Will easyProperty cost landlords more?

Landlords who use easyProperty may find it no cheaper than a traditional agent – and could lose out heavily.

Richard Lloyd, of specialist recruitment company Lloyd May, says that costs would be almost identical.

In his blog – see below – he says that a landlord who wanted tenant find, advertising, property particulars, tenancy agreement and deposit protection, hosted viewings, and inventory and check-in services, would pay a high street letting agent £500, while easyProperty would charge nearly £511.

However, says Lloyd, the landlord could lose out on rents achieved because as an online agent, easyProperty might not have local knowledge of market rates.

Rents locally could have increased. Alternatively, they might have gone down, meaning that the cost of marketing an over-priced rental property turns out to be an expensive mistake.

Lloyd also says that letting agents do not get paid until after they have done a considerable amount of work – and then, only when the landlord has confirmed they are happy to go ahead.

Here is what he says:

 

Not so EASY… by Richard Lloyd

 

There will always be an element who want to fully embrace technology and there will always be people who will only ever pay the bare minimum regardless of what is on offer, but to claim that easyproperty.com will make huge savings is way off the mark.

 

Comparison of Tenant Find: Online Offering versus Local Agent (outside London)

Online Offering (easyProperty) Local Agent (outside London)
Fixed Tenant Find Fee (1)     £400
Advertising £59.99 Included
Pictures & Details £149.00 Included
Tenancy Agreement & Deposit Protection £24.99 (1)     Included
Hosted viewing (1)     £159.98 Included
Inventory and Check-in £117.00 £100
Total cost per rental £510.96 £500
  1. Fixed Tenant Find Fee is based on 50% of the first month’s average rental value outside London of £800pcm
  2. Free with DPS
  3. Hosted viewing of 8 views per hour will require 2 hours at £79.99 per hour to meet average views of 12 per rental

 

Where is the added value?

 

What the online offering is unable to provide is an in-depth knowledge of how rents can vary on a local level and how rents may have increased or decreased over a given timeframe.

It is a known fact that up to one-third of landlords are achieving below market rate, because they either have not been advised or are not aware that the market may have increased over a specific timeframe and not reviewed accordingly.

An online offering can never be able to provide this level of detail to a landlord, which ultimately could end up saving him or making him a lot of money.

The cost of marketing an overpriced rental property can be an expensive mistake, which will result in lost rent, and an undervalued rental will hammer yields.

This gets me back to proper advice from an experienced agent who can provide historical trends and offer real time comparisons within a local market. This value-add is ignored by an online offering, which is when its model starts to fall down.

The viewing to rental ratio outside London is 12, which means the cost of hosted viewing will roll into another hour with the cost doubling to £159.98. How will these viewings be monitored and who will be there to check?

Potential tenants are notoriously bad at turning up on time. Again, how much knowledge will the “host” have on market or local specific questions like amenities, schools, etc. Will this person be fully aware of whether the landlord will accept children or pets?

Given the rentable stock is likely to be spread firmly across the UK, how will the logistics of keys be dealt with?

A good lettings agent will screen for the right applicants and will properly qualify suitability by confirming job, income, credit record, number of occupants and, for example, pets prior to setting up viewings, thus saving valuable landlord and agency time.

This person will also go out of their way to select the right tenant, not just any tenant, and so mitigating the risk of an impending disaster.

Also how detailed will the inventories be and who will be on hand to deal with discrepancies and disputes? In my experience there will be many!

People tend to forget that lettings agents work 100% for the landlord and it is their sole aim to achieve the best possible rent and source the best available tenant.

Nobody gets paid until the landlord has confirmed that he/she is happy to go ahead and the tenant is in situ. No money changes hands upfront.

Unlike the online model, agents work 12 hour days and weekends on behalf of their landlords and vendors, and the vast majority are highly professional and passionate about offering excellent service to their customers.

Clearly technology has a place in this rapidly changing world, but it is my firm belief that the winners in this cyber race will be the people that combine recognised property brands with an excellent online offerings coupled with highly competent boots on the ground.

Given the choice, I know who I would use.

If it was so ‘easy’, surely everyone would be doing it.

* Lloyd May specialises in placing mid to senior estate agents and property professionals across London and the home counties.

4 Comments

  1. Beano

    Agreed, and how nice it would be to find a landlord willing to pay 50% of rent for a tenant find.

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  2. MF

    Excellent article!!!

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  3. Woodentop

    What is the biggest gripe with landlords …….. tenants from hell and some key areas (which I will not disclose) in weeding them out, is impossible to do on-line. Playing with fire comes to mind.

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  4. Eric Walker

    As with many of these online models in both sales and lettings, they inevitably appear cheap in London, but less so in the lower priced areas of the UK which limits their scope. Add in the 'money up front' element and it starts to get questioned. Then consider this – I can get several really good agents marketing my house free of charge and only pay a fee to the one which is successful rather than commit myself financially with no guarantee of any result. They key will of course be in establishing their online presence which will be very costly. I can see the attraction to tenants with no fees, but tenants go where the properties are which is why some agents can charge such high fees. In sales of course, buyers still don't care how much an agent is charging the seller, they just want a property and the only thing that will entice them away from RM & Z is cheaper properties. That has it's pitfalls as it's not the best way to attract vendors.

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