Choosing a letting agent: what to check and what to pay for
A letting agent's value is in what they do when something goes wrong, which is not visible when you choose them.
Letting agents offer a range of service levels, and the fee difference between them is smaller than the difference in what they do. Choosing on price alone usually means discovering the gap at the moment you need help.
The three levels are let-only, rent collection, and full management. The middle option is frequently the worst value, because the agent collects the rent but the landlord still handles the maintenance calls and the compliance obligations.
What a good managing agent does
The value of management is concentrated in the difficult moments, which is why it is hard to assess at the point of instruction.
- Screens and references tenants properly, and applies consistent criteria
- Handles maintenance calls, including out of hours, and has a panel of reliable contractors
- Manages the compliance calendar: gas safety, EICR, alarms, licensing, deposit protection
- Conducts periodic inspections and reports with photographs
- Handles rent arrears promptly and starts the legal process when needed
- Manages the deposit and the check-out fairly, reducing disputes
- Knows the local market and can advise on rent and on presentation
The questions worth asking
The answers reveal more than the marketing material, and a good agent will answer them directly.
- What is included in the fee, and what is charged extra?
- What is the fee for a renewal, and for a tenant find on the same property?
- How many properties do you manage, and how many per property manager?
- What is the process when a tenant stops paying, and do you handle the legal steps?
- Who handles maintenance, and is there a markup on contractor invoices?
- Are you a member of a redress scheme, and is client money protected?
- What is the notice period to leave, and are there exit fees?
Where the cost hides
The headline percentage is rarely the whole cost. Renewal fees, tenant-find fees charged again at each change of tenancy, a markup on contractor invoices, and charges for compliance certificates all add to the total.
The comparison that matters is the total annual cost of ownership under each agent, including the fees and the void periods each achieves. An agent charging half a percent more who lets the property three weeks faster and achieves a higher rent is cheaper, not more expensive.
Common questions
- Is full management worth the extra cost?
- It depends on whether you want to handle maintenance calls, compliance and arrears yourself. Full management typically costs 8% to 12% of rent, against 4% to 6% for let-only. If you value your time and you are not confident on compliance, the extra cost is usually justified. If you have one property and time, let-only can work.
- What fees should I expect from a letting agent?
- Let-only is typically 4% to 6% of the annual rent, rent collection around 6% to 8%, and full management 8% to 12%. Expect additional charges for renewals, tenant find at each change of tenancy, compliance certificates and sometimes a markup on contractor invoices. Ask for the total annual cost rather than the headline percentage.