If you wake up in the mornings finding yourself in midst of the war-torn surroundings of the lettings industry, life has probably thrown you a bunch of lemons and things probably haven’t turned out like you had once planned.
If it’s any consolation, believe it or not, it was never a childhood dream of mine to be strapped to a desk and blogging for very little gratification. I know my life is a complete joke in comparison to my youthful aspirations. I should have known I was destined to be borderline average. But literally, no child dreams about being a letting agent, because that would be creepy and just plain weird. But here you are… so you’ve probably heard of the chaos surrounding Foxtons estate agents over the past week or so, while everyone else with respectful professions and life interests probably missed the excitement because they used the ‘property’ section of the newspaper as lining for their rabbit’s hutch, destined to be saturated in feces and urine.
So for those you out of the loop…
Foxtons, the London based Estate agent, who are allegedly famous for being relentless and “aggressive” assholes, have been flagged for charging an innocent and unsuspecting landlord £616 to change a light fitting in his BTL. It’s also worth noting that these are the same douchebags in trouble for “double charging” landlords and tenants £420 EACH for “drawing up a tenancy agreement.” Seriously, what in the God damn fuck?
Quick Quiz: what kind of domestic light fitting in a BTL costs £616?
I have no idea, but it sounds like someone laughed all the way to the bank and then took the rest of the day off and walked into a strip bar with a raging hard-on.
If I was at the receiving end of that invoice I probably would have broken down into a teary-eyed hysterical fit of laughter and pissed my pants. They would have had to extract me off the floor with a tow truck.
But the thing is, that price-tag alone for such a run-of-the-mill task shouldn’t generate any real significant shock-waves, because most of us are preprogrammed to believe “letting agents” is synonymous with “extortionate dip-shits” and “thieving bastards.”
We generally expect agents to be eye-watering expensive and total chancers, even though we know they’re not all like that. We just expect it either way, much like we do with mechanics, electricians, builders and every other shyster blue-collar tradesman that freely alters their prices based on what they think they can get away with.
It should be highlighted nonetheless, the price-tag in this particular case appears to be complete madness. However, the real issue of concern only becomes truly apparent when the total cost is dismantled and thrown under the microscope.
After a bit of investigating, the landlord, Dr Chris Townley, discovered that the work, which was carried out by a subcontractor, charged Foxtons £412.50 (+ VAT). OUCH!! Granted, that alone is a reason to curl into a ball and hope to never regain consciousness. But why did it total £616? Well, that’s the part that’s bloody ingenious.
Foxtons, who are reported to be worth a crazy 800 million pounds, deemed it appropriate to hammer on a 33 per cent commission fee on top of the subcontractor’s cost, which is what accounts for the additional £137.50!
Yes, that’s 33 fucking-per-cent commission, for what most likely consisted of making a phonecall to the contractor and relaying an address to visit. In-bloody-genious.
I’m not even sure if having the audacity to apply such heavy-handed levies for a task so fundamentally basic is so insane that it’s admirable or gut-wrenching. Either way, experiencing that level of high, which will allow my conscience to be that balls-out gutsy/psychotic sounds incredible. I WANT IN; I want to feel that rush! I wonder how Foxtons managed it. My fear is it involved frequent toilet breaks and illusive substances being snorted and injected into veins I can’t even reach.
In light of all this silliness, there’s now a legal battle in the works, which could allegedly cost Foxtons £42 million- that’s by the time they compensate everyone that’s also been screwed over by their exploitative cashcow. Sadly, £42m is probably a drop in the ocean for those cowboys, so it could just mean they’ll be forced to lower the grade of their toilet paper for 80% of their branches for a couple of months.
You can read the full report over at the Telegraph. But my advice is to stick around ‘ere. This is home. I’ll take care of you.
Most of my regulars’ will already know my blog is riddled with my gripes with letting agents, mostly regarding their bullshit fees and general slime-ball antics. But I don’t want to tar every grease-ball agent with the same brush, primarily because many read this blog and they always manage to restore my faith with their sound advice, good humour (i.e. they look beyond my crassness) and respectable code of conduct. That aside, I don’t actually dislike agents by nature, I know there’s those that genuinely work their asses off to provide a genuinely good service and do their utmost to shake off the stereotypes they’ve been lumbered with. I adore those agents. I just dislike bad ones, much like I dislike bad landlords, bad tenants, and women that don’t ‘give it up’ on the first date after I’ve shelled out on a delicious hot meal. I’ll respect everyone until they cross a certain line.
However, in the grand scheme of things, good agents are far and few between.
When an agent calls you with a repair/maintenance issue…
As much as I refuse to use letting agents to manage my properties, and try my best to encourage other reluctant landlords to manage their own properties when it makes practical sense, there’s still always going to be a need for a managed service, because often they make more sense.
So here are my top lousy tips for landlords that uses a letting agent to manage their maintenance, which mostly consists of common sense…
Understand what you’re paying for!
From my experience, using an agent’s sub-contractors doesn’t return the best value, only convenience. But let’s face it, that’s exactly what the managed service is all about. But that convenience specific to “managed maintenance” usually comes at an unjustifiable premium rate, which will probably give you an irregular heartbeat and an alarming shortness of breath.
You usually end up paying over the odds and the quality of work is quite often questionable. An agent’s interest doesn’t lie in finding you the best valued tradesman, their interest usually stretches as far as getting someone through the door to fix the problem and making commission.
Before giving the firm nod for any maintenance work, be a dithering cesspit of confusion; find out who they plan on sending to complete the work and how much it will cost, and then do your own research with due diligence. Don’t just blindly agree to repairs, otherwise you’re destined to be screwed over. Don’t accept “rough estimates” either. Rough estimates don’t mean shit, they have a tendency of spiralling out of control in the wrong direction.
Most respectable tradesman will provide free quotations. Get a confirmed price on paper, along with what you should expect in return. If applicable, enquire about the quality of materials they’ll be using, because more often than not they’ll just fill holes with absolute junk. That’s the problem with using just ‘anyone’ to do a job.
You’re not legally obligated to address all maintenance issues
A landlord has legal responsibilities to ensure certain aspects of the property is repaired and maintained, so that means there are some things that can be ignored, like a public elevator fart.
Section 11 of the Landlord and Tenant Act 1985 stipulates that the landlord must;
- keep the structure and exterior of the property in good repair, including drains, gutters and external pipes
- keep installations for the supply of water, gas, electricity and sanitation in good repair and proper working order
- keep installations for space heating and water heating in good repair and proper working order
Anything that falls out of the above brackets generally doesn’t need to be addressed, or at least there’s no legal obligation. So for example, if your agent requests for you to repaint the skirting boards because they’re looking murky and killing your tenants vibe, understand you don’t actually have to do it.
However, it’s important to recognise that I’m not telling you to ignore the request, because piffling little jobs like that are often worth doing just to maintain a good relationship with your tenants (who may actually be charming people). I’m merely saying you don’t need to comply with the request because there isn’t a legal choke-hold.
Don’t be a “YES MAN”
This can be really tricky to avoid, even I’m guilty of it some times.
When my mechanic tells me my spark-plugs needs changing and it’s going to set me back £300, I don’t have a clue 1) what purpose spark plugs actually have 2) if they actually do need changing 3) if I’m being given a good price.
On that basis, I’m compelled to say “yes, do it” simply because I’m out of my depth, all I know is that there’s something wrong with my car and it needs fixing.
Many confused landlords fall into the same trap, they just take their agent’s word because they’re the “industry professionals”
I always find taking a step back without making any rash decisions is the best policy. Talk to other people, whether it be other industry specialists, friends, family.. etc. Whoever. Just someone.
Try Googleing something. Anything! Throw some related keywords into Google for your specific problem.
Any Seinfeld fans up in ‘ere? If so, you’re cool as hell in my book. But also, this situation reminds me of a scene where Jerry Seinfeld has a disagreement with his regular and trusted mechanic (his name is Putty), so he goes to an ‘unknown’ mechanic for a quote. George’s response hits the nail on the head…
God damn, I love Seinfeld.
Don’t accept any quotes if they sound ridiculous
If the figures being thrown at you seem insanely expensive, then they most likely are.
Don’t be scared to reject or question your agent’s if their price doesn’t seem right. If you need to, take a hit of Vodka and grow a pair. Failing that, get someone deep-voiced and terrifying sounding to be your voice.
Remember, you don’t have to use your agent’s maintenance contractors just because you’re paying for a managed service. I always recommend getting independent quotes for comparison. You’ll often be able to find much better deals. Of course, that’s not always the case, because I know many agents work closely with local tradesman, and offer them regular work on the basis that they offer competitive and appealing rates for their landlords.
But fair warning, you may start questioning what use the ‘managed service’ is while you’re having to get your own quotes (which you should ALWAYS do). And if you don’t start asking the question, you’re probably an idiot.
Agents usually add a commission- find out how much!
Sadly, most (not all) agents add commission on top of all the sub-contracted maintenance work, but it’s usually not as steep as 33 per cent. That’s a complete joke. Utter madness.
I say “sadly” because adding a commission makes virtually zero sense to me, because arranging repairs should be part of the ‘managed service’- surely that’s what I’m paying through the nose for already.
If agents believe it’s acceptable to charge 10-15% of the rental income, plus the other ludicrous fees, for setting up a direct debit and taking one or two property inspections per year (which largely doesn’t even happen), then they’re beyond the help of conventional medicine. They most likely have a brain abscess the size of a tennis ball and need immediate specialist treatment.
On that note, it’s always a good idea to enquire about maintenance policies before opting for a managed service. Letting agents are notorious for finding shameless ways of making money for doing absolutely nothing- don’t fall victim to that scam. *Ahem* Tenancy Renewal Fees. £200 to photocopy a contract, that’s got to be the biggest scam on the planet of all time. Oddly, apparently photocopying costs more in London than other regions. Go figure.
If you’re given a maintenance quote, ask for a break down, and specifically ask if they’re charging a commission. I suspect many landlords don’t ask the question, but they should, because the commission fee is very real and dangerous.
Reasons why I don’t use a ‘managed service’
I don’t want to dislodge you from your stance on the matter if you’re happy with your managed service, because my advice and opinions are often total garbage and following them could lead to the demise of your fortune and good health. If you’re on your last legs, then MEH, I guess you don’t have much to lose, so you may as well roll the dice and test my theories on a whim! But if you have a working system, then stick to it. But in the mean time, here’s a list of my *personal* reasons for not using a managed letting service.
Just to clarify, my intent is not to be the root cause behind any anger induced seizures, particularly to you wonderful agents that offer a managed service. I come in peace.
I’ve been a landlord for several years
I’m not a new landlord and I generally know what to do and who I need to sleep with when shit hits the pan.
I’ve always encouraged new landlords to use a letting agent, because the stress that comes with feeling alone and worried in an unfamiliar environment is often more horrendous than paying an agent. What, really? Yes, really.
I used an agent to manage my property for the first 12 months. Granted, it was a terrible experience that has scarred me for life. My agent shafted me with a DSS tenant that fell into arrears almost immediately. At the time I had no idea what a DSS tenant was, I was just assured I was “guaranteed” rent, and I swallowed that up like a bucket of pre-cum. I was so excited.
God, what a sucker. They saw me coming a country mile away. Needless to say, landlords still have to pay management fees even if they’re supplied a dog-shit tenant by the agent. What a scam.
But despite my horrific experience, using a “good” agent for the initial phases really does help with the learning curve, and it allows for a gradual entrance into the industry. I’ve already written a more in depth blog post on new landlords using letting agents. Enjoy.
Let’s get the obvious out of the way.
A managed service is usually insanely expensive, especially if you have good tenants, in which case a managed service is a total waste of time and money.
The output required to manage wonderful tenants is pitiful. It’s definitely not worth 10-15% per cent of my rent. I’d begrudge paying that sort of money for a task achievable by a sedated monkey.
If you’re paying for a managed service when you have tenants that have been paying rent on time for a couple of years and have given you minimal problems, then congratulations, you are a donkey.
Often, if you calculate the amount you pay an agent over the course of a year and divide it by the amount of hours they actually spend on your property/tenant(s), you might just keel over and die.
I’d rather swindle my money away on something equally as pointless, but actually provides joy and/or a temporary erection.
Ironically, the only time I’d personally get value from a managed service is if I’ve locked horns with a tenant that literally makes me want to cut my ears off and violently vomit until I’m reduced to skin and bones. But why would I want to keep and ‘manage’ a tenant like that? I’d just legally end the tenancy and find someone I can stomach dealing with.
Personal relationships & quotes
I get quotes for pretty much everything, but particularly for anything of any reasonable value or importance.
I usually get quotes from people I’ve used in the past or recommendations, because then their craftsmanship can be vouched for. When you know you’re relying on someone competent it makes the whole process so much more beautiful.
When you’re dealing with sub-contractors affiliated with your agent, there’s usually no relationship, no credibility, and little proof of anything. Only the word of your agent…
Getting quotes and references is probably one of the best ways to save money as a landlord, and as said, agents generally don’t waste their time getting the best value. But aside from that, I like speaking directly with the people involved so I know exactly what’s happening. Knowledge is people. Or whatever.
No one is going to care about my profit margins more than me- not my mum, not my dad, and certainly not a grease-ball letting agent that’s sole purpose for existing is to make commission.
I know that 95% of the time I’ll be able to resolve problems cheaper than a letting agent while not compromising on quality.
All my properties are local
One of the most forgiving reasons for using a managed service is when the landlord isn’t local to their property. Fortunately, I live close to my investments. I’m literally a 15-20 minute drive away, from door to door.
If there’s a problem that requires my presence, I’ll be able to wizz around to the property quicker than any agent can in his souped up Mini.
The key is tenant referencing
I’ve said this so many times.
If I nail the referencing I’ll most likely have minimal problems from my tenants, which generally means dealing with them and maintenance issues won’t be a traumatising affair. That’s the theory anyways.
With that said, if agents are experts at finding good quality tenants with all their rigorous referencing protocols (which is often how they package themselves), why would we need to pay them to manage the property? If they find me good tenants, surely the management side of things will be a stroll in the park?
Communication takes longer
This can be frustrating.
Using an agent only adds another driveling buffoon into the chain of communication- so you end up talking through people and everything generally takes longer to get from one end to the other. Not to mention, when you deal with agents you never really know when they’re telling the truth, so you’re often left wondering, “yeah, but did the tenant really say that or are you just making shit up because you’re an asshole?”
The two most natural things in the world: procreation and a tenant reporting directly to the decision maker, the landlord. Why fight it?
I’m managing no matter what!
Paying an agent isn’t going to unshackle me from a management role, it only means I’ll be managing the agent instead of the tenant. All I’m really doing is throwing someone else into the equation to relay messages to me. What’s the point?
The real problem is, it’s extremely difficult to find agents that will put MY profits before their own. I’m not even sure they exist (but then again, why should they?). So the reality is, landlords don’t ever really escape from ‘managing’ altogether- that’s a vision from an aspiring landlord’s wet-dream. You’re always going to be either managing your tenant(s) or managing your letting agent while they manage your tenant(s). That’s the real choice you make when you’re choosing between a managed and non-managed service; so who do you actually want to manage?
Bearing in mind, if you don’t manage your agent, you’ll most likely piss your money down the drain, because leaving an agent to their own devices and allowing them to make all your decisions is giving them a licence to rob you blind.
At the end of the day, if there’s actually a real decision to be made or anything significant to worry about, the responsibility is always going to lead back to me, the landlord, and rightly so. The agent will ultimately contact me notifying me of the problem, and then await for my further instructions.
So what’s the actual difference between being notified of a problem by my tenant and my agent? There isn’t one. I’m going to get the horrendous call regardless.
I don’t mind the tenant/landlord relationship
I appreciate many landlords can’t think of anything worse than having to socialise with their cockroach tenants. Tenants can be annoying beyond belief, and often be the cause behind suicidal thoughts.
Personally, I really don’t mind talking directly to my tenants, and while I don’t have any real proof, I feel like tenants are a bit more hesitant to relocate when they know they have a good landlord- because we’re rare as shit.
I know it’s not glaringly obvious from the horrendous shit I write on this blog, but I am a social butterfly; I like being around people and helping them if I can, especially if they’re rich, beautiful and easy.
Whenever a tenant reports a problem, no matter how small or stupid (it’s usually the latter), I’m on it like flies on shit.
I don’t allow problems to linger or fester, because that’s how bad relationships form and how manageable problems escalate into chaotic disaster (maintenance issues generally get more expensive to repair the longer you leave them).
I’m a pro-active person by nature, probably because I’m impatient as hell, so I don’t like things being left unattended. In order to be a good self-efficient landlord, you actually need to be pro-active. So if you’re a lazy, steaming piece of turd, you’re better off sprawled across your sofa, chewing on your greasy kebab, while you’re getting swallowed alive by management fees.
That about covers it. For now.
So, landlords, have you ever been charged or quoted a figure by an agent that made you want to top yourself or laugh yourself into a comma? If so, share your story. I’d also be curious if you’re an agent, and if you add a commission to maintenance work, and if so, how much cheese we talking ‘ere? I won’t judge.
Once again, I invite you into the circle of trust…
I love you all! xo