Do Landlords Really Need to Use a Letting Agent?
Q: Surely it will be cheaper and easier for me to manage my properties on my own? Besides, what do those letting agents do anyway?
A: Absolutely you can manage the properties on your own. Be my guest, go right ahead. But if you are looking for passive income and true financial freedom, you might want to reconsider that decision. The letting agent can take a whole lotta strife out of your life. Here’s why:
* Letting agents find you a tenant. They advertise the property, take potential tenants around to view the property, draw up the lease agreement, place the tenants and collect the rent every month.
But be warned! There are sharks out there lurking in the murky waters, just waiting to take a bite out of an unsuspecting landlords’ ankle.
Take Zahra. She owned a tidy little one bedroom flat in a block of flats centrally located in Benoni on the East Rand of Jozi. Unit 17, Purple Peacock Heights. A string of bad tenants wore her down and she was ready to ditch the property dream and go back to playing the Lotto as her primary wealth creation method.
In swoops Harvey, from a reputable letting agency called We Let For You. Harvey oozes the cool kind of confidence you want from a letting agent and he persuades Zahra to give him a shot at finding tenants for the flat. Normally, agencies charge 10% to manage the property but Harvey promises to find a tenant for just 8%. Zahra feels like her prayers have been answered and signs all the forms, pausing to warn Harvey that if the flat was not rented within a month, she will auction the property off. Harvey smiles broadly, flashing his brilliant white teeth at Zahra and assures her no auction would be necessary, adding in a wink to seal the deal.
Days turned into weeks turned into a month. No tenant. Zahra moves ahead with her auction plans and since Harvey had the keys for the property, she asks him to open the flat for the auctioneer and lock up again afterwards. Harvey did just that and since auctions are a good vibe and entertaining to watch, Harvey hangs about to watch the auction. He claps enthusiastically as the property is auctioned off successfully to Siva Dundra. Harley locks up again after the auction and that’s the end of that.
Or so Zahra thinks…
A week later, on a sunny Friday afternoon, Zahra gets an email from Gloria, who works with Harley:
“Good news, we have a tenant who wants to move in TOMORROW!”
Zahra replies:
“Well that’s great, only as you well know, the flat is no longer mine. It belongs to the new owner as of the day of the auction. I will have to confirm with the new owner.”
#cliffhanger alert!
* Tune in next week to see what happens to the lovely Zahra and her letting escapades!