Landlords lose out if they don't look at the bigger picture
Posted by: katalysis
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When choosing a Letting Agent it’s tempting for Landlords to look at the prices quoted by Agents and go with the cheapest. However, this can have unexpected pitfalls. The fact is that a lot of Letting Agents have other streams of income that they can discretely use to bulk up the money they make out of Letting a Property. They can then use the subsidy effect to produce what on the face of it are attractively low fees. Two areas spring to mind. First Milk the Tenants! Charge all would-be Tenants high fees for submitting applications to rent a property and then hit the successful ones with a big bill for the legal documentation that goes along with the process. “Fine” you may say “it’s simply transferring the cost from the Landlord to the Tenant” but the fact is fees vary. Ranging from as little as £35 to an eye watering £75 per Tenant application and £50 to £150 for documentation. In fact from reasonable to rip-off. If you’re a Landlord and your Letting Agent gets a reputation for ripping off Tenants then this is not good for your business. With plenty of property on the market Tenants can vote with their feet. The other area concerns referral fees or “bungs” to you and me. In reality Milking the Landlord without them knowing about it! In a largely unregulated sector there’s nothing to stop the unscrupulous from, for example, agreeing to source some improvement work for a Landlord and then trousering a kick-back from the supplier without disclosing it. Good business for the agent not so good for the Landlord who is unwittingly paying more than they need to.