Tenancy fees from 1st June 2022 to 31st May 2023
Hannons Estate Agents and Lettings gives 7 Reasons for using a fully managed service for renting your nest egg to Tenants.
With full management, your letting agent will handle everything for you. That means putting your property in front of a plethora of potential tenants, finding the right renter for you, handling the rent collection, keeping you and your investment safe from changes in regulations, and so much more.
Full management gives landlords peace of mind, and as the buy-to-let market has changed so much in recent years, this is often something you simply cannot put a price on. There are, however, a few practical reasons why it makes sense as well, and that’s what we’re going to take a look at now.
Reason #1: Compliancy made simple
We’ve already touched upon the changes made over the last few years to many of the legal aspects associated with being a landlord, but it’s so vital we’ve made it our number one reason too. The legal responsibility that you have as a landlord is vastly different today than it was a few years back, and you better make sure you know your stuff if you want to avoid crippling fines that could turn your buy-to-let dream into a nightmare.
The worst thing about legislation is that it is constantly changing. Keeping up to date with all of the in and outs can be challenging to say the least, so having a group of experts by your side is invaluable in today’s ever-evolving environment. A good letting agent will stay abreast of any changes that may affect your property investment and lay out your options in a way that is easy to understand.
This removes the need for you to be constantly checking for legislative changes, and it also takes away the headache of working out whether or not they actually apply to you and your buy-to-let business. Taking the legal aspect out of the equation is one of the key reasons for opting for full management. Both national governments and local authorities are clamping down on landlords at present, so being compliant is essential if you want to remain in business.
If you’re comfortable with handling your own legal affairs, fine. If you’re not, however, having experts in your corner who know their stuff makes a whole lot of sense.
Reason #2: Finding tenants isn’t as easy as it once was
Another thing that has changed drastically is the tenants themselves. While there’s still competition for good quality accommodation in many areas, tenants are no longer willing to accept substandard property or poor service from their landlords, and rightly so. Rental costs take up a large chunk of people’s salaries these days, so why should they put up with anything less than what they deserve?
Then there’s the fact that many people are finding buying property increasingly difficult, and this is having a knock-on effect in the rental market. Tenancies are becoming longer, with many lasting for four years or more nowadays. This means that tenants are more invested in their decision to take on a property, so being professional is essential if you want to attract the best renters.
Providing you choose a reputable letting agent, full management means you’ll be represented by a well-known name that tenants can easily put their trust in. This can make a huge difference when it comes to finding the right tenant to fill your property and it’ll also mean you’ll have experienced valuers and negotiators working to get you the best price for your rental as well. A clear win win.
Reason #3: Full management prevents landlords from being taken for a ride
Many landlords, especially those who have a single property or are new to the private rental sector, are simply unaware of the line between their responsibilities and those of their tenants. Contrary to the nasty landlord meme that is often bandied about, the vast majority of landlords are extremely conscientious...almost to a fault.
This can lead to landlords being taken advantage of by demanding tenants. As a general rule of thumb, a tenant must treat a property as if it is their own, which includes them taking on the same jobs around the property that they would if they were the owner. So, things such as changing light bulbs and minor repairs are down to the tenant, whereas major works like a leaking roof, for example, are for the landlord to sort out.
Therefore, the day-to-day running of the property is your tenants responsibility, not yours, but if you don’t know that or are unable to articulate it to your tenant, your rental relationship can quickly deteriorate. It’s not uncommon for us to be approached by landlords who have self-managed their investments but have found the task has made their life a misery.
Now, this isn’t to say that the tenants are in the wrong; often they simply don’t know where they stand, just as the landlord may be unaware of rules. Employing a letting agent removes any grey areas and puts a professional in front of your tenant, which is often enough to get things back on track.
Reason #4: It’s a business expense
It could be argued that full management is an investment rather than a cost anyway, but even if you do take the opinion that it’s an expense, it’s one that you can put down to your business. The fees that you’ll incur from opting for a full management service are tax deductible, so you can lob a hefty 20% to 40% off of your fee depending on which tax bracket you fall into.
Not only that, opting for full management will likely save you money in other areas too, especially legal fees, so it’s important to see the bigger picture over the amount you pay your property management company or letting agent.
Reason #5: Less stress
Being a landlord is one of those jobs you have to do to know exactly how stressful it can be. Many who haven’t handled property before will often shrug their shoulders and mutter, ‘How hard can it be?’, but the reality is that it can be a tough business, especially if you’re not suited to it.
Collecting rent, dealing with repairs, appeasing unhappy tenants...the list goes on, and all of these things need you to be a certain type of person if you are to pull it off and take things in your stride. For many landlords, stress can something that ruins what would otherwise be a sweet deal.
Taking on a full management service removes all that aggravation from your life. No more fretting about missed payments from that awkward tenant or worrying whether or not you’ve covered every eventuality legally. In short, a good agent will have your back.
Reason #6: Professionally conducted inspections
Quarterly inspections are essential if you want to ensure that your property is being kept in good order and your tenant is sticking to the tenancy agreement. The problem is, quarterly inspection are far from fun to conduct.
Spotting signs of subletting can be difficult to the untrained eye and not everyone will be comfortable with having awkward conversations over who’s responsible for what when it comes to the maintenance issues mentioned in Reason #3.
Taking on a fully managed service removes all of these hassles and keeps your property investment safe.
Reason #7: You’re buying the unbuyable
It’s our most valuable commodity, and yet so many of us fritter it away without so much as a thought. What are we talking about? Time, of course. Being a landlord can be an extremely time-consuming business, which clearly doesn’t suit everyone.
Consider the amount of man hours required to keep a property investment in good shape. Do you really have the time to perform all of the tasks required of you as a landlord? What about when you want to go on holiday? What happens then if your boiler decides to give up the ghost? Do you really want to spend your downtime finding a heating engineer?
Many people get into the buy-to-let business purely from an investment standpoint and while they’re willing to put their cash into property, their time is something they’d rather keep for themselves.
Full management allows you to do just that. Your letting agent will handle all of the marketing, the paperwork, the phone calls, the collections, the repairs, and the maintenance...all of which will buy you time. Now that’s an investment!
Got a property or portfolio you’d like managed in Leicester and Rutland or any of their surrounding areas? We’re here to help! Simply get in touch with our dedicated lettings team to find out more about how we can help you become more hands-off with your investment. To help you we have attached our price list below:
Standard management service
£500.00 no vat to pay
10% full management
Advertising & accompanied property viewings
Referencing Drawing up of assured shorthold tenancy (AST) agreement
Tenant selection, introduction & referencing
Deposit lodged and protected with our preferred and approved scheme (subject to deposit lodgement fee)
Notify utilities at beginning and end of tenancy
Validation of maintenance requests prior to issuing contractors.
Arrangement of cleaning services (Polite notice the landlord is still responsabile for clearing the invoice)
Arranging free estimates for work from our fully vetted and qualified contractor network (or yours prior to any works we will need all the legal documents)
Arranging routine repairs and maintenance under agreed
Monthly rent collection and payment to you
Rent chasing/credit control via our rent arrears process
Preparing rental statements for your accountant on an excel spread sheet
Invoice payment to suppliers/contractors locally and assistance in sourcing
Arrangement of gas safety certificates,
electrical safety and EPCs and EICR’S
Arrange check-out inspection
Quotes for Professional clean at end of tenancy
Negotiate renewal with tenant and ensure documentation signed (Does not include rent review)
Deposit negotiations between both parties and return of any monies due
End of tenancy process ie handing back the deposit etc
Outine inspection(s) and the subsequent booking and reporting of the findings to landlord paid your rent notices
Serve section 8 notices
Serve section 21 notices
Once all contracts have been signed and the landlord wishes to change the rental amount to be set lower and or higher then what has been agreed
If additional spot checks are requested by the landlord for every 3 months fee
Lost Tenancy Agreements
If Items need to be sent to the tenant there will be additional fee ie
smoke ALARAMS /Heaters
Once a tenant has been found and the landlord changes their mind on renting a fee of one months rent will be charged to cover reasonable business admin costs.
One month Rent will be chargeable
Prepare inventory and schedule of condition 2 bedrooms
Prepare inventory and schedule of condition 3 bedrooms
Prepare inventory and schedule of condition 4 bedrooms
Renewal of Terms of Business and AST
£25.00 Per Hour
Information for Tenants and Landlords as of the 1June 2019
The Bill is now an Act of Parliament and known as the Tenant Fees Act 2019. The Tenant Fees Act outlines the Government's approach to banning letting fees paid by tenants in the private rented sector and capping tenancy deposits. The ban on tenant fees comes into force on 1 June 2019.
Your Rent Payment
Can I ask a tenant to pay more rent in the
first few months to cover the cost of banned fees?
Under the ban, you cannot require a tenant to enter into an agreement that ‘front loads’ the rent at the start of a tenancy
i.e. by charging more for the first month(s) of the tenancy
The amount of rent charged should normally be equally split across the first year of the tenancy.
However, after the tenancy has begun, you can reduce or increase a tenant’s rent without breaching the Tenant Fees Act
if agreed with the tenant or under a rent review clause in the tenancy agreement (provided that the rent review clause
permits both a rent reduction or increase according to the circumstances).
Q. Can I increase the rent part way through the tenancy?
You can increase the rent if a tenant agrees to this or under a rent review clause in the tenancy agreement
(in the first year of the tenancy this is provided that the rent review clause would also have permitted a rent decrease)
. If the tenancy is an assured short hold periodic tenancy, you can also increase the rent annually by notice in accordance with section 13 of the Housing Act 1988.
(to reserve a property)
capped at no more than one week’s rent
Q. What is a holding deposit?
A landlord or agent can take a holding deposit from a tenant to reserve a property
whilst reference checks and preparation for a tenancy agreement are undertaken.
You cannot ask a tenant
For more than one week’s rent as a holding deposit
(this cap is based on the total agreed rent for the property)
For example, if there are
three tenants who are jointly liable for the agreed total weekly rent of £240, you
cannot charge each tenant a £240 holding deposit. The maximum this group of
Tenants could be asked to pay as a holding deposit between them would be £240.
They may then choose to split this equally so that each person would pay £80.
You should stop advertising a property once a holding deposit has been paid.
Landlords and agents can only accept one holding deposit for one property at any
one time. You are not permitted to take multiple holding deposits for the same
property. The cap of one week’s rent on holding deposits is an upper limit and not a
Recommendation. You are not obliged to take a holding deposit and
should consider on a case by case basis whether it is appropriate to take a holding deposit
and the appropriate level of deposit to take.
Payments to Change the Tenancy
A charge of £50.00 to have the contract amended.
What do you mean by a change to a tenancy?
We are lawfully allowed to charge should a tenant want to amend a contract with the below
pets to be kept in the property
a change of sharer in a joint tenancy
permission to sub-let
a business to be run from the property
or any other amendment which alters the obligations of the agreement
Early Termination Fees
Q. Can I ask a tenant to pay a fee if they want to leave a
Tenancy before the end of their
fixed-term or the end of their notice period?
A landlord or agent can require a tenant to make payments in connection with the early termination of the tenancy where the tenant has requested this, but there are restrictions on what can be charged.
If your landlord agrees to a tenant leaving early, you will be
asked to pay rent as required under the tenancy agreement until a suitable replacement tenant is found. A tenant can be held liable for rent until their
fixed-term agreement has ended or in the case of a statutory periodic tenancy, they have given the notice required under their tenancy agreement. However, a landlord is not able to charge more than the rent they would have received before the end of the tenancy. If you agree to terminate a tenancy early, you should clearly set this out in writing. It is good practice for a landlord or agent to agree to a reasonable request to end the tenancy early. Where agreed to, landlords and agents should consider on a case-by-case basis whether it is appropriate to charge an early termination fee, for example, whether there are any exceptional circumstances which require the tenant to leave early.
Payments to change the tenancy.
where the tenants have requested to change the tenancy
We can charge a tenant reasonable costs
payments associated with early termination of the tenancy
Additional fees that may apply
Change of move in date: This charge is to cover the cost of changing paperwork if the move in date is re-arranged within 7 days of the set move in date
Copy documents: tenancy agreement- -This charge covers duplication of any document such as a lost tenancy agreement. Tenancy Agreement
Copy of Inventory color
If during the tenancy an appointment is made and confirmed with you for a maintenance visit, should the appointment be missed or the contractor denied access (unless you have authorized entry with pass key
If the rent is late or is part paid we will issue a letter with 24 hours and allow 7 days for you to pay.
If another letter needs to be sent after the 1st 7 days we will charge an additional fee
Lost Keys or replacement keys will be charged at
Re requiring any additional paperwork