This post is aimed at landlords thinking of using a letting agent for managing their rental property. I’m writing this with 12 years experience of dealing with letting agents (in London) and speaking with landlords, I’ve also worked at property companies involved with property management. I will outline why I believe letting agents are a waste of money.
Flawed business model
The essence of any business model is to create and deliver value. Letting agents do the opposite; they overcharge for a service that deteriorates your property, annoys tenants and creates stress for you (the landlord).
Examples of incompetence
Here are a few examples (I could list many) of the incompetence I encountered while working with letting agents (mostly PurpleBricks and Winkworth letting agency). These examples aren’t unique to me; fundamentally, letting agents don’t care about your property.
After paying to have curtains hung in the bedrooms it wasn’t possible to open the windows due to the curtain poles being installed inside the bay windows!
The letting agent at the time (Winkworth) recommended an integrated washing machine replacement after the previous one had broken down. Not only did they buy a washing machine too big (it sticks out), they also threw away the fitted kitchen door that used to be on my *flush* washing machine! Instead of using ao.com, I was charged for installation and disposal of the old washing machine.
I’m sure PurpleBricks letting agency has the biggest database of cowboy builders out there. I had a replacement bathroom floor installed and on closer inspection the quality of workmanship was shocking; tiles cut unevenly, big gaps around the edges and sealant shovelled on with what looks like a spoon!
After a series of issues I had with PurpleBricks letting agency which included their Finance department being unaware of tenants not paying the rent, it became apparent they had also lost the keys to my property.
Overcharged
Letting agents aren’t cheap, I was paying 10% of my gross rental income for full property management. It’s bad enough that you’re paying for a terrible service but you also get ripped off with repair work. The quotes (from experience) are between 100-200% above what you should pay. Most letting agents work with suppliers that charge VAT, right off the bat your quote is 20% higher compared to a local handyman. Shown below is a quote from PurpleBricks letting agency for £1,020 for replacing lino in a small bathroom. The quote references removing the basin and toilet, which beggars belief! I had the same work done by Carpetright for £300 which included, materials, removing old floor, screeding and installation.
Summary
Letting agents are a waste of money from my experience. I’d challenge you to find a landlord that’s happy with the letting agent they use. With that being said, I’m sure there are some companies that do a good job, but it’s unlikely to be any of the big estate/letting agents. I used to think letting agents were a necessary evil but now realise self-management isn’t that difficult. My property has never looked so good since taking charge of it and tenants couldn’t be happier. My advice: don’t waste your money on letting agents.
Sorry to hear about your poor experience with letting agents.
My agents are good enough that I have recommended them to friends and family and no, they are not one of the big ones. I’ve used them for 8 years with no issues. They’re not perfect but I’m happy with them.
Totally hear where you’re coming from regarding the higher priced tradespeople, but as things have gotten fixed quickly, I can’t really complain.
Ref your integrated washing machine – I’m glad I chose the new model (which was the same size as the one being replaced) and ordered via ao.com!
I’m not sure I would ever want to manage my property myself.
I’m actually pleased my experience with Winkworth and PurpleBricks was so terrible, if either were semi-competent then I wouldn’t have thought about self-managing! I was apprehensive too but OpenRent makes it much easier with digital contracts, access to Rightmove, tenant referencing etc. I’ve since made a few tradespeople contacts via MyBuilder which makes the process a lot easier too. Based on the cost savings it was a no-brainer for me, the reduced stress is a bonus! 🙂