe and NICEIC registered. I do work for many landlords and agents and it makes me laugh to hear them talk about legislation, they wouldn't know it if it fell out of thier arse. Fortunately for them, most tenants don't either which is the only thing saving thier backsides at times. In 30 years out of the hundred of landlords I've met I can only think of 4 that were likeable, honest and didn't mess me about, either with money or in some other way. In that same time I can't think of one agent. Not one. So many let properties are in appalling condition yet most landlords consider a lick of paint and a new cheap carpet as sufficient. This year, 2 tenants of landlords I work for have had serious electric shocks. One had to have her heart re-started. Both these properties, I had carried out testing on and recommended re-wiring yet I'm still waiting on payment for the original reports! (one landlord said he didn't owe me for 6 hours work as all he wanted was an 'electrical safety certificate'. Such an item doesn't exist, and if it did I couldn't provide one as the installation wasn't safe!) With the housing shortage getting worse and a boom expected in private lettings, I hope the government find time to properly regulate this joke of an industry. 12