How Much Does It Cost to Let My Property?
We understand that letting a property is huge commitment. Our goal is to provide you with an honest, transparent and reliable price guide to assist you.
If you’ve ever considered letting your property (whether you own one or several) one of the first questions you’ll have is “how much will it cost?” followed by “how much will I make?”
How much you make depends on the property itself and what it has to offer prospective tenants.
On the other hand, it’s much easier to describe the costs you’ll incur when letting your property.
You may have inherited the property, or you may be moving abroad for a period.
You could be up or downsizing but don’t want to part with your existing home.
You may be buying a property as an investment.
Whatever the reason for wanting to rent your property, it’s essential to choose the right management service to allow you to enjoy your property income with minimal stress.
You may not consider yourself as a landlord, but in the eyes of the law, you are a landlord.
And, some rules and regulations come with the title.
The best way for you as a landlord to comply with the regulations is to employ the services of a letting agent. An agent who will ensure that you only have carefully vetted tenants. Responsible care and maintenance of your property is a crucial function of your agent’s service.
A good letting agent will also be able to provide you with a range of services to meet your needs and budget.
These services fall into the following categories:
• Advertise your property
• Find your ideal tenant
• Collect the rent from your tenant
You can choose which of these options you need, but for peace of mind, a full management service option is the one which ensures your property is cared for and maintained the way you would if you lived in it.
The first thing to note is that the cost of letting your property depends upon how much you are able and prepared to do yourself. Remembering, of course, that in taking on some of the responsibility you also assume some of the risks.
So, let’s examine how the type of service you choose affects how much letting your property will cost.
How the type of service affects the cost
1. Advertise Only
This service is ideal for you if you see yourself as a DIY landlord. A letting agent providing this level of service should include
• Photographs of your property (both inside and out)
• Creation of a floor plan drawing
• Creation of a virtual tour (if possible)
• Advertising your property on Rightmove, Zoopla, Primelocation, agent websites and other property websites.
• Vetting of all prospective tenant enquires and details passed to you, so you can arrange to show them the property.
With an Advertise Only Service, once a tenant has been identified you then need to undertake the following yourself:
• Obtaining tenant references
• Drawing up of the tenancy agreement
• Compiling the inventory
• Organising the Schedule of Condition report
• Checking the tenant into the property
• Registering the deposit
• Transferring the utility supplier accounts
• Collecting the rent
These items are often where the challenges lie for the unwary or inexperienced landlord.
A good letting agent should also offer to add the list above to an Advertise Only service for an additional fee.
An Advertise Only Service is a one-off fee and would start at around £240 including VAT. You agree and pay this in advance.
2. Find Tenant Only
With this service you should expect the letting agent to provide:
• Photographs of your property (both inside and out)
• A floor plan drawing
• A virtual tour of your property (if possible)
• Advertising of your property on Rightmove, Zoopla, Primelocation, agent websites and many more property websites
• Conducted viewings by agency personnel
• Drawing up of the tenancy agreement
• An inventory
• The Inventory and Schedule of Condition report
• Check the tenant into the property
• Collect the first month’s rent and deposit
• Register the deposit
• Transfer the utility supplier accounts
• Carry out the check-in service
With the Find Tenant Only service, you, the landlord become responsible for the ongoing collection of rent and dealing with the challenge of non-payment of rent should this arise.
You will also be responsible for addressing maintenance issues. Some of which have a habit of occurring at the most inconvenient times.
You also need to take responsibility for carrying out regular inspections of the property and if necessary, issuing relevant notices.
A Find Tenant Only service is also a one-off fee and starts at £600 including VAT. You can add additional services if required.
3. Rent Collection
It’s normal for this service to include everything mentioned in a Find Tenant Only service but also consists of the collection of your rent, chasing arrears and issuing appropriate notices.
A Rent Collection service is an on-going service paid monthly. Expect to pay from around £100 per month, including VAT. The actual cost is based upon the rental income achieved and any additional services which you may wish to add.
4. Full Management Service
If you are like most landlords in Chichester, then not having any stress with property management is the best option. No more late-night maintenance calls or chasing tenants for non-payment of rent.
There’s also no need to keep up to date with changes in legislation and regulations. The agent should do this.
This is the role of a Fully Managed service. This service should include everything in the Find Tenant Only and Rent Collection services, plus regular property inspections with reports and all maintenance issues handled 24/7 365 days a year.
The arrangement of mandatory safety checks, annual rent reviews, serving and receiving notices, operating a check-out service with the tenant should be included in a Full Management service. Dealing with any dilapidation’s and deposit returns should also be included.
A Full Management service should start at around £120 per month, including VAT. The actual cost is based upon the rental income achieved and any additional services which you may wish to add.
As a guide, most landlords in the Chichester area are paying between £130 and £190 per month for a Full Management service.
Typical “add-ons” to the services offered in the letting of a property which you may find useful:
Services offered, and costs associated, vary quite a bit. Everyone has different requirements and budgets when it comes to the letting of their property.
As well as the service options, there are also additional services/legal requirements offered.
An Energy Performance Certificate – A Legal Requirement
It is a legal requirement to arrange for an EPC inspection to be carried out before any marketing of the property. These certificates are valid for ten years, and prices usually start from £114.
A Gas Safety Certificate – A Legal Requirement
In your role as a landlord, you have a legal requirement to ensure that you have an annual gas safety inspection carried out on your property. A registered Gas Safe engineer must perform the check. Prices start at £65.
Professional Inventory and Schedule of Condition report
A good letting agent would always recommend a Professional Inventory and Schedule of Condition report. This is compiled at the start of the tenancy and is the best way of ensuring your investment is protected.
The Inventory and Schedule of Condition report describes the property in detail and includes a thorough list of contents with the condition noted and accompanied by extensive photographic records.
This document will form the basis on which the return of the deposit, or part thereof, is calculated at the end of the tenancy. This report provides evidence should there be a dispute. Prices start from £120 depending on the size of the property.
This service compliments the professional Inventory and Schedule of Condition report. The agent meets the tenant at the property on moving in day and a walk-through of the property with the inventory will be carried out. Reading of the energy meters is carried out, and then both parties sign two copies of the Inventory and Schedule of Condition report. The tenants keep a copy for their records, and a copy is kept on file. Prices start at £85.
This includes delivery and proof of providing the tenant with the following documents:
• Energy Performance Report
• Gas Safety Certificate
• A How to Rent Guide
• Deposit Prescribed Information
This service should also include:
• Drafting of the tenancy agreement
• Collection of the tenants’ identification
• Online signing of the tenancy agreement
• Registration of the deposit
• Standing order set-up
• Collection of the first month’s rent
• Preparation of the Inventory and Schedule of Condition report
• Check-in service.
The cost for this starts at £240.
You should have your property professionally cleaned before the tenancy starts as the tenants must leave your property in the condition that they find it.
Tenancy agreements require the tenant to have the carpets professionally cleaned when they vacate. You must do the same before the tenancy commences. Prices vary.
Smoke and Carbon Monoxide alarms – Legal Requirement
It is a legal requirement to have a smoke alarm on each floor of your property with tamper proof alarms that usually last for ten years. £28.50 per alarm + installation cost.
Hopefully, this guide will give you a good insight into what it takes both financially and physically to be a good and profitable landlord.
At PMS Lettings here in Chichester, we can provide you with all the services outlined above. We have extensive knowledge of the Chichester area and of looking after rental properties on behalf of their owners.
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