Thursday 17 July 2014

Double check your management fees

I was intrigued by an advert from a local high street letting agent offering their first month's management free, only to read in the small print that 'other fees may apply'. “Your first months management is free”...only it's not, as they add on a set-up fee, tenancy agreement fee and deposit protection fee, which they see as standard practice.

Except it doesn't have to be standard practice and indeed it isn't for many letting agents, CRJ Lettings included.

I was quite shocked when the landlord of a Chichester city centre flat, let at £750 per month, told me recently that she had paid £1,656 to her agent for the first years management (and that was after a 'discount'). That's over 18% of the annual rent!

As a landlord myself, I started CRJ Lettings having spotted an opportunity when speaking to a neighbour who wanted to let their nearly new 3 bed house in Graylingwell Park for £1,200pcm. Their letting agent quoted £120 + VAT per month, plus £366 upfront (which my neighbours weren't even aware of until I pointed it out in their contract).

And for what? It was an immaculately presented, realistically priced property in a desirable area of Chichester that would attract affluent tenants: the kind who would pay the rent and look after the property. And being nearly new there should be minimal maintenance and if something did crop up it was still under warranty!....£144 per month for that!?!?

I believe transparency is the key - you can find a full list of my services and fees on the website. It amounts to this: a full management service for just £75 per month. No setup fees, no renewal fees and no hidden extras. £900 per year to let and manage your property. That's it.

Contrary to popular belief, good letting agents do actually work quite hard: marketing the property, finding and referencing appropriate tenants and co-ordinating their successful move in. But then, in the majority of cases, the rent comes in on time, the nice tenants you moved in look after the property and other than the odd bit of maintenance there can be little to do until the tenants wish to move out.

In my experience it takes around 30 hours to setup and manage a tenancy in the first year. That's £30 per hour based on my £900 a year fee: pretty good! But the real secret of letting agents is what happens in year two and beyond, when those same nice tenants stay in the same nice property you took on and the 30 hours a year input drops to around 10 hours; effectively tripling my hourly rate!

And that's my business model. As transparent as that. Cherry pick the nice properties (there's lots of these around Chichester), choose good tenants (lots of them around Chichester too), keep my overheads low and my service levels high. And it still leaves me time to scour the market for my own property projects too.


If you are looking for an agent that is well-establishedprofessional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on or call 01243 624 599.

Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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