Letting Agent Fees and Services

Property investment is a popular way to make some extra money. In fact, there are nearly 2.7 million landlords currently in the UK. Are you considering becoming a landlord and letting properties for passive income and flexible hours? Before you do, it’s important to consider all the work and responsibility that comes along with it. 

From maintaining your rental property to performing repairs, inventory checks, and first finding and referencing a tenant, the process can be quite time-consuming. That’s where a letting agent comes into play. Letting agents offer different services and charge a range of fees to help you balance the weight and responsibility of being a landlord. But is paying letting agent fees worth it or will it cut too much into your profits?

Let’s take a look!

Letting Agent Services

Let’s start with the services letting agents offer. From full management to individual services, you can pick and choose how involved the letting agent is based on your needs and budget. 

Full Management

Full management letting agent services are the most comprehensive. This is the ideal choice for landlords who want little to no responsibility for their rental property. Landlords not only find and reference tenants but draft all necessary paperwork, perform inventory checks, repairs, and maintenance, and handle any legal disputes that may arise. If you want these types of services, plan to pay the highest letting agent fees.

Finding and Referencing Tenants

This is one of the biggest complaints of landlords -- trying to find and reference reliable tenants. Many landlords have no problem playing letting agent fees for this service. Not only do agents have access to a large pool of potential renters and advertising methods, but they have experience with performing background checks. Letting agents also handle all inquiries, questions, and showings. 

Rent Collection and Guaranteed Rent

The only thing worse than an unreliable tenant is one who doesn’t pay their rent. That’s where rent collection and guaranteed rent comes into play. A letting agent will pursue any late payments, preserving your positive relationship with your tenant. Guaranteed rent means the letting agent pays you the monthly rent regardless of whether or not the tenant pays. In these situations, the agent often has its own agreement with the renters and acts as a middle-man.

Maintenance and Repairs

No one wants to get a call in the middle of the night that the heat or electricity on their rental property isn’t working. As the landlord, it’s your job to make these repairs immediately. Why not pay a letting agent to do this for you? Landlords are responsible for maintaining a safe environment at all times. This can be time-consuming and stressful. Most landlords consider letting agent fees for repairs and maintenance well worth it. 

Inspections and Certifications

Speaking of a safe property, landlords are also required, by the law, to perform certain inspections and provide certifications to the tenant. These include inspections on the plumbing, heating, gas, electric, smoke, CO2, heating, structural security, damp and leaks. Letting agents perform these checks and obtain all the necessary paperwork.

Legal Services 

Most landlords are legal experts. Unfortunately, tenancy agreements involve a lot of paperwork. Letting agents are well-versed in drafting all legal documents. They also have templates they use which saves both time and money. You can also rest easy knowing that in the event of an eviction or other legal dispute, that the letting agent will handle your case.

Letting Agent Fees

So you’re convinced that hiring a letting agent will make your life as a landlord easier, but at what cost? Some letting agent fees are included in your tenancy agreement while others are add-ons. It’s important to read all the fine print and ask plenty of questions so you know what you’re getting for your money. Let’s take a look at common letting agent fees based on the services they offer.

Full Management

If you want little to nothing to do with renting out your property, you want full management services. Because the letting agent handles almost every aspect of the rental process, you’ll pay between 12-18% of the monthly rent for these services. Other letting agent fees are flat rates of between £80 – £200. These letting agent fees cover everything from referencing tenants and guaranteed rent to property management, maintenance, and legal fees.

Other Letting Agent Fees

If you’re okay with handling some of the landlord responsibilities, you may want to pay for individual landlord services. Here are some of the most popular services and the letting agent fees you can expect to pay. 

Tenancy Renewal Fees

Drafting the tenancy agreement is one of the most basic letting agent services. At the end of the agreement, if you and the tenant choose to renew, a letting agent will draft the necessary paperwork. This can cost you between £45 - £120.

Guaranteed Rent

Guaranteed rent is worth its weight in gold for most landlords. Knowing you’ll get paid each month, on time, is priceless. In reality, it’ll cost you between £80 and £200 per year in letting agent fees.

There are countless other letting agent fees that landlords might face, depending on the type of agreement you sign. These include, but aren’t limited to:

• Inventory fees

• Late payment

• Eviction fees

• Necessity bill fees

• Maintenance fees

• Early exit fees

Being a landlord isn’t as easy as some people think. If you want to break into the property investment world but need a little help, paying letting agent fees is well worth it. Letting agents know the ins and outs of managing a successful rental property and can help offer a stress-free rental experience and peace of mind.