A firm launching a service aimed at helping landlords avoid having to use agents, is predicting that lettings firms will charge close to 18% after the fees ban comes in next week.
Rentora says it is targeting “buy-to-let landlords who want to avoid a widely anticipated rise in agents’ fees next month”.
Rentora says its own service charges less than half the average letting agent fee.
CEO John Wade, who initially built the platform to manage his own properties, said: “We only charge 5% of rent payments.
“The average cost for a letting agent, on the other hand, is currently around 12% and we expect it to be closer to 18% from June.”
The tenancy fees ban is set to be implemented on June 1.
A number of agents who will effectively be unable to charge tenants for anything other than rent, deposits and bill payments, have already said they expect to pass some costs on to landlords.
The new Rentora platform includes a suite of management tools. Tenants are reminded by text when rent is due, and they can pay securely online.
Tenants can also build up a credit rating through the platform’s relationship with Experian.
Landlords are also reminded by text and email notifications of key dates, including when gas checks are due.
Wade said that the ban on tenancy fees is just the latest in a line of hits on buy-to-let.
He said: “Budgets are so tight for many landlords that rising agency fees will push them into loss-making territory.
“Many landlords are going to have to consider managing properties themselves. Rentora has been designed to make that a lot easier so they can stay in profit.”
Comments (43)
Aaron, Co-founder of Rentora here.
First off, those of you who have commented, thanks for taking the time out of your day to leave your feedback.
Secondly, we know Rentora won’t appeal to everyone.
It might surprise you that we don’t have a vendetta against estate agents – Rentora is predominantly aimed at private landlords.
Why? Because we are private landlords.
We built a suite of tools to help us and our tenants. Eventually, our friends saw it and they wanted to use it. Now, we’re at a point where we’ve carefully priced it, and opened it up to the public.
Hi Aaron,
Firstly, all the best with the new proposition.
I am not an agent or a landlord but work in the property industry, so I have ‘skin in the game’ as it were, but not on this particular issue. From reading the comments, I think the major issue many have is that some of the statements that Rentora has made could be misconstrued as a direct attack on Lettings Agents, despite your above comments that this is not the case.
It may be that you could re-word some of these in order to avoid alienating people who may otherwise consider using you, or at the very least it may create some goodwill where currently it doesn’t seem to exist.
Just a thought 🙂
Fair point, Dom.
We do continuously look at the wording, and split test it to see which works best.
Since we’re marketing towards private landlords, as far as we can tell, the audience we’ve had thus far haven’t had issue with the wording.
Due to this though, it’s also likely that not many estate agents will have seen the website up until now.
We’ll take a look at it. Apologies to anyone who’s feathers we ruffled.
Sorry but you really need to get it right and this worries me that you haven’t got an idea what you really know.
You are marketing towards “private landlords” ……. the audience we’ve had thus far haven’t had issue with the wording.
Try this: “private self-managing landlords” …….. this is what you are, is it not? Or are you saying any private landlord at 5%, plus a managing agents fee you suspect will increase to 18% (but has your 5% service included) resulting in them paying 23%. Sounds silly but that is how it reads.
You need to know (it would appear you don’t) that in many parts of the UK you need a licence etc to take rent payments (England is the exception, so far) and many landlords have dropped out of self-managing (not all, some are still very happy to do it themselves) as they have issues/dislike with licencing requirements and moving towards agents (who have seen a big increase) who do the rent collection etc in their management fee.
Licensing does not apply as Rentora do not take any rent. The money is paid direct to the landlord using a service similar to PayPal.
“When tenants pay online by credit or debit card, we skim a small processing fee of 5%. The rest is paid directly into your bank account”.
This is classed as rent collection and a management duty under current licensing rules.
“It might surprise you that we don’t have a vendetta against estate agents”
But on your website it states
“Low quality printed inventories from estate agents are a joke”
It might surprise you that estate agents don’t all use low quality printed inventories. Maybe it’s claims like this that “ruffles feathers”? I’d like to wish you good luck but you sound like every other hipster techy that thinks they’ve come up with a brilliant idea then proceeds to bash the very industry they’re wanting to enter into.
This tool is brilliant for DIY landlords. I see all negative comments are from threatened letting agents and not self made landlords. Being on many landlord forums it’s become apparent that both agents and private landlords are planning on increasing rents to cover all the extra costs associated with the tenant fee ban. One or two have suggested they will maintain current prices, which can only mean one thing – to be able to absorb all these additional costs they were clearly overcharging in the first place!
This is a management tool to enable us self managed landlords to carry out our business in the most efficient and organised way possible without having to pay extortionate fees. I’ve recently started using it and my tenants love the flexibility of smart payments and the convenience of paying on the go as well as contributing to their current credit score with Experian. I have always interviewed my own prospective tenants too given that I obviously want the best one possible to entrust with MY investment.
Its definitely something I would recommend to DIY landlords that don’t want to be ripped off by rogue agencies who lets face it, don’t have a vested interest in your property, just your cash.
See above and you will question your own comment why agents seem threatened. You are correct a tool for self-managing agents. Very wrong for Rentora to mix self-managing, with managing and no wonder why there is a reaction on a platform which has a strong presence of agents.
You could argue thought that they need to take the best care possible of your property and tenant in order to get your cash?
Don’t forget, if we put in a tenant who doesn’t pay, we don’t get paid. If we put in a tenant who trashes the place, you will probably leave the PRS, and we don’t get paid. If we dont inspect and maintain the property, the Tenant leaves, and we don’t get paid.
So I’d argue we do have a very great vested interest in your property, as it’s the only reason we get your cash.
“It even allows tenants to pay difficult months like December off in small amounts through the year, essentially giving them a payment holiday.”
If paid in advance, this could technically be a deposit which would need to be secured accordingly else the LL could end up losing out in court. Or its paid after the payment holiday, which means the tenant is someone who is in arrears.
Neither of these possibilities sounds great to me.
Actually, that’s a tricky one, I hadn’t thought of that. Unless they put it in writing that they are paying £x amount extra per month and it sits in the account ready to be used for the rent, and is then transferred over to the Landlord in December? That’s not a deposit, and it isnt a higher rent, surely it is just rent paid in advance?
That is correct. It’s not a fee. It’s not a deposit. It’s rent. Rent CAN be paid in advance.
Scary how little knowledge some people have in their alleged field of expertise. This is exactly what worries me about agents.
Is it now, try telling that to the regulators. Do you know the new rules on rent, fees and deposits?
LAW new tenancies from 1st June 2019 England:
You can’t ask a tenant to pay an unusual figure for the rent for any month(s) of the tenancy.
You guys clearly do not have an idea what you are doing.
And next time you try and slag off an industry that you want to move into, don’t stand in a glass house.
Shocking statement: “Scary how little knowledge some people have in their alleged field of expertise. This is exactly what worries me about agents”.
Each request you make for a prohibited payment is a breach of the legislation.
A breach will usually be a civil offence with a financial penalty of up to £5,000. If a further breach is committed within 5 years of the imposition of a financial penalty or conviction for a previous breach this will be a criminal offence. The penalty for the criminal offence, which is a banning order offence under the Housing and Planning Act 2016, is an unlimited fine.
Where an offence is committed, local authorities may impose a financial penalty of up to £30,000 as an alternative to prosecution. In such a case, local authorities will have discretion whether to prosecute or impose a financial penalty. Where a financial penalty is imposed this does not amount to a criminal conviction.
A breach of the requirement to repay the holding deposit is a civil offence and will be subject to a financial penalty of up to £5,000.
You will not be able to serve a section 21 notice until any unlawfully charged fees have been repaid.
I suggest you get out of this game now Woodenhead (apt name) given you haven’t a clue about rules and regs and the law and clearly sharing false information.
I need say no more. You’re making yourself look idiotic enough now.
Get educated.
Well considering this from the regulations ….. now who is clueless! Scarey for landlords that could end up with fines. As usual throw more mud.
Tenants Fee Act 2019:
if the amount of rent payable in respect of any relevant period (“P1”) is more than the amount of rent payable in respect of any later relevant period (“P2”), the additional amount payable in respect of P1 is a prohibited payment.
And ladies and gentleman with Dee39 pants firmly around his ankles, he disappears into oblivion to lick his wounds. Another armchair expert who was proven wrong and main motivation (if you read his post below) was to “have a go at agents”.
Wrong. Still. And yet again. My comments stand. I don’t need to waste time on an argumentative old man (or troll, whichever you prefer) who can’t understand simple regulative text and continues to humiliate himself all in his own. What a plonker. ♀️
Clients beware!
I’ll wait with baited breath for that apology when the penny finally drops.
Have a look at the demo on Rentora.
They have a lovely section where the Landlord can include various fees for tenants (which they set themselves) HELLOOO could be a fall at the second hurdle as well!!
This is NOT a management service at all. In summary, the statement on their website is that they will collect the rent and “skim 5% off the top”. The word “skim” says all I need to know.
For example,
i own a number of remote “off gas grid” properties.
On a tenant moveing in I always put £500 of oil in the tanks which the tenant then pays for as they use it.
The tool could also be used to send “late rent notice” fees, of upto £25.
With regards to a tenant choosing to pay a month in advance the system clearly records this “as such”, with a full printout of payment history available to both sides for free on request.
As I said, it’s not for everyone,
We hope that Buy To Let Landlords will find comfort in being paid directly with no one sat in the middle holding their money.
As mentioned in the initial article, I’m not an Agent.
Im a landlord and Rentora has absolutely revolutionised both mine and my tenants experience.
The goverment is clearly looking to revolutionise the rental sector, hopefully for the better.
This means that both Agents and Buy to Let Landlords will need to evolve.
Rentora will help the Buy to Let Landlords evolve with the market.
All I would suggest is create a free account and have a play with the systems.
There is no commitment, feel free to leave if it’s not for you.
All the Best
John Wade CEO Rentora
If you are rent collecting, you are restricted to England only. What do you do when licensing arrives in England?
Nope, it’s a fee to a Tenant, you can’t charge it. At all.
Actually you CAN charge late rent fees on rents overdue by 2 weeks. It’s not a massive percentage (currently 3% plus bank of England’s interest rate) but still allowed.
For example,
i own a number of remote “off gas grid” properties.
On a tenant moveing in I always put £500 of oil in the tanks which the tenant then pays for as they use it.
The tool could also be used to send “late rent notice” fees, of upto £25.
With regards to a tenant choosing to pay a month in advance the system clearly records this “as such”, with a full printout of payment history available to both sides for free on request.
As I said, it’s not for everyone,
We hope that Buy To Let Landlords will find comfort in being paid directly with no one sat in the middle holding their money.
As mentioned in the initial article, I’m not an Agent.
Im a landlord and Rentora has absolutely revolutionised both mine and my tenants experience.
The goverment is clearly looking to revolutionise the rental sector, hopefully for the better.
This means that both Agents and Buy to Let Landlords will need to evolve.
Rentora will help the Buy to Let Landlords evolve with the market.
All I would suggest is create a free account and have a play with the systems.
There is no commitment, feel free to leave if it’s not for you.
All the Best
John Wade CEO Rentora
We heard you the first time.
How about addressing the issues raised from the people you attacked.
Hi All,
Rentora is so much more than the article states.
I’m not going to say it’s the be-all and end-all solution to next weeks problem, it’s one of many potential solutions to help people keep hold of their pension plan / income.
It gives tenants ultimate flexibility to budget through each rental month, allowing them to pay small amounts as and when they have free cash useing debit and credit cards, anytime, anywhere on any device.
The software keeps track of this telling the landlord when payment in full is or more importantly isn’t paid.
It has resulted in me now having over 99% of my rents paid in full on time. I had in all honesty never ever had this success rate prior to developing the software.
It even allows tenants to pay difficult months like December off in small amounts through the year, essentially giving them a payment holiday.
Yes all the tools are free to use but more importantly it allows all important documents to be shared with your tenant on the site, meaning less printing and hassle.
We have also paired with Experian for 2 reasons, it gives tenants the nudge they may need to pay on time, but also enables tenants to escape the “Rental Trap” and potentially get a mortgage and home of their own.
Rentora is not an online agent, we are not trying to be, we want Buy to Let landlords to stand the best possible chance of staying in the game.
I genuinely wish you all the best in your chosen path.
Please don’t criticise a new tool you clearly haven’t fully researched.
All The Best
John Wade
CEO RENTORA
John
I understand your comments above. Perhaps you should consider removing the words Property Management from your site and any reference to management fees charged by management agents – There is no direct comparable in service vs fees yet those comparisons are being made by you. You also need to consider the tenants fees section of your site as should an unsuspecting Landlord get caught out by charging say, a late payment fee, I dare say they would look to you for compensation!
“Forget standing orders.”
“Having a standing order or direct debit to pay your rent is nice and all, but they kinda suck,”
“Low quality printed inventories from estate agents are a joke. Rentora’s inventory tool securely stores photos in high quality – backed up with descriptions.”
Spelling mistakes on your website, statements that will contradict the tenancy agreements landlords are uploading by encouraging tenants to pay whenever they please..
Good luck is all I’m going to say, you are going to need it with statements like this on your website.
Dear John,
The comments received above has touched a nerve??
What do you expect, as you are saying we charge 18%, fee, this kind of article should be relegated to the waste bins as you are clearly trying to justify your rentora or what ever you call it.
by the way i charge 10% and still manage to drive a Ferrari
The very first line of todays thread: “A firm launching a service aimed at helping landlords avoid having to use agents, is predicting that lettings firms will charge close to 18% after the fees ban comes in next week”.
Notice the bit about landlords avoid having to use agent!!!!!!!!!!!!!!!!!!!!!!!!
So what you are now saying is you are a tenant fee collection service and data store for self-managing landlords.
If that is the case, why do you say avoid using agents?
Your 5% isn’t a competitive fee, it is average for what an agent on a fee collection only service is already offering and tried to discredit a non-comparable full managing agent service with fees that have not gone up to 18%.
It seems your angle is the credit/debit card payments and as to seeing when rent has or has not been paid …. landlords know that one very quickly. You could come unstuck very quickly if you haven’t done your research on rent collection, that requires now and soon to cover all the UK ……. a managing agent licence and CMP/Redress?????????????????
“When tenants pay online by credit or debit card, we skim a small processing fee of 5%. The rest is paid directly into your bank account”.
My tenants can have December off by paying a higher amount each month. They just set up a higher standing order each month, my system keeps track of the credit, and then when the rent is demanded for December, the credit is used to pay for it! It’s not hard…
But from experience of having Tenants pay in little and often (against my wishes and instructions) the accounting part of it is a nightmare when money is paid straight over to the Landlord when it is recieved!
And seriously, where are these Agents charging 12-18%? I think I need to move there…
As a landlord of 26 years, who ha only used an agent once (for tenant-find), I have a 100% record of being paid rent on time. I leave it up to the tenant whether they pay by standing order, manual electronic payment, cheque or cash (only tenants arriving in the UK on the day their tenancy starts have ever taken this option and only for the first payment).
If you only have 99% payments on time, then I would say you have chosen your tenants poorly.
If you are taking payments towards December’s rent earlier in the year, I hope you are protecting them in a deposit scheme. Johnson v Old is unlikely to apply unless you have a very carefully drafted tenancy agreement so you will be in the territory of cases like Piggot v Slaven.
I trust the 5% is inclusive of VAT? Otherwise looks like a fall at the first hurdle!
Does the 4.1666666’% plus VAT include finding a Tenant? No? Oh.
This is not a letting service by any stretch of imagination at 5%. You are nothing but a call centre. That is not lettings management and a landlord runs the risk of (a) getting a very poor tenant and (b) no supervision during the tenancy. All well and good when you have a good tenant but as any skilled letting agent will tell you, the chasing costs a fortune. Landlords beware of these low cost schemes, you tenant could end up burning you with £k’s because you were under the impression you could save 7% to 10% on a proper management and didn’t get what you were expecting.
There are thousands upon thousands of nightmare tenants circulating around the country, all milking the system and the government seems hell bent on making landlords life even more difficult in weeding them out and then getting them out.
In a nutshell, lettings is very labour and hands on experience.
Some bloke sat in his bedroom with a laptop, why are you even reporting guff like this?
Why does every new venture nowadays open their pitch with a “we are cheaper” pitch?
Concentrate on providing quality service at the correct cost. How can any organisation just guess at the cost of the business operations until they are in it, look at all the online agents that have failed and understand that they fail because they try and fit the service into the fee rather than the fee into the service provided!
I agree – “quality service at the correct cost” which is why agencies fail at the first hurdle. Carrying out a £20 tenant check and charging £150+ for it.
The extortionate pricing of letting agents are the reason they are worried now that fees will be capped. Landlords will now be expected to cough up the shortfall when agencies can no longer rip off the tenants, and they aren’t going to take another hike on the chin when there are other better alternatives.
If you’re confident in your services and prices then surely you have no reason to feel threatened by a piece of free sortware?
…….. letting agents are the reason they are worried now that fees will be capped.
Do you know something we don’t?
Exactly, last I heard Tenants Fees were banned as of next Saturday?
And there is surely no way they can interfere with what Landlords are charged! The Landlord will go to whomever he feels provides the best service at a price he is willing to pay. Wasn’t part of the reason with Tenants fees because they had no choice? If they wanted the house, they had to pay whatever the agent chose?
‘A firm launching a service aimed at helping landlords avoid having to use agents, is predicting that lettings firms will charge close to 18%’
At that point I stopped reading.
…seems more beneficial to tenants…
I don’t need an sms to tell me when my rent is due – I set up alerts on my calendar as soon as a tenant moves in.
Also, I don’t need an alert as to when my gas safety certificate is due – the new app that GasSafe engineers use sends one out to you 2-3 weeks beforehand…
Do I need tenants paying me by card? Frankly, I just need the full rent amount in my account by the due date. Who will pay the card charges if cards are used?
Rentora will charge 5% to collect rent and send reminders. A corporate I sometimes use for Lettings only charges 0% for this – I assume because it needs the cash flow to increase their turnover, which wouldn’t be there if I was paid directly…
Regarding document storage, I pay Apple £0.79 /month for a lorra lorra cloud storage. Further, aren’t there GDPR implications of “sharing inventories” etc.? Even if there weren’t, I don’t like my docs being stored my someone I’m not wedded to for life – divorces are always complicated!
I do love the clean website though 😉
12%? Is that all? Most agents around our area including my good self charge 20-25%.
We also drive Ferrari’s, summer in the Hamptons and winter down in Malibu.
So sick of these parasitic prop tech firms popping up and trying to launch off the back of false statistics and negative tactics against one of the most thankless and competitive industries in the country. I don’t know of one letting agent that is being overpaid in terms of management charges – we earn every penny and have been forced to charge less than were actually worth due to every Tom, Dick and Northwood thinking they can open up and take a slice of the pie. And this coming from market leader for our area.
As for the notion that our landlords are going to be pushed into loss making positions – we already sent our letters out yesterday to our portfolio explaining our shared frustrations and utter dismay with the governments continued appalling attacks on the PRS. We also made sure to let our landlords know that despite our increased costs, they would be as well off if not better off due to a comprehensive review of rents across our portfolio.
Good luck in the future with Rentora, if this is your opening pitch, you’re going to need it.