Possible to change management company?

AnCiotog

I am currently using an auctioneer to manage my rental property. They are providing a shocking service, is it possible to change and if so do I have to pay them something in order to leave?

Some examples are: Being paid to manage issues in the property but keep asking us to sort them, the lease in the property is up since January 25th, yet we had to go to them last week to check if the tenant is staying. Their reply was they texted the tenant to see and would let us know his reply. It's a full week later and nothing since. Is this the norm, surely not?

seamus

You would have signed a contract with the management agent when they agreed to take it over. So the termination requirements will be in there. If you have nothing like that, then you can just tell them you're going with someone else. They would be entitled to their fees up to the day you switch over.

Your issue really is in handling the tenant - if the agent is collecting the rent, you need to make sure the tenant starts paying rent to you (or the new agent). So it can be easier all round if you arrange to change agent immediately after a rent day.

Asking the landlord to sort issues can be normal enough, if the agent doesn't have the power to sort them (like contacting a utility or something), but by and large it sounds a bit wishy-washy. I wouldn't mind a landlord texting a tenant, but a management agent who's supposed to be professional, sending texts is a joke.
It sounds like he considers himself to be a phone-answering service for you and little else.

AnCiotog

That's what we feel too, but just wanted to see what others thought because it's our first time doing this. We are reluctant landlords. Bought a house with a sibling in 2006, and then moved on when we married in 2012 and 2013. We would love to sell but still in negative equity so we're stuck in a situation we don't really want. But we paid this agent to look after the rent, take care of any minor repairs etc. However, if something like a tap goes or some other minor issue they ask me to get my husband to do it. We refuse every time telling them we are paying them for this service as we don't live in the same area as where the house is. We could get there in less than half an hour but this is why we got them in the first place! The tenant is excellent and this is wonderful, but the agent is shocking!

athtrasna

Are you actually paying them a management fee as well as the letting fee? Lots of people assume the letting fee includes management.

AnCiotog

I'm paying them €50 a month for it!

AnCiotog

Plus one month's rent at the start.

Mrs OBumble

What does your contract with them say?

If you decide to fire them, make sure you get the deposit from them (if you don't have it already), and also the inventory.

If your tenants are good and want to stay, you may choose to manage it yourself for a while, and only hire someone else again when the tenants leave.

AnCiotog

Right, I have another query on this. They are being paid €50 a month in management fees, now they want €100 for inspection of the property and signing of the lease. Is this normal? I'm leaving them once the lease is sorted, but just wondering about this?

Michael D Not Higgins

AnCiotog wrote: »

Right, I have another query on this. They are being paid €50 a month in management fees, now they want €100 for inspection of the property and signing of the lease. Is this normal? I'm leaving them once the lease is sorted, but just wondering about this?

Did you sign an agreement with them? What was covered in that agreement?

MarkAnthony

€50 a month is pretty low in regard to management fees. That said if that was what was agreed then that was what was agreed. You need to make sure you're operating your business like a business, get things in writing, make sure things are done and if you're not happy find someone else.

Personally I don't get why so many people rely on letting agents, sans major geographical issues it's a doddle to do it yourself.

power101

We don't know what the rent is to decide whether €50 a month is low or high. A management fee can be anywhere from 5/7.5% for managing many properties to 10/12.5% for a single property. The OP told us they took the first months rent aswell as a fee so it's not just 50 a month.

Is this a new tenant they are getting in or another contract for the same tenant. Of course you can get rid of them at any time but check what your contract says. I would say to get rid of them before getting new tenants in rather than after. If they are as bad as you say do you really want them choosing your tenants aswell?

MarkAnthony

power101 wrote: »

We don't know what the rent is to decide whether €50 a month is low or high. A management fee can be anywhere from 5/7.5% for managing many properties to 10/12.5% for a single property. The OP told us they took the first months rent aswell as a fee so it's not just 50 a month.

Is this a new tenant they are getting in or another contract for the same tenant. Of course you can get rid of them at any time but check what your contract says. I would say to get rid of them before getting new tenants in rather than after. If they are as bad as you say do you really want them choosing your tenants aswell?

Even if it's 25% of the rent, €50 isn't a large sum of money when it come to the letting agency racket. Like just about everything you get what you pay for. The work to manage a €200 let is the same as a €2000 let, you just have to have 10 times as more lets to make the same profit; the obvious upshot being you'll have 10% of the time.

There's no suggestion from the OP that he's got multiple properties managed.

power101

MarkAnthony wrote: »

Even if it's 25% of the rent, €50 isn't a large sum of money when it come to the letting agency racket. Like just about everything you get what you pay for. The work to manage a €200 let is the same as a €2000 let, you just have to have 10 times as more lets to make the same profit; the obvious upshot being you'll have 10% of the time.

There's no suggestion from the OP that he's got multiple properties managed.

AS said above it's not just €50 a month , they take the first months rent aswell. It depends on location . Rents outside dublin are 500-700 for 1-2 bed apartment. 50-70 euro a month would be normal fee. Nothing low or cheap about it. In Dublin yes if it was only 50 a month that would be cheap but they also take first months rent. In fact it actually pays them to kick tenants out each year so they keeping getting that first month.

power101

Just an example-

Accommodation in Dublin at 3000 a month

Total Rent a year 36000
First month taken (3000)
50 a month x12 (600)
Net Rent 32400

Management cost 10% - Normal Cost

Accommodation in Dublin at 1600 a month

Total Rent a year 19200
First month taken (1600)
50 a month x12 (600)
Net Rent 17000

Management cost 11.46% - Expensive ( Above normal 10%)

Accommodation outside Dublin at 700 a month

Total Rent a year 8400
First month taken (700)
50 a month x12 (600)
Net Rent 7100

Management cost 15.48% - Very Expensive ( Above normal 10%)

wonski

power101 wrote: »

In fact it actually pays them to kick tenants out each year so they keeping getting that first month.

Wow. Just wow.

I don't know what to say tbh. .

What kind of agent are you dealing with ???

Baby01032012

wonski wrote: »

Wow. Just wow.

I don't know what to say tbh. .

What kind of agent are you dealing with ???

All agents, once the 12 month lease is up, want a landlord to put another lease in place/ renegotiate the rent so that they can charge another fee. Absolutely no need as Part IV takes over. A new lease of needed can be printed from the web.

athtrasna

The first month is usually the letting fee and the monthly charge is the management fee. Used agents for years and that's how it worked.

AnCiotog

I've not got a chance to read all these yet, but the €50 is 8% of the rent because the property isn't in a city but a rural town. Also, geography is the reason for having an agent, and thirdly it's the same tenant all the time. he's an excellent tenant.

AnCiotog

And yes, there was the month's rent at the beginning. It's one property, I lived in it til I married and moved to another area, so it wasn't a buy to let property. I'm a very reluctant landlord, never wanted to be one, and certainly don't want to remain one. The house is in negative equity.

Mrs OBumble

AnCiotog wrote: »

thirdly it's the same tenant all the time. he's an excellent tenant.

In that case, you may consider firing the agent and dealing directly with the tenant.

You need to read your contract with the agent to see what penalties are attached to this. If you want to go ahead, just tell the tenant that's what's happening - may be split the difference with them so their rent drops a little.

It's really just the same as changing your supplier for bins, telephone, etc - you just have to read your contract and see what's allowed.

AnCiotog

I'm definitely moving and have another ready to go. My issue is the €100 for signing a lease and inspecting the property, surely this should be covered by the monthly fee.

Michael D Not Higgins

AnCiotog wrote: »

I'm definitely moving and have another ready to go. My issue is the €100 for signing a lease and inspecting the property, surely this should be covered by the monthly fee.

What does your contract/agreement with the agency say?

power101

Now I have something to work with!

Actual figures:

Rural Accommodation outside Dublin at 625 a month

Total Rent a year 7500
First month taken (625)
50 a month x12 (600)
Net Rent 6275

Total Management cost 16.33% - Very Expensive ( Above normal 10%)

Is this a new tenant or the old tenant getting a new lease?

You could download a lease yourself if its the same tenant. Save yourself some money but no an inspection and new lease would not normally be covered by the monthly fee.

AnCiotog

That's all I needed to know, thank you.