In 2019, low mortgage rates boosted rental investment. In fact, according to Century 21, more than one out of every four transactions in older property concerned a rental property last year, a 25% increase compared to 2018. The good yields generated by these investments, which vary from 2% to 7% depending on the case, explain this attractiveness.
However, in order to properly estimate this profitability, it is necessary to anticipate and calculate all the costs related to the property, such as management fees. Entrusting management to an agency has a number of advantages, particularly if you have made your rental investment in another city for reasons of profitability. Update on rental management.
Why entrust the rental management of your property to an estate agency?
Optimise the time spent on management
Renting an apartment or house can be very time consuming. Determining the amount of rent, making visits, drawing up the inventory of fixtures for entry or exit, drafting the lease and receipts…all this takes time and requires a certain amount of expertise. Therefore, by calling on a professional in the sector you will benefit from sound advice. The latter is present at all stages to help you make the right choices and is the sole contact of your tenant(s) in the event of an emergency (water damage, loss of keys, etc.) requiring urgent intervention. It therefore limits exchanges with your tenant and guarantees you peace of mind.
Ensure the solvency of the tenant and limit vacancies
Estate agencies generally carry out an initial filter on the files received by checking the veracity of the supporting documents and any inconsistencies they may contain. By selecting the most solid files, they present you with the most serious profiles and limit the regular changes of tenants over time.
Moreover, in the event that your tenant terminates his lease, the vacancy risk is lower than if you had to manage the replacement of the new occupant by yourself. In fact, many estate agencies advertise on paid platforms (such as Seloger, Bien Ici, etc.) well known to the general public.
Benefit from an unpaid rent guarantee
Very often, estate agencies will offer you a rental risk guarantee to cover you against unpaid rent from €70,000 to €90,000, and any damage committed by the tenant up to €10,000 to €15,000 (including legal protection costs).
However, a few conditions must be met in order to be able to access this type of guarantee (amount of rent less than €2,000 and less than 50% of the tenant’s income, etc.)
What is the cost of the rental management fees?
Rental management fees are freely set by agencies, but on average they represent 4 to 8% of the rent including tax.
As a landlord you will have to pay three types of fees:
– Management fees on rents, which represent 5 to 7% of the amount of collections excluding taxes
– The costs of setting up the tenant (drafting of the lease, administrative costs, etc.) from €8 to €12/m²
– The costs related to the inventory of fixtures for a new tenant, which are capped and equivalent to 3 euros including tax/m² of living space
Our advice: compare two or three estate agencies to make your choice, as prices can vary from one to twice as much, and check the services included in the contract (some contracts do not include the search for new tenants).