Some Property Managers charge a letting fee to new tenants which is part of their income, ergo the more short term tenants they sign up the higher their income. Some may actively select short term tenants because of this.
From the landlords perspective…
Whereas any tenant is probably better than none short term tenants do tend to bring their own problems, apart from the obvious worry of the constant turnover and paperwork, they do not have the incentive to look after your property. A long term tenant however will usually take better care of it as it will be their permanent base. You will also be able to build up more rapport with that person than one who only intends living there for a few months, and be able to sort out any problems they may have as you will have a better understanding with them.
Long Term Tenants – What Will Attract Them?
If you are looking to have more stability in your tenant base by attracting long term tenants, one of the first things which may help is to make sure your agent is not charging letting fees.
The Purpose of Letting Fees
Really the only purpose of a letting fee is to provide income for the Property Manager. With a tenancy of five years against one year the Property Manager is reducing his income to 80% of the amount he could get by reletting annually. An agent charging letting fees can earn as much in four years as one who doesn’t will earn in five years. Therefore it’s possible the agent who does charge a fee will concentrate on getting short term tenants as it will boost his income. Although his income in this area is provided by the tenant, you, as the property owner are the one who will have the possible hassles every new tenant brings. Many Property Managers consider letting fees as part of their base salary and they would expect to obtain these yearly on each property they let.
As a Landlord you should choose a property manager who does not charge letting fees, which will probably give you both a better relationship with him and an investment portfolio which is easier to manage.
