Letting Agent Fees For Landlords

Letting Agent Fees For Landlords

For those who own multiple properties, a popular option is to begin renting out some of the spaces for tenants. But hosting tenants can be very time-consuming, so for many private landlords, using letting agents to manage their properties is a popular option.

Letting agents will assume responsibility for corresponding with tenants and organising all aspects of maintaining the property as well as collecting rent and dealing with deposit disputes. For providing these services, letting agents will charge landlords a fee.

If you’re a landlord interested in using a letting agent or you’re someone thinking of becoming a landlord for the first time, our guide to letting agent fees is just what you need. We’ll give insight into the cost of employing a letting agent, which fees cover which kind of services, and whether it’s necessary to use a letting agent as a landlord.

What are letting fees (for landlords)?

Letting fees are charges that letting agents impose on landlords for the services they provide. These fees typically cover the costs of advertising the property, finding suitable tenants, conducting viewings, handling legal and administrative tasks, and managing the property. Letting agents may also charge additional fees for services, such as tenant referencing, inventory checks, and tenancy renewals.

How much are letting agents’ fees for landlords?

Letting agent fees for landlords can vary depending on a number of factors, including the location of the property, the level of service provided, and the experience of the letting agent. According to a study conducted by Which?, average letting agent fees range from below 10% to above 20% of the rent, depending on the service.

Are there different letting agent fees for different services?

Letting agents may charge different fees for a variety of services. The following are some of the most common types of fees that landlords may encounter:

Tenant Find Fees: This fee is charged for finding a tenant for the property. The fee is usually a percentage of the first month’s rent, typically around 50-100%.

Tenant Referencing Fees: Tenant referencing fees are charged for checking the suitability of a tenant. The fee is most often a fixed amount, around £50-£100 per tenant.

Management Fees: Management fees are charged for managing the property on behalf of the landlord. This may include tasks such as collecting rent, arranging repairs and maintenance, and dealing with tenant complaints. Management fees are typically a percentage of the monthly rent ranging from 10-15%.

Renewal Fees: Renewal fees are charged for renewing a tenancy agreement between the landlord and the tenant. The fee is usually a percentage of the monthly rent, typically around 10-15%.

Inventory Fees: Inventory fees are charged for creating an inventory of the property and its contents. The fee is usually a fixed amount between £100-£200.

Gardens and Grounds Maintenance Fee: If you have a garden or other outdoor space as part of your property, you may be charged a fee for having it maintained. A landlord will pay anything from £20 to £100 per month, or more in some cases.

End of Tenancy Cleaning Fee: Some letting agents will charge a fee for arranging professional cleaning of the property at the end of your tenancy. An average cost would be between £50 and £200, but cleaning can cost even more.

You can pick and choose which of these services you require and those you want to perform independently. The fees can add up, particularly as each will include VAT on top, so see if you can negotiate a lower fee or consider going for a full management service. A full management service essentially allows you to rest assured that each day-to-day aspect of managing your property is taken care of. Full management fees typically range from 10-20% of your monthly rent plus VAT.

Do I have to pay a letting agent, or can I do it myself?

Landlords are not legally required to use a letting agent to let their property. Landlords who wish to save money on letting agent fees may choose to let the property themselves. However, this can be a complex and time-consuming process, particularly for those who are unfamiliar with the legal and administrative aspects of letting a property.

Landlords who choose to let the property themselves will need to advertise the property, conduct viewings, handle tenant referencing, create tenancy agreements, and manage the property. They will also need to ensure that they comply with all relevant legal and regulatory requirements, such as obtaining gas safety certificates and complying with deposit protection legislation.

What is the difference between a lease and a rental agreement?

When discussing the finer details of someone moving into a home that is owned by a landlord, there can often be some confusion between the terms ‘lease agreement’ and ‘rental agreement’. At times, they are used interchangeably, as they are both legally binding.

However, they each serve their own distinct purpose. A lease agreement is a contract between a tenant and landlord that gives the tenant the right to live in the property for a specified period of time, typically for 6 or 12 months. A rental agreement is similar to a lease agreement, but a key difference is the length of the contract. A rental agreement is more suitable for short-term stays and usually lasts around 30 days.

Want to find out more about letting your property with Purplebricks? With local rental experts and a range of service packages, get in touch to learn about our fees and discover how we can help you today.