Recently, we were approached by a landlord named Mr Turner* who asked us to take over the management of his third-floor apartment from the firm of estate agents he had been using up to that point.
The property was located within a well-run, relatively new 10-year-old purpose built building in a popular part of London and with two double bedrooms, two bathrooms and a comfortable living space in a sought-after area of town, it was – on paper at least – the kind of property which should not only have been instantly attractive to prospective tenants, but should also achieve a top-end rental value.
Of course, that wasn’t the case. The property wasn’t let and an initial visit to the apartment revealed an all-too-familiar scene that explained exactly why a property that should have been instantly desirable was vacant.
Weeks-old mail was piled up the door and once inside the apartment it was immediately apparent that the poor standard of cleanliness alone meant it wasn’t in a fit state to be let. Moving through the apartment, this horror show threw up more frights than a Wes Craven scream-fest.
A gouge in the expensive wooden flooring was followed by rooms full of abandoned and discarded linen, furniture and belongings. Broken skirting boards revealed the wiring behind them.
The kitchen was awash with abandoned food, containers and rubbish bags and just when it was difficult to imagine the situation could be more bleak, the bathroom revealed the true depths to which the estate agents had allowed this fine property to sink.
Sludge and stains of soap and cosmetics left in the wake of the departing tenants littered the bathroom shelf and the tiling was growing cultures that wouldn’t have been out of place in a laboratory. The toilet seat had broken and it had been so long since the sink had seen a cloth that it was ringed with months of scum.
There were holes in the wall and, bewilderingly, a fist-sized hole in the living room floor.
So we asked the estate agent who had been managing the property for 10 years whether the hole had been there at the check-in visit when the departing tenant had originally moved in. The agent said it wasn’t – though the tenant himself told a different story.
This apartment, which should have been highly desirable to any potential tenant, had been let at a rate of £550 per week. One floor below, an apartment identical in every respect, was being let at £650 per week.
Ignoring the fact that the superior outlook of a third–floor property would actually attract a higher rental value than a similar property on a lower level, Mr Turner had lost out on a minimum of an additional £100 per week – a massive £5,200 a year in lost income.
Over the three-year rental that had seen his estate agent manage down the condition and value of his property through neglect and a lack of professionalism that beggars belief, Mr Turner had also lost out on more than £15,000 of rental income – and to add insult to injury was then also saddled with the bill to bring the apartment to a condition where it could be re-let.
To rub salt into the wound, Mr Turner had paid his estate agent £5,148 in commission 12 months in advance every year for the privilege of them letting and managing his property.
Over three years these fees would be the normal 18% inc VAT and on the lower rent of £550 per week the estate agent would charge £5,148 each year – a total over the rental period of another £15,444 in fees.
Of that £15,444 a whopping £5,148 was to manage the property and that money was taken from the rent each year 12 months in advance!
It is easy to see that the landlord has not had what could be described as a well-managed property asset – and all because his estate agents had failed to do the very job they had been paid to do – and for which they took their commission-based fees a year in advance.
Now compare that with what would have happened had Property Wealth Management been managing Mr Turner’s apartment from the start:
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*For reasons of privacy, the name of the landlord has been changed.Back