Using a management company for apartment letting.

Dinarius

Registered User
Messages
506
Our brilliant tenants of over seven years are leaving end of February.

In that time, I've reached an age where I am seriously considering paying someone else to do the work of managing the letting of our one-bed apartment, in the form of a lettings and management company.

What are the pros and cons that I might consider?

How much should I expect to pay for the service? I understand that there is a fee for letting a property and then a percentage of the monthly rent on top of that, plus VAT. Is this always the case? Are they negotiable?

Any advice appreciated.

Many thanks.

D.
 
How much should I expect to pay for the service? I understand that there is a fee for letting a property and then a percentage of the monthly rent on top of that, plus VAT. Is this always the case? Are they negotiable?
For management something like 5% plus VAT at 23% is a good benchmark. It depends a lot on the type of property and rent though. For an agent there is not much difference in the work between a €1,000 and a €2,000 property. If you are a top-rate taxpayer the cost is effectively halved.


What are the pros and cons that I might consider?
The main pros are that they have ongoing relationships with retailers and tradesmen who will take their calls as they get repeat business. Cons are that agents are probably less picky than you will be yourself at the start. They just want a quick letting and if things really go south the landlord has to step in anyway.
 
For management something like 5% plus VAT at 23% is a good benchmark. It depends a lot on the type of property and rent though. For an agent there is not much difference in the work between a €1,000 and a €2,000 property. If you are a top-rate taxpayer the cost is effectively halved.


The main pros are that they have ongoing relationships with retailers and tradesmen who will take their calls as they get repeat business. Cons are that agents are probably less picky than you will be yourself at the start. They just want a quick letting and if things really go south the landlord has to step in anyway.
When you say 5% is typical; is that sum a gross fee including both letting fee and monthly management fee?
Given that we let our property for well below market value for about 5 of the 7 years they were there, 5% of full-market value would still leave us quids-in without the hassle of day-to-day management.

Regarding your second point; is it possible to let first and then hand over the management? Would this save on the letting fee?

Thanks for your replies.

D.
 
You should ask the leaving tenants if they know any friends who want to rent the place? Remember also, you've been very very lucky with having had brilliant tenants for 7 yrs. Good luck with the next ones, you'll find things have changed for people renting.
 
is it possible to let first and then hand over the management?
Sorry I should have made it clearer.

The estate agent will quote for letting and for management separately. You can negotiate a bit on both but if you have a long tenancy you'll save more from a lower % on the management fee than the letting fee.

In general they won't take on management that they haven't also done the letting for as it's the sign of a bad landlord-tenant relationship.
 
Thanks both.

I will definitely check this out. No doubt there are good and not so good management companies too.

As to how things have changed for people renting; yes, I was vaguely aware of things changing, but with a 7 year tenancy, I didn't have to think too much about it.

D.
 
Back
Top