We come across this scenario from time to time so it’s not unusual. In fact, it’s probably one of the smarter investments you can make if you’re not having a property manager watch over your asset.
By using a property manager to place your tenant, you are using a professional third-party resource that will ensure that the quality of your tenant is much greater then what you might have the capability of finding. The reason being is they already have existing prospective tenants in their database, a greater portion of better quality tenants feel more comfortable leasing through an agency rather than direct with the landlord and you will receive a professional opinion to help decide who to choose.
There’s two parts to property management, the leasing and the management. They can be treated as two separate sectors each with their own set of fees. The management fee is the ongoing monthly percentage to take care of your property and the letting fee is the initial fee you pay once a tenant has been placed. This fee is usually in the range of two to three weeks of rent, though when management is not going to be maintained by the agent it could go up a little more.
Once a property is leased out, in most cases, there is no exclusive arrangement between landlord and agent, so technically you can take your property away from the agent immediately without any repercussions. I would only suggest that if you were planning on managing the property yourself from the beginning, ensure that the agent knows what’s coming.
In some cases, landlords don’t advise the agent of the management and choose to surprise them after the property is leased. The biggest problem in doing this, is a large percentage of people who opt to take care of their own properties will pass the management back to the agent once it becomes overly time consuming. I just wouldn’t expect much negotiation on fees and other areas once you’ve played your tricks.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.