Landlord money saving by keeping letting agent costs down to increase margins is an important strategy for property investors who want to increase yields.
One are to highlight is letting agent fees for calling out tradesmen for repairs.
Many tradesmen in large towns and cities have ‘arrangements’ with letting agents for priority call-outs in a tenant emergency.
However this priority treatment comes at a cost.
It’s certainly not uncommon for tradesmen and letting agents to load call-out and labour charges and to pass the costs on to landlords.
A typical arrangement is for the tradesman to pay the letting agent a set commission for the referral and then to load the bill by 10%.
Landlords have several options for dealing with repairs –
- Go along with the letting agent and the loaded fee as it’s hassle-free and gets the job done
- Manage call-outs by having a list of trusted tradesmen available
- Sign up for emergency call-out or breakdown cover with a utility or home insurance company
Managing call-outs has a distinct disadvantage – you have to speak to tenants and the calls can come in at any time of the day or night.
Keeping boilers and other appliances services and in good working order certainly helps cut down call-outs.
Looking after other small maintenance jobs, like clearing gutters to prevent damp, painting and decorating.
If you live near the rental property, many of these small jobs are cheap and simple to carry out without the need of a tradesman.
The pay-off should not only be fewer moans from the tenants, but a more homely, comfortable property where tenants will want to stay and a better net yield as the cash will stay in the landlord’s pocket rather than go to a letting agent.