“Beware of the deal that seems too good to be true”dluckz
Which lettings agent should you use in Borehamwood?
As a Borehamwood resident I noticed a huge increase in the number of letting agents in the high street.
With over 4 new agents opening between 2015 and 2019 (an increase of 40%).
You might think.
More jobs, less empty shops and more importantly, more choice to ensure you get a bargain of a letting fee.
Yes, you are correct, however there are way too many agents to choose from.
By being naive or just cheap with your choice in the lettings agent you use. It could cost you a fortune in lost revenue over the years.
Even worse, it could leave you legally open due to a lack of due-diligence.
Each of the vast amounts of letting agents is offering a range of varied services and some are quoting rental figures either too high or too low.
Some at worst are 40% above or below the market value of the property.
As someone that has worked in the property industry for most of their adult life, I can honestly say that there is a huge lack of knowledge in the local market.
And this really concerns me.
Innocent landlords could be misguided to lose thousands of pounds in potential rental revenue.
Here are a couple of things a short sighted lettings agent could have in stock for you:
- The agent wanted to win the instruction by over valuing your property
- The agent is not a local expert and is unknowingly over valuing or under valuing properties
Even if the agent undervalues the property by only £30 per month.
This quickly equates to £360 in lost rent over a 12 month period and adds up substantially if left to roll over in future years.
Now imagine renewing the tenancy agreement after your initial year.
But your property is with an agent that is unsure of how to accurately value a rental property in Borehamwood.
This can and does lead to landlords losing income of £500-£2,500 per year!
With these sort of rent losses each year.
Looking at instructing a more expensive & more commercially minded lettings agent is actually cheaper.
So, what are the letting fee’s in Borehamwood?
Some agents offer 5% and others charge 8%.
What’s the difference?
The difference may be experience, it could be that they can find you a good tenant quicker, or if may be that they are charging for a fully due-diligent service in which your property is a cash cow!
Most of the time, the better agent will charge more, however they will be able to justify their fee’s in the long run by offering a good service and manage your property as a business.
Example of a cheap letting’s agent:
I have a friend who let their property via an agent in Elstree High Street.
This agents name will remain a secret!
The agent’s fee seemed like great value compared to other local agents in Borehamwood.
However midway through the first year, the letting’s agent contacted my friend with regards to some urgent work that was required at his property.
Cutting the story short.
The letting’s agent had some emergency plumbing work done and quoted £280 for materials & labour.
My friend didn’t dispute this as there was apparently a large leak and it needed a plumber there asap.
With my friend being abroad at the time, he didn’t question the works and said to go ahead and deduct the cost from the rent the agent collects from the tenant.
Here comes the mistake from the agent.
Stupidly, the letting’s agent accidentally sent my friend the invoice which they had received from the plumber.
Obviously this was their copy!
My friend was surprised to see that the plumbers fee was only £75 and there was no VAT payable.
After seeing this he decided to contact the plumber directly to ask what the issue was at his property.
It turns out the issue related to a blocked sink and it needed plunging.
No major leak in sight!
After speaking with the plumber at length to check he was not mistaking the property for another.
He then made contact with the lettings agent to dispute this cost and let the agent explain the works to him.
The agent didn’t realise at this point that they accidentally forwarded the plumbers invoice to my friend!
After a few minutes of making up damages, my friend confronted the agent.
The lettings agent back tracked and explained there is an arrangement fee for booking in the plumber after realising he was caught out.
My friend disputed this cost fully and agreed to a lowered arrangement cost of £25 plus VAT for the agent. He also asked the agent to explain why he was charged for a leak and received an awful response.
I’m personally quite shocked, as the letting’s agent was managing the property and it is my understanding that arranging minor works is covered in their monthly management charges.
A case of an agent undercharging a landlord and making up their fee with massive hidden costs!
Something that should be illegal, however it is not. With no punishment for the agent!
They attempted to charge my friend an arrangement fee of £205 plus VAT for making a phone call to a plumber!!!!
This is what landlords fail to realise when using a cheap agent.
The agent can only stay operating as they are making up their fee’s with hidden costs!
Here is another case of what you could say is negligence towards paying clients.
I have witnessed a lettings agent in Borehamwood list a property for £500 per month below market value.
Now on the other side of the coin, a lettings agent who over values a property can set a landlord back with a huge void period.
This will 9 times out of 10 create a void period and set you back 3-5 months in mortgage payments & service charges.
You can do the maths!
There are lots of letting agents to choose from in Borehamwood and some are very good.
Just make sure you do some research into which one you use and question how the cheaper options can operate when their fee seems to be too good compared to others.