Some landlords do require a managing agent. Maybe if they’re strapped for time, or if they live a long way from their rental property.
For many landlords, especially those who use OpenRent to set up tenancies and collect rent, using a traditional management service provided by a high-street letting agent is completely unnecessary.
After taking a closer look at some traditional tenancy management services we’re frankly shocked at how little they provide for the price! They often take up to 20% of your monthly rental amount, every month, for very little.
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What does a managing agent actually provide?
Traditional high street agents often pitch their management service as hassle-free. Instead of tenants calling you up when there’s an issue at the property, they call the agent. The agent then (theoretically) gets the issue resolved.
They’ll also help with things like:
- collecting the rent every month. This makes it easier for them to take their fee from it
- assisting with the setup of the tenancy
- helping close tenancies off.
Other than those three things (which OpenRent also offers, for a far lower price) it’s not clear what value a managing agent adds. They do often handle maintenance queries from tenants, but that is often where the catch is.
What’s the catch?
A rental property is, after all, an investment product. A landlord is providing a home for those that need it, but they’re also trying to make a profit. So can handing over up to 20% of your rental income to a managing agent be worth it?
The catch is that while employing a managing agent, you remain responsible for emergency, maintenance, and ongoing costs associated with your rental property.
You’d expect that for that 20%, some of the costs (for example, when a boiler breaks down) would be covered by some kind of insurance product, or the managing agent itself, but no. The landlord remains responsible for those costs, further reducing your profit margins.
To rub salt in the wound, a managing agent will arrange those repairs for you, but then send you a bill. You are very unlikely to be getting good value when paying for those repairs.
They’ll also typically be adding their own commission to each of these payments.
To cut a long story short, you can expect to be parting with significantly more of your rental amount than expected for a service that more often than not adds very little value. Here at OpenRent, we don’t think that’s fair, so we do things differently!
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