I would always recommend that new investors and landlords use a letting agent to help manage there buy-to-let property.
I say this for a couple of reasons. Firstly, the services of a letting agent can help to reassure new landlords that they are meeting all the legal requirements before marketing, or handing over the keys, to their new tenants. And secondly, they can save the landlord time by doing the administrative tasks for them. This can be a huge relief to new landlords who are in full time employment.
Costs of high street letting agents for landlords can be quite high though. And with the introduction of the Tenant Fees Act which came into force on 1 June 2019, the costs too landlords are climbing.
My Recommended Low Cost Letting Agent Service
OpenRent has won my recommendation. I was blown away by their low cost and simple to use online platform and they literally saved me thousands of pounds. That’s right, thousands! They are also the largest letting agent in the country with more than 440,000 properties let since 2012.
In fact, using the term ‘low cost’ is misrepresenting them, because they actually provide a free (no cost) service.
If you know what is required of you to operate as a landlord, you can actually market your rental property for free by using their ‘Light Advertising’ package. Your buy-to-let can be advertised on OpenRent for 3 months and you will also be able to make use of their online Viewing and Enquiry Organiser.
Their ‘Ultimate Advertising’ package will give your rental property 3 months exposure on OpenRent, RightMove, Zoopla, GumTree and more, for the one off cost of £29.00 including VAT!
My favourite and recommended service is their ’Rent Now’ package. For a one off cost of £49.00 including VAT, OpenRent will market your rental property on all the popular property portals as described above, and they will also provide an Assured Shorthand Tenancy agreement including digital signing, deposit registration and the initial rent collection for the first month.
You may want to read that last paragraph again! I can assure you there are no typos.
To put things into perspective, my previous high street letting agent quoted me the princely sum of £1,200.00 including VAT for a similar service. You can read the letter they sent to me with their revised fees here. The property is a student let with four tenants, so it would have been priced as an HMO Tenancy as described on page 2 of the letter.
The only difference between the two services is that the high street letting agent would have conducted references on all four tenants. However, OpenRent also provide this service as an optional extra for the cost of £20.00 per person. To let a property through OpenRent, with the cost of four references, the total would be £129.00 compared to £1,200.00 with the high street agent. A saving of £1,017!
That’s not all! The high street letting agent quoted a monthly fee of 7% + VAT for their rent collection service. That equated too £176.40 per month for my student property. OpenRent charge a flat £10.00 fee per month for the same service.
Lets compare my total expenses for the year:
|Set Up Fee||£1,200.00||£49.00|
OpenRent has literally saved my thousands of pounds! £3,147.80 to be exact. N.B. I didn’t opt for tenant referencing as the student tenants are too young to have healthy credit files. I did, however, insist that they each nominate a guarantor through OpenRent which didn’t incur any additional fees.
Now, to be clear, I will also incur the cost of having my Gas Safe Certificate renewed during the year. The high street agent would have organised this for me and then deducted the cost from my rental income. With OpenRent, I need to arrange this myself, however, the website has a very useful feature which reminds me when my certificate is due, and will also recommend reputable trades to provide the certificate.
It will only take me a few minutes to arrange to have a Gas Safe Certificate issued, and the quotes I have seen on OpenRent have been cheaper than what I have previously been charged through the high street agent. Part of this is because the agent will charge an admin fee for their time on top of the certificate costs.
The use of online letting agents won’t suit everyone for a number of reasons. So lets take a quick look at the pros and cons of using an online letting agent.
Advantages Of An Online Letting Agent
- Cost – As online letting agents don’t require a shop front on a busy high street, they are able to pass their savings onto their customers and are far cheaper than the traditional letting agents.
- Convenience – Documents are accessible online at anytime of the day or night for both the tenants and landlords convenience.
- Communication – Online letting agents provide a robust communication system that remains in perpetuity for future reference. This can be much better than communicating over the phone where conversations can be forgotten.
- Control – Landlords can be in full control of their rental property without having to rely on a 3rd party. Options are also available for 3rd party support, should the need arise.
Disadvantages Of An Online Letting Agent
- Can be daunting to some first time landlords if they have concerns about their new business venture. Using a traditional high street letting agent can help to reassure you and take over a lot of the burden.
- It takes time to take photos and create the listing to market the property. A thorough description which includes the key selling points of the property is essential.
- Landlords will need to arrange and conduct viewings themselves. Although there is an alternative, which I will mention next, for people who don’t have the time or who often feel awkward when they meet people for the first time.
Alternative ‘Viewings’ Option When Using An Online Letting Agent
If you are wanting to use an online letting agent, but are unable to conduct viewings of your buy-to-let property yourself, there are companies that are starting to appear to facilitate this need. One website I have heard good things about, so I am happy to recommend, is viewber.co.uk.
They provide a national service through local people who will know the area well, and for a small fee you can book their services online. You can arrange to have someone with experience in the property market, showcase your rental property to prospective tenants 7 days a week, day or night including weekends.
Viewber is an easy service to use and they provide instant feedback after the viewing, directly to you inbox.