Rental DIY Step 1: Find a Tenant

The quarters of the sev’ral chiefs they show’d;
Here Phoenix, here Achilles, made abode;
Here join’d the battles; there the navy rode.

For those who missed don’t give a shit about the latest update from my personal life, I’m moving in with my other half, who owns a house out in the sticks. Surrey – brace yourself – here I come! 😉

And so it happens that I’ve become an accidental member of the landlord class.

I’ve been reading this property blog, and I like it. One gets a distinct impression the author doesn’t have much time for high street estate agents. He thinks they rely on Rightmove and a busy rentals market, and little else. And their fees are extortionate.

I agree.

Having considered taking the conventional approach, which involved having two high street estate agents come ’round for a rental valuation, I’ve decided to do it myself and use an online agency instead. The fees that the high street guys and gals were proposing to charge me beggar belief, but what really put me off what their refusal to fuck off after the tenant is found, referenced and settled.

I agree that it’s fair, in principle, to charge a fee for a property management service. But if there is no ongoing management service, then the transaction should be simple – they find me a tenant, I pay them, and then they leave me and the tenant in peace.

The agents I spoke with didn’t want to hear of it. In addition to me paying them between 11% and 9% of my gross annual rent for putting a tenant in place, they wanted to continue to stick around to collect the rent (via a direct debit from the tenant’s account) before paying it on to me later, and to charge me again each time a rental agreement expired. Say you sign up a tenant for a year, and after the year is up they want to stay for another year. Then I’d pay the same fee again for the so-called “renewal”! Based on an annual rent of £25,000, that’s a 2,500 for nothing. Literally. Because: once the Assured Shorthold Tenancy Agreement expires, there’s no legal requirement to do anything at all. Because: it automatically rolls into a Periodic Tenancy.

So yeah, I went the DIY route. I had to use an online outfit to post my ad on Rightmove and such, but only because Rightmove, Zoopla, et al don’t do business with individuals. Instead of the £2,500 plus sundries I paid just over £100, which included a Rightmove premium listing. And I had to fork out £26 for a set of iPhone camera lenses on Amazon. Because: wide angle photography.

It took 6 days and 4 viewings to find a tenant. I didn’t go for the maximum rent that the high street agent valuations suggested. Pricing it at mid-point in their range allowed me to pick the tenant I wanted from the 3 offers received. It still gives me a pre-tax rental yield on cash invested in home equity (i.e. not the total property value) of 8.6%, which isn’t bad at all. Also, the tenant signed up for 2 years, which hopefully means less hassle by way of not having to re-advertise in 12 months.

As for the rental agreement, I used the Model Agreement provided by the Ministry of Housing, Communities and Local Government. It doesn’t appear to be updated for GDPR, but who cares. The IO registration that’s required of all private landlords is ridiculous anyway, and the repercussions are zilch.

Oh, and the just in case anyone needs practical advice on renting a property, the Property Investment Project blog is a great starting point. The author sounds like a reasonable landlord, who takes it all seriously.

7 thoughts on “Rental DIY Step 1: Find a Tenant”

    1. Yes, estate agents, including online ones, offer it. One of the conditions before they extend the cover might be that they have to do the referencing of the tenant. You’ll have to check…

      Like

  1. Interesting post…looking becoming a long distance landlord (current live outside the UK and will have a flat to rent out soon) and recognise the management fee topic but always assumed that also covered issues like procuring and managing repairs, occaisional checks on the property etc.
    Sounds like you plan to manage any issues arising with the property yourself?
    Grateful for the heads-up on the contract roll-over charges – that is frankly bonkers..
    Neil.

    Like

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