Possible first time landlord, costs?

[Risk Reversal]

Thanks,

Have been quoted initial fee of 6% + VAT of the total annual rent for placement of tenant and 8% + VAT monthly for management of the letting. This works out at just over two months rent for the year, which I think is very expensive.

Given the shortage of available properties in the Dublin commuter area, is the initial fee high for what is a template rental agreement and vetting of tenants?

Have first time landlords decided to manage themselves or are the costs worth it for a letting agent?

 

[Leo]

Have first time landlords decided to manage themselves or are the costs worth it for a letting agent?

How many quotes did you get?

 

[Bronte]

Have first time landlords decided to manage themselves or are the costs worth it for a letting agent?

I use family and pay them 10%. Be VERY careful which agent you hire. But if I were in Ireland there is no way I'd pay anyone to do the job.

 

[Bronte]

I
Rental Income: €22,200.00

Expenses:
Insurance €1,000.00
RTB Reg €90.00
Property Management €2,220.00
Repairs €1,500.00
Accountant €750.00
Total: €5560
Total taxable: €16240

Tax @ 20% €3,248
PRSI @ 5% €812
USC @ 0.5% €81
PRT €400.00
Total Tax: €4541

22200- 5560 costs - taxes 4141 = 12499.

Put 300K into a bank and you won't even get 1% which would be 3K, less DIRT.

Hard to see a return on 300K without risk that would give you 12K directly.

 

[Risk Reversal]

Got two quotes at similar levels. I can accept the monthly management costs. However, the initial placement of nearly 7.5% of the total annual rent given the level of demand in the market for nothing more than a simple vetting process is hard to come to terms with.

 

[elcato]

Hard to see a return on 300K without risk that would give you 12K directly.

Just to point out here, if the landlord is a PAYE worker on the higher rate of tax, the return would be about 7.5k. Add a month or two vacant and a few mishaps with wear and tear and you would be considerably closer to the 1.5k in the bank.

 

[elcato]

However, the initial placement of nearly 7.5% of the total annual rent given the level of demand in the market for nothing more than a simple vetting process is hard to come to terms with.

Is this per annum ? I used an agent who charged me but if they stayed put they didn't get anything after a year. Mind you I think it was nearer 5%.

 

[Risk Reversal]

First year only. I would imagine it's on a per tenant basis, so should the lease terminate after a year the same would apply again

 

[Risk Reversal]

Why would s/he need to be prepared for late night phone calls?

I agree Folsom, an agent would operate normal office hours and wouldn't be answering late night phone calls either

 

[deeobrien]

In the Let & Management quotes I've got the let fee is only charged if they are not managing the property. So for example it was 7% + VAT of the term of the lease for letting only. Letting and management is 8.5% + VAT of monthly rental. It wasn't a case of them charging the 7% + the 8.5%.