Morning,
Our property will soon be available to rent after the current tenant has given notice.
The estate agent has offered final management offer:
- 7% for the 1st year
- 4% for the 2nd year
- 3% thereafter
This includes:
- Advertising (photos/floor plan)
- Vetting tenants
- Conducting viewings
Not included:
- Inventory + Check-In
- Tenancy Set-Up/Admin Fee
I handle all maintenance and tenant communication directly, however the property is in England and I live in Northern Ireland.
Considering OpenRent instead. My understanding of the process:
- Use RentNow for photos, floor plan, and ad creation
- I receive, process filter enquiries (e.g., no DSS or pets)
- Vet interested tenants (contact employers, previous landlords)
- Organise an accompanied viewing
- Arrange inventory + check-in
- Sign tenancy agreement
Questions:
- Photography/Ad Creation:
How long does OpenRent typically take to produce photos and a floor plan? Could this delay finding a new tenant?
- Tenant Vetting:
How time-consuming is this process via OpenRent? Is this where estate agents truly add value ā pre-screening before I vet further. With OpenRent, I feel that I could be inundated with applicants. Once I have filtered those of interest, how strong is the reference checks provided by OpenRent? Do they provide enough information to cross check those references by contacting the employers/form landlords?
- Communication Overhead:
Is there a lot of back-and-forth between myself, tenants, OpenRent, viewing agents (accompanied viewing), and inventory clerks?
- Professionalism of Viewings:
Are accompanied viewings done by professionals, or more of a gig-economy setup?
- Remote Management Gaps:
Am I overlooking any critical aspects of managing a rental remotely via OpenRent?
Fee Comparison (based on current market rate):
- Year 1: Ā£1,300
- Year 2: Ā£830
- Year 3+: Ā£600
Total over 3 years = Ā£2,730
Thatās a significant saving ā but is the service from the estate agent worth the cost, especially considering I canāt handle viewings in person?
Let me know your thoughts ā any insight or experience would be appreciated.
Tenant vetting is time consuming, personally i wouldnāt be willing to rent to someone i havent met in person.
A bigger issue is the ongoing maintenance, you say you will deal with it from a different country, while it may work if you are lucky enough to have a good tenant who is helpful in providing access for tradespeople etc, there no guarantees they will and you have a lot of maintenance responsibilities which may require your frequent and in person involvement.
I would have thought you should be looking at full management via agent, sums may not add up and so dependent on circumstances may be better to sell.
Thanks @Richard19
Yeah, weāve rented the property for around 9 years now, two different tenants. They were sound which isnāt guaranteed.
Interestingly, I would have thought most tenants would accept a trades person to visit to report a problem they have. In my case, we have had a leaking pipe that needed an out of hours call and a shower that needed replacing. Both times the tenants were happy with my response to getting a professional to resolve the problem.
Largely depends on tenants working arrangements, tenants able to work from home are much more likely to be accomodating, tenants who have to go out to work generally arenāt willing to take time off work to deal with something which is landlord responsibility. Rent reviews also a factor as more likely to help if feel they are getting a good deal.
Thanks again @Richard19, I see where you are coming from now. Historically, thereās usually a communication factor between the tenant, myself and any trades person to arrange a time and place.
Rent reviews also a factor as more likely to help if feel they are getting a good deal
Sorry, what do you mean by rent reviews?
Will you pay Ā£2,730 or more in tax over those three years? If so, itās not money saved, itās simply money you give to the government rather than an allowable expense you spend on letting.
Hi @tatemono ,
The amount is calculated is a net amount (Income minus fees/tax).
Included OpenRent rent guarantee (Ā£249 per annum) and rent collection (Ā£120 per annum) against against the percentage of the income charged by the estate agent leads to the amount quoted.
Iām not sure if the OpenRent rent guarantee is worth it, as itās insurance, so Iād need to read the terms and conditions.
As a side note, do you feel that itās better to rent at slightly below the market value to get a better selection of renters to choose from, or am I only inviting more tenants that may not be able to afford the rent?
I donāt understand that.
"Will you pay Ā£2,730 or more in tax over those three years? "
This is income minus deductions minus tax over 3 years. Therefore, Iāve already paid tax (via self assessment)
I donāt get these figures. They look like nothing Iām used to. Firstly, you have an estate agent offering you long term management fees of 3% which is a pittance. Typical fees are north of 10% plus VAT. At 3%, Iād bite their hand off and wouldnāt be bothered posting here.
Then you say (under a heading of āfee comparisonā) that you will make only Ā£2,730 profit on your rental over 3 years. Not only is that also negligible but you are somehow able to forecast all your allowable expenses over those three years. As an example, a new boiler will not only wipe out that income but probably also give you a loss to carry forward exempting you from tax on your property for that entire period.
Iām def missing something here so forgive me if I appear slow.
Hi @tatemono ,
Forgive me for not clearly explaining and I appreciate your persistence.
that you will make only Ā£2,730 profit
Not quite, Ā£2,730 is the different between using OpenRent and the estate agent over 3 years in fees where the rent is the same.
The net profit is say around Ā£11K per anumn. Therefore, if I went with OpenRent, over 3 years would be Ā£33K plus Ā£2,730 but with estate agent it would be Ā£33k
Not only is that also negligible but you are somehow able to forecast all your allowable expenses over those three years. As an example, a new boiler will not only wipe out that income but probably also give you a loss to carry forward exempting you from tax on your property for that entire period.
I hope now itās a little clearer that the income wonāt be wiped out, but I appreciate that things like boilers/fridges/washing machines etc may have to be replaced.
Firstly, you have an estate agent offering you long term management fees of 3% which is a pittance. Typical fees are north of 10% plus VAT. At 3%, Iād bite their hand off and wouldnāt be bothered posting here.
That is in the 3rd year and we have been with them these past 9 years, so thereās doing alright. But it good to know that the estate agent is driving a good deal from our side.
I feel having that I have to use the estate agent though. As Iām not their in person to meet the proposed tenant, Iām depending on the professionalism of the estate agency to do a through job. It is in their interest to get a strong tenant as any issues will mean a loss in income, not only for me but for them (albeit the get the fees and 7% in the first year)
Now I get it thanks.
As someone who was an overseas LL for over 20 years, Iād say go with the agent. You already have a working relationship, their rate is great even at 7%, you need someone on the ground in case things are difficult and you also need someone to vet applicants in person. For the sake of not even 10% of your predicted net profit, I think thatās a worthwhile expense.
Openrent ārent nowā is good for finding tenants if you are here and local to conduct the viewings yourself, i wouldnāt use it if i wasnāt available.
I would generally do the photos myself (or update from the prev letting), put the advert up and then you have a flurry of communication for a week or so. After a bit of back and forth comms with each Iād schedule all the viewings i thought were potentially suitable for each 15mins on he same Saturday, back to back. If about 10 people view, you would usually have a few who are keen to proceed and you then pick the most suitable. Awk them to pay a holding deposit and commission openrent to do their references.
If they pass, you both proceed and sign the contract remotely.
I certainly wouldnāt pay openrent to show tenants around your property, you then risk getting very unsuitable tenants, which is the biggest risk to your business. The people they employ to do that would not know about your property and have no interest in helping you select the right tenants, you loose that valuable f2f opportunity to assess what people are like.
Using an agent for tenant find and set up is much different to openrent, which includes a lot of DIY , hence the cost difference.
This post focus is only about cost, which confuses me. Its a very different cost as its a very different service.
Management ongoing is a separate matter.
For those not used before, when I use openrent, I take own photos, own ad, own floorplan, organise own viewings and accompanier ( me). (Once used for a tenancy, I reuse old ad next tenancy with amendments.)
Openrent publish ad that I make and upload, send enquiries to me, provide AST including online signing service and reference service, accept deposit and rent when paid.
Not sure if they provide more options at added cost.
Hope that helps.
I dislike agents with a passion, I think most of them are grifters and I wouldnāt trust them. Some of my friends that have used them have had money stolen, services charged for - but the work not done and periodic check not completed- but the house was in a terrible state.
They seem to take more advantage of people who are abroad, as what other choices do they have?
What you could do is to use OpenRent to find the tenant, and even pay a neighbour Ā£100 to do some viewings for you. The hassle of management can be reduced massively if you donāt have white goods.
Personally, I have a great relationship with all my tenant and unusually, I get them to do the viewings for the next tenants, and once theyāve chosen- I meet with them for a coffee.
I find that this approach really works for me as new tenants can see I have trust in tenants and they can ask any questions about their prospective landlord without embarrassmentā¦Iām confident that theyāll only say good things about the area and our tenant/landlord relationship.
Re: repairs, Iāve learnt to not put white goods in the properties as these will be the bane of your life, some tenants have sold on their white goods to the next tenantā¦ but thatās not my problem.
Iād also suggest not reducing the rent ( to get lots of interest) do the opposite. put the rent up, if the place is nicer than the competition.. itāll still rent. Then I normally donāt raise the rents again for the entire duration of their tenancyā¦ except recently, i did put them up 15% due to the RRB coming into force. But the rents are still much lower than the average for the area.
hope that helps.
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