For many landlords using OpenRent, especially those who live close to their property, using a traditional management service provided by a high-street letting agent is completely unnecessary.
But some landlords do require a full management service – if they’re strapped for time, or if they live a long way from their rental property.
We’ve taken a deeper look at those traditional high street tenancy management services – and we’re frankly shocked at how little they provide for the price – often up to 20% of your monthly rental amount, every month.
What do they 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, and the agent (theoretically) gets the issue resolved.
They’ll also help with things like collecting the rent every month (so they can take their fee from it), assisting with the setup of the tenancy, and – to a varying extent – helping close tenancies off.
Past those three things (which OpenRent also offers, for a far lower price) it’s not clear what further value a managing agent adds, other than the handling of maintenance queries from tenants, which is 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 turning 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 (often expensive) costs, further haemorrhaging your profits.
To rub salt in the wound, a managing agent will be arranging those repairs themselves, and then billing you – meaning you are very likely not going 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 adds little value. Here at OpenRent, we don’t think that’s fair!