So you’re looking for an online letting agent? The number of online letting agents is growing year on year.
The cheaper letting fees are no doubt an attraction for many landlords.
If you’ve decided an online letting agent is best for you, then comparing fees, performance & services is essential to get the best deal.
Increasing the attractiveness of online letting agents, is the number of add on services on offer. The number of add on services across online agents, means their services start to mimic traditional agents (at a better price).
Continue reading below to learn all about online letting agents, see which is the best and get an idea about costs.
Alongside our fee information, we’ve also put together a fee table, we also have a letting agent comparison tool. This helps you compare not only online letting agents, but also high street/traditional agents.
1. COMPARE ONLINE LETTING AGENTS
To get a full comparison of letting agent fees, you can use our search facility below by entering your postcode.
After entering some details about the property, we’ll show you fees & ratings of letting agents in your area plus online agents. The service is 100% free.
2. CALCULATOR FOR ONLINE LETTING AGENT FEES
Using the calculator below, enter your estimated rental income.
Once you’ve done that, you can switch the calculator between the service level you’re looking for: whether wimple tenant find services or full property management.
Using the drop down menu, select an online letting agent of your choice.
The calculator will then work out the price for that service. In addition, the online letting agent calculator will show you your expected yearly rental income, after subtracting letting fees.
If you’re undecided on whether to go for an online or traditional agent, you can compare both using Rentround. Using our letting agent fee comparison tool, you can quickly see letting agent fees & ratings. The service is completely free for landlords.
3. ONLINE LETTING AGENT BIG PLAYERS & THEIR FEES
If you’re unsure on your estimate rent or looking for a quick overview of online letting agent fees, then the below table will be of use to you. Where an agent charges different prices for London vs the rest of the country, we’ve referenced the higher amount.
Online letting agent
The most expensive online letting agent. However the package includes viewings.
Rent Collection Type Services: £145pcm + £950 one off fee
Fully Managed is priced at 9.2% pcm + £850 (one off fee)
No frills service, landlord does the viewings
Rent Collection Type Services: £149pcm + £950 one off fee
Fully Managed: £5%pcm + £99 (one off fee)
Vey basic services for £49.
Upgrade available that includes referencing for £99
The bare basics offered under this package
Fee includes 3 months advertising to find a tenant on the biggest portals
Fully Managed not on offer.
Rent collection Type Services: £49pcm + £49 one off fee
Fully managed will cost you £99 + £49 one off fee
Rent collection offered as part of the fully managed service.
Fully managed fee is 6% of rental income pcm
You save £50 if you select the tenant find option with just 1 reference
Fully Managed is based on £85 pcm, one of the cheapest
Fee includes tenant screening.
Fully Managed £45 pcm
Free full tenant screening and advertising when you select a management pack.
Full management 7% with no signup.
EVERYTHING YOU NEED TO KNOW ABOUT THE MOST POPULAR ONLINE LETTING AGENTS
Before choosing an online letting agent it’s important to check out their credentials. That’s why we’ve created a breakdown of some of the most popular online agents, including when they were founded, recent history, and other details including fees and any recent news appearances.
Once you decide on hiring an online letting agent is, it’s just a matter of choosing the best one for your needs and budget.
To help you with these, we’ve compiled a list of some of the best letting agents in the market today. Keep reading to discover their services, benefits, fees, and much more!
OpenRent was founded in 2012 and quickly became one of the fastest-growing and highly-qualified online letting agent companies in the industry. Features on The Sun, The Telegraph, Mirror, and BBC (just to name a few), OpenRent is committed to helping landlords succeed.
If you choose to work with OpenRent, you’ll receive top-notch service including advertisements on their website, as well as on popular portals like Zoopla. OpenRent also helps landlords draft and implement tenancy agreements. Landlords aren’t the only ones who can benefit from working with OpenRent.
OpenRent also caters to tenants. Their mission is to match reliable tenants with quality landlords to help create a secure and positive working relationship and long-lasting rental agreements.
While there are letting agent fees for these services, OpenRent is transparent about what they offer and at what cost. There are no hidden fees or surprises. OpenRent helps landlords navigate advertising, referencing tenants, and drafting a tenancy agreement. These are all skills the landlord can utilize well into the future.
OpenRent offers tenants filters and search tools to find the ideal property for their location, needs, and budget. This includes properties that accept pets and cater to larger groups or students. Renters also avoid the headaches that accompany additional tenant fees and pushy or overbearing agents.
As of this writing, OpenRent has over 428,000 properties listed with over 2.3 million landlords and tenants registered on the site. Are you a renter who needs to find a property ASAP or a landlord in desperate need of filling a vacancy? With an average turnaround time of 6 days, OpenRent makes finding the perfect property or renter easy and stress-free.
Are you a self-managed landlord looking for a personal rental experience? Look no further than LettingaProperty.com This online letting agency is devoted to creating an interactive, modern rental experience for both renters and landlords. The online tools and resources help you to understand and manage the rental process with ease and convenience.
With years of experience, LettingaProperty.com has been a leading name in the industry since 2008. Their reputation was earned through various awards including the Landlord Buy to Let Award for Best Website, Property Website of the Year by GoodWebGuide, and top marks in the Property Ombudsman survey. Over 98% of LettingaProperty.com clients report they’d recommend their services to friends and colleagues.
LettingaProperty.com prides itself on providing a positive experience for both tenants and landlords. A proud partner with The UK Association of Letting Agents, Safe Agent, National Landlords Association, and the Property Ombudsman, when you work with LettingaProperty.com, you’re also getting access to a wide range of industry professionals.
Services for landlords including rent protection, guaranteed rent collection, property management, and legal cover. LettingaProperty.com also works in close partnership with Rightmove, Zoopla, and 100 other partner sites. This means more widespread and visible advertising opportunities.
Renters love the website’s property search tool which gives you access to the most recent and sought-after listings that match your needs, budget, and other specifications.
Purplebricks Estate Agents
In light of the recent Coronavirus pandemic guidelines and restrictions, Purplebricks Estate Agents put customer health and safety first. With virtual viewings, free valuations, and access to useful online tools like Zoom and WhatsApp, this online letting agency is quickly becoming the preferred platform for safe, government-approved interactions.
But that doesn’t mean those who prefer an in-person experience have to miss out. Purplebricks’ experienced professionals are happy to accommodate an in-person meeting using social distancing best practices. This is why Purplebricks is named as the leading name in hybrid estate agents.
Not only will you receive a comprehensive valuation report but also detailed instructions on how to properly list your property to achieve the most visibility and fast results. Purplebricks helps landlords create a unique advertisement and support with listing management to help attract renters and close deals fast.
In addition to safety, Purplebricks Estate Agents employ local experts who charge reasonable fees for top-notch service. Purplebricks help find renters and let properties but also buy and sell rental properties fast and efficiently.
Other perks for using Purplebricks Estate Agents includes a free month of services, advertising on Rightmove, hands-on guidance and support, as well as several comprehensive packages to choose from. Landlords can choose the services and fees that work best for their needs and budget. Renters also benefit from getting immediate access to the most recent listings and properties. Tenants also have instant access to expert advice on Purplebrick’s mobile app.
Property investors looking to buy and sell properties are guided through the entire process by local experts that know the market and area first-hand. Online letting agent fees include access to countless photos, floor plans, and advertisements. Investors can also search and book viewings and receive advice and direction from industry experts.
Rentmyhome offers several packages to help both landlords and renters find their perfect match. Rated as the UK’s number 1 rated letting agent, Rentmyhome received 4.4 out of 5 stars according to Trustpilot. With various packages and pricing options, Rentmyhome is the ideal online letting agency for finding tenants, offering legal coverage and advice, or providing fully managed services for your properties.
Rentmyhome advertises rental properties on all the top, leading portals including Zoopla and Rightmove, just to name a few. With 24/7 customer service, you’ll never miss a potential viewing. Landlords can schedule meetings at their convenience, with the help of experienced agents. Vetting, referencing, and choosing tenants can be exhausting. Rentmyhome makes the process simple by allowing you to view, reject, or accept offers easily through the website’s online dashboard. Before closing any deals, Rentmyhome will reference all tenants, organize, and draft all necessary paperwork and legal documents to ensure the tenancy agreement is legal and legitimate.
Not only are Rentmyhome’s services extensive and convenient, but they can also save you money and are a fraction of the cost of traditional high-street agent fees. Rentmyhome will take care of the legwork and particulars so you can sit back, relax, and remain in control of your rental properties and financial income. Most landlords are matched with quality tenants within just 7 days and respond to 97% of inquiries with just a single call.
99Home is quickly making a name for itself in the industry as one of the fastest growing online letting agencies in the UK. 99Home prides itself on customer satisfaction and tirelessly working to go above and beyond the basic services offered by most online letting agents. This includes an efficient, seamless, round-the-clock service. 99Home has access to diverse neighbourhoods, which makes them the go-to letting agency for clients of all socioeconomic backgrounds.
Landlords, renters, and property investors can all benefit from the services offered by this up and coming letting agency. Whether you deal in commercial or residential properties, every client receives top-notch service. 99Home is a proud member of The Property Ombudsman Redress Scheme, endorsed by the Office of Fair Trading. 99Home offers ethical, respectful, and professional services and experience to both landlords and tenants.
When it comes to free services, 99Home has you covered. They offer accurate market valuations, advertising on the top property portals including Zoopla, and personalized local and national services. With a variety of packages and services available, landlords of all experience levels can find an affordable bundle to fit their needs.
One way that 99Home delivers incredible results to clients is through impeccable advertising efforts. A professional team of photographers will capture floor plans and properties to attract reputable, reliable tenants. Inventory services and advanced software help guarantee a smooth and efficient management process. Clients are kept abreast of every step of the management process so they feel involved and in control of their properties. 99Home prides itself in keeping clients informed about their legal obligations and recent real estate laws and regulations.
From the initial sign-up to handling inquiries, selecting tenants, and drafting contracts, 99Home guarantees an efficient, pleasurable experience.
The Online Letting Agents
When it comes to good, honest, and just customer service, The Online Letting Agents are some of the best in the industry. With 4.9 out of 5 stars according to Trustpilot, The Online Letting Agents walk you through the rental process from advertising to closing deals and full management services.
Established by a group of frustrated landlords, The Online Letting Agents’ mission was to create an affordable, quality alternative to traditional, expensive, high-street letting agents. The Online Letting Agents pride themselves on offering friendly, enthusiastic, and knowledgeable service delivered by experienced staff. With a wide range of advertising packages, landlords can find reliable tenants with lower costs and fewer hassles.
In addition, The Online Letting Agents offer exceptional customer service and are always available for advice and to handle all inquiries and questions when necessary. Thanks to their impeccable customer service, The Online Letting Agents are always welcoming new, qualified landlords that help maintain their quality reputation and maintain high levels of landlord retention. The Online Letting Agents also offer nationwide services.
Landlords and tenants enjoy a simple process that starts with registration and choosing one of two packages — silver or gold. Next, your property is advertised on all the most popular portals including Zoopla, Rightmove, and Gumtree. The Online Letting Agents handle all inquiries and perform the necessary screenings to ensure tenants fit the proper criteria. Extensive referencing is another service that The Online Letting Agents deliver time and again. The price you pay includes all negotiations along the way and paperwork to guarantee everyone involved is happy.
Clients can also choose from individual services from gas and safety checks to inventory and full management services. The Online Letting Agents’ team of experts provide years of experience and knowledge.
Rioten Property Management
Rioten Property Management is an Online Property Management Agency that was opened by a group of people who did not understand the concept of overcharging and extorting Landlords but instead, wanted to work alongside them providing excellent services and catering to their needs.
Rioten provides advertisements on all the major portals including Zoopla, Prime location, Rightmove, OntheMarket and Gumtree. The company’s objective is to consistently provide landlords and tenants with a simple process, with the best value and a first class customer experience, which is done by allocating both parties to one account manager who is familiarised with the property and both landlord and tenant.
The company believes landlords and tenants should not be forced to choose a service they do not need, but instead select a service which they desire by being clear and transparent. Rioten aims to provide a service that is unique and attractive for both landlords and tenants by helping them every step of the way during their time with us.
By making things more direct by allowing tenants and landlords to get a good sense of each other, this is done by allowing landlords to conduct their own viewings which provides both parties with an opportunity to get to know each other so they can both make an informative decision. This opportunity also allows the tenant to ask the relevant questions about the property to someone who has a better understanding of the property itself.
4. ONLINE LETTING AGENTS: THINGS TO KEEP AN EYE ON
Fees & ratings are essential when picking a letting agent, whether online or traditional. Particularly with online letting agents, there are however other factors to consider.
If the main focus is on price, does that impact service? With the increasing amount of competition, are package prices as clear as they should be? Does the landlord have to pick up more duties going with an online agent? We jump into some of these topic areas below.
ONLINE LETTING AGENTS: PRICES & PACKAGES
We love online letting agents. For the right landlord, they can make life easier while saving money & time. But some (not all!) online letting agent packages are so clouded, its difficult to make sense of it all. For example, you see a service and the applicable fee on the online letting agents website.
Then you select that and notice that the basics aren’t covered. You’re then barraged with a host of add on’s essential to letting out your property. There’s a reason for this: People select online letting agents to save money.
Therefore the cheapest agent gets the most attention. For our online letting agent fee calculator, we stripped out all the nonsense.
In our comparison table, we put together a like for like comparison of fees for the standard type of packages online letting agents offer. If there’s a free service that doesn’t cover the basic needs for a landlord, we didn’t consider that for comparison.
If fees for a particular service were too complex to understand, we took that out (you probably don’t want that service if the online letting agent can’t explain the fees clearly!).
Now aside from the above moan, some online letting agents do have amazing sites. These online letting agents clearly display fees and services which made life easier when putting together our online letting agent comparison table.
ONLINE LETTING AGENTS: DUE DILIGENCE
So once you’ve compared online letting agents, you’d have a good understanding about fees. However, we cannot state enough that you must do your own due diligence before selecting your agent. In the small print, there may be certain excluded services that are key for you.
Take tenant referencing as an example. Some agents, for the tenant fee price, state that this service is included. However there may only be one reference undertaken. This may work for some landlords. However landlords that follow a risk adverse approach, may require 2 references.
Another example would be rent collection. Is the chasing and issue of late penalty fines included in the online letting agents service? These tasks can be quite cumbersome and difficult to manage.
AN ONLINE LETTING AGENTS: FINANCIAL STABILITY
Financial stability of an agent provides another risk to landlords. Remember the dot-com bubble in the early 2000’s? People were investing their time and money in various online companies.
At that time it was difficult to determine the Amazons & Googles, vs the companies you won’t now know the names of now. As the online letting agent industry is new, proceed with caution.
If you select one of the smaller online letting agents to manage your property, how do you know they’ll be around in the long term? Even the largest online letting agent Purple Bricks is facing financial scrutiny. Recently UPAD faced stability issues, causing disruption to both landlords & tenants.
CHOOSING AN ONLINE AGENT: WHICH TO GO FOR?
We like LettingaProperty & OpenRent. Their sites are nice, packages are clear and prices are competitive.
Furthermore both are focused on the rental market, as opposed to being also invested in the buy/sell market. With this approach in mind, it’s likely they will improve & grow quicker solely in the rental market.
SHOULD YOU CONSIDER TRADITIONAL AGENTS?
Yes of course. You won’t get anywhere near the savings online letting agents offer, but you may get more attention.
For example, Purple Bricks has hundreds of properties nationwide. Your property to them will be a small % of their income. To your local high street, you’ll likely be a bigger fish.
5. Online Letting Agent Duties
Not all online letting agents perform the same jobs for the same price. Things vary depending on the letting agent themselves and what services they offer.
Below you’ll find some of the most common tasks the best letting agents perform to help you manage your rental property with ease.
A. FINDING AND VETTING TENANTS
The bread and butter of an online letting agent’s job description is finding and vetting tenants.
This is arguably the most important task they’ll perform. Not only do they know the best marketing routes but they also manage all online questions, property viewings, and rent valuations.
But their job doesn’t end here. Online letting agents do more than just find tenants. They bring discounts on advertising to the table when they manage multiple properties. They also handle all initial paperwork, vet the tenant’s extensive history, and answer all tenant questions.
So how does an online letting agent find tenants? The most common route that online letting agents take is online portals like Right Move and Zoopla. Thousands of potential renters search these sites for rental properties.
After sorting through a bunch of properties and saving those they like, possible tenants contact the online letting agent for more information.
They may even ask for a showing. The online letting agent will handle all of these arrangements and particulars. Usually, the online property manager or the owner will conduct the viewing. If you’re using an online property manager to conduct viewings, they’ll likely charge an additional fee.
So why can’t private landlords find tenants from Zoopla & Right Move on their own? The pricing structure of these portals doesn’t work for private landlords.
Pricing brackets are based on advertising multiple properties. Most private landlords are only advertising a few properties, making the cost way too high.
Quick Tip for Finding an Online Letting Agent Take a look at a few property listings that online letting agents currently have featured on these portals. Keep your eyes peeled for quality pictures that really showcase the properties well. These online letting agents are more likely to find tenants faster and fill both your property and your wallet.
The biggest stress for most landlords is irresponsible tenants.
Those who don’t pay their rent on time, damage your property, or worst of all, refused to vacate.
Landlords want tenants who stay long term, pay their rent on time, and treat the property as a home. Without experience in the complex tenant screening process, you might end up with a tenant from hell.
Tenant references usually offer red flags for problem renters and an experienced online letting agent can detect them.
Red flags differ from one tenant to the next. When assessing the tenant’s past record and behaviors, there are a few key things to look for. These include (but aren’t limited to):
1. Bad Credit Bad credit is a sure sign that the prospective tenant might be a dud. Check both their credit report and credit score. A bad credit score (anything below 620) is a dealbreaker. This is a good indicator that these renters have no problem skipping out on their financial responsibilities.
2. Low Income Little to no income means it’ll be pretty tough for the tenant to pay their rent on time or at all. Look for a tenant whose monthly income is at least 2 – 3 times the cost of the monthly rent.
3. Criminal History Criminals often lack morals, good judgment, and character. A huge red flag you shouldn’t ignore is a criminal conviction.
4. More Than 3 Convictions in 5 Years If you’re feeling generous and want to give a tenant with a less than stellar background a chance, be smart about it.
Avoid applicants that have more than 3 convictions for anything other than traffic violations. This is a red flag that the individual can’t obey rules and likely won’t obey the parameters of the lease.
5. A Prior Eviction If another landlord had to evict the tenant, chances are they’re not ideal candidates.
Tenants with prior evictions clearly don’t care about ripping you off. Evictions are usually due to a default in payments followed by a refusal to leave. 6. Bad Landlord References Your first mistake is playing too much importance on landlord references.
Surprisingly, many landlords will evict a tenant only to turn around and give them a good referral! In other cases, tenants have friends or family pose as former tenants to give them a glowing review.
Take landlord references into consideration but don’t let it be the determining factor in your decision.
Online letting agents handle all the paperwork and leg work involved in securing a tenant. This includes drawing up the tenancy agreement between you (the landlord) and the tenant.
This document outlines the terms of the agreement, associated fees, the duration of the lease, and other important details. In the event of a dispute, you can refer back to the tenancy agreement for clarification.
Quick Tip for Finding an Online Letting Agent If you’re working with an online letting agent, be sure to check the agreement for renewal fees. Once the tenancy agreement expires, the agent might charge a fee for you and the same tenant to renew the agreement.
B. RENT COLLECTION & DEPOSIT SAFEGUARDING
Collecting rent and holding security deposits is another tedious job that requires impeccable record-keeping and tracking. An online letting agent can perform these jobs on your behalf.
The rent is due every month and while some tenants are religious about paying, you need to stay on top of others. But who has time for that? An online letting agent will make sure your tenants pay on time.
After collecting rent, the agent will automatically transfer the funds into your account. Another bonus to using a letting agent as a middle man is avoiding awkward conversations with tenants over late payments.
After all, you want to maintain a good relationship with your renters. Monthly rent is usually collected using electronic payment, credit cards, or sent to your bank account.
Quick Tip for Finding an Online Letting Agent Most online letting agent fees are based on the amount of the rent. This is calculated by either the amount of rent due or the amount collected. When it’s based on the rent due, you may find yourself at a disadvantage. Even if the tenant doesn’t pay the full amount, the agent fees will be the same. When the fees are based on the collected amount, it’s a guaranteed figure which safeguards you against tenants who don’t pay in full.
It’s in your best interest to collect a security deposit to cover any damages to the property. Safeguarding this deposit is required by law and protects all parties involved.
Online letting agents managing property in England or Wales must protect the deposit with a scheme within 30 days of receiving it. They must also send you any important information about the deposit protection (also known as prescribed information) within 30 days.
C. PROPERTY INSPECTIONS & CERTIFICATIONS
Property inspections are required by law and are crucial for letting property. If they’re not done right, your insurance may be void and you could be facing legal ramifications.
Perform inspections before the property is rented out. Detail the guidelines of the inspection in the tenancy agreement.
The most popular inspections include gas and electric, plumbing, heating, damp and leaks, smoke and CO2, and structural security. Experienced online letting agents know the full list of inspections and are capable of conducting them on your behalf.
D. MAINTENANCE AND REPAIRS
The last thing you want as a landlord is to be woken up in the middle of the night by a tenant complaining that a pipe at your property burst or the A/C is broken.
Now, your weekend is ruined as you scramble to find a contractor to fix the issue.
Online letting agents cover general maintenance repairs and are the first port of call for tenants in case of an emergency. If accidents or issues pose any danger to the tenants or the property, they must be fixed immediately. You don’t want your tenants complaining to the council or causing you legal trouble.
Quick Tip for Finding an Online Letting Agent As the landlord, you’re responsible for any maintenance or repair fees associated with the property. Keep in mind that some online letting agents will add additional fees for finding and scheduling the contractors. Discuss these potential fees before hiring the agent to avoid paying twice.
E. LEGAL SERVICES & DISPUTES
Online letting agents also provide you with important legal documentation. Many agents have a system in place with legal document templates. They use these templates to create forms for your specific property.
This expedites the process and ensures that you’re covered from any possible disputes.It also prevents delays in letting the property due to legal issues. Hiring your own solicitor will take much longer and be much more expensive.
In the event of a legal dispute, your letting agent will handle all related deposits, unpaid rent, property damage, etc.
F. FULLY MANAGED WITH GUARANTEED RENT
In some cases, the online letting agent fees cover all tasks related to being a landlord. This means the agent will screen tenants, collect rent, draw up rental agreements, and maintain the property.
You hand the keys over to the agent and receive the property back in the same condition you lent it in (minus wear and tear). Just know that when you get this type of service, the online letting agent fees will be higher. Compare letting agent fees for a variety of services by using the Rent Round letting fee comparison tool
With so many tenants falling behind on rent, guaranteed rent sounds pretty good! This unique service ensures that landlords receive their rent regardless of whether or not the tenant pays. In essence, the online letting agent becomes your tenant and then sublets the property out to others.
6. ONLINE LETTING AGENT TENANT FEE BAN
Relationships are complicated. But what most people don’t realize is that this holds true for the tenant-landlord relationship as well. Both parties have something to lose and need protection, which is why there are laws and guidelines in place to provide peace of mind for both renters and property owners.
The Tenant Fee Ban was recently passed to help protect renters from unfair and unreasonable charges and fees put in place by landlords.
Many tenants sign on the dotted line without asking questions about specific charges or upcharges they face later on. Unfortunately, not all online letting agents add these exorbitant fees, which means a few bad apples are ruining the rental experience for both tenants and landlords trying to make a living.
The Tenant Fee Ban applies to both the best online letting agents and those who are conducting unsavory business. These guidelines are designed to protect everyone involved including tenants, agents, and landlords. If you’re curious as to what the Tenant Fee Ban is and how it applies to you, keep reading. We’ll explore when and why the ban was enacted and how to stay compliant.
WHEN DID THE TENANT FEE BAN START?
The Tenant Fee Ban was created and put into practice on 1 June 2019. This legislation made it illegal for online letting agents to unfairly charge tenants for any items not listed in the original tenancy agreement.
This includes administrative fees associated with renewing the agreement or signing a new contract for a new rental property. The ban was put into place on 1 June 2019, which meant that any new contracts signed after this date were subject to its guideline.
Starting 1 June 2020, all other contracts and agreements must also adhere to the Tenant Fee Ban guidelines.
WHAT EXACTLY IS THE TENANT FEE BAN?
So, what exactly is the Tenant Fee Ban and its associated fees? To remain compliant and maintain a good reputation, you need a complete understanding of the laws and guidelines.
As a tenant, knowing the laws also means you aren’t taken advantage of. The simple answer is that after the Tenant Fee Ban ruling was put into place, the only fee landlords can legally charge tenants is rent.
That means no more hidden fees and charges. Landlords can no longer add additional fees following the start of a tenancy agreement. The only exception to this rule is when tenants are charged for other items listed specifically in the contract as approved payments. Here are a few examples of acceptable line items:
- Protected fees for late payments or lost keys and security devices
- Council taxes, utilities, and TV licenses
- Any changes requested by the renter
- Early termination fees when tenants end the contract before it expires
- 5 weeks rent (or 6 weeks for agreements that exceed £50,000 annually) held as a refundable tenancy deposit
- 1 week rent as a refundable deposit
- Repairs and cleaning services if the property has excessive damage or filth
If the monthly rent was £1,000, this is what the extra fees might look like.
- Refundable rent withholding – £1,000
- Refundable deposit – £4,000
- Any tenant requested changes to the agreement – £100
- One week late rent – £25
- Lost key/Security device – Between £10 and £50
If early termination is requested by the tenant, the amount will depend on how much loss the online letting agent will incur.
The Tenant Fee Ban was created to help strengthen trust and communication between landlords and tenants. It may appear that the tenants have the upper hand in this arrangement and you wouldn’t be wrong.
Many landlords and agents are experiencing financial hardships due to this new legislation.
The Tenant Fee ban offers plenty of benefits for renters. New or uninformed tenants often fell victim to scams, upcharges, and hidden fees. Landlords added payments and charges for things like setting up the contract and performing background and credit checks.
Most additional fees were labeled “administrative” with little to no explanation. Online letting agents passed nominal fees onto the tenants without them even realizing it. Tenants were overpaying for months or even years in some cases.
Not only did some landlords take advantage of tenants but before the ban was in place, there were no rules governing how much online letting agents charged or for what. That means that tenants could face a vast difference and fluctuation in payments from one tenancy agreement to another.
THE DOWNSIDE FOR ONLINE LETTING AGENTS
Most people can agree that immoral online letting agents should be stopped. The problem is that not all agents were guilty of overcharging or upcharging tenants. Now, they’re forced to handle the financial burden caused by others.
Both online & traditional agents and landlords are feeling the negative effects of this Ban. It’s predicted that landlords and letting agents could lose between £50 and £160m in income due to the Tenant Fee Ban.
It’s already been said that the purpose of the Ban is to keep online letting agents from passing hidden, unfair fees onto tenants. Here are just some of the fees that landlords and agents were guilty of charging tenants.
- Scheduling viewings/showings
- Fees related to renewing a tenancy or establishing a new one (including inventory checks, credit checks, and referencing)
- Third-party fees
- Check-out fees
For many online letting agents, these fees made up a big portion of their monthly income. Without it, they were forced to pass these charges onto the landlord, who then passed them onto the tenant.
Everyone is trying to recoup their revenue at someone else’s expense. This last piece of the puzzle leads to spikes in rent, which not all tenants can afford. In turn, landlords face longer vacancy periods and even more lost income.
Without steady cash flow, landlords can’t maintain their property or create a safe, welcoming place to live. This is just one more way finding quality tenants in the face of new legislation is proving to be a challenge.
Most landlords hire online letting agents to help simplify the rental process.
Being a online letting agent is a full-time job from referencing prospective tenants to scheduling viewings and performing maintenance and repairs.
Many landlords don’t have the time or the patience, which is why they hire online letting agents. In light of the new Tenant Fee Ban, many landlords are taking on these responsibilities themselves. This may seem like a quick fix now, but in the long run, many landlords pay much more in terms of stress, loss of time, and a compromised quality of life.
The Tenant Fee Ban is just one new piece of legislation. It’s not the first and it definitely won’t be the last.
Are you flirting with the idea of ignoring these new regulations and continuing to charge administrative and additional fees?
This is a bad idea. Not only can you face major fines ranging from £5,000 for the first offence and up to £30,000 for the second, but also jail time and a court appearance.
In addition to the legal trouble you’ll get in, your reputation will also take a major hit.
After two violations in the same calendar year, your name is added to a list of rogue managers, which is basically the end of your real estate career as you know it. The Tenant Fee Ban applies to all online letting agents, regardless of how many rental properties you own or manage.
THE BEST ONLINE LETTING AGENTS FOLLOW THE LAW
Although most online letting agent and tenant relationships are strictly business, there’s a personal element present as well. Online letting agents are responsible for the safety and security of tenants living in their rentals.
Because of this, tenants trust their managers. It’s this trust that is at the root of the Tenant Fee Ban. This legislation was created to help strengthen the bond and trust between tenant and online letting agent.
Online letting agents who don’t follow the rules (both legal and moral), are at risk for both financial fines and a tarnished reputation.
WHAT ONLINE LETTING AGENT FEES ARE BANNED?
The most common online letting agent fees that are no longer permitted include fees for setting up a contract or renewing a tenancy, performing credit checks, performing inventory, third-party checks, and check-out fees.
HOW DO ONLINE LETTING AGENT FEES WORK?
There are 2 types of online letting agent fees – those that are charged to the landlords and those absorbed by the tenant.
Oftentimes landlords hire online letting agents to help maintain the property.
Fees range from percentages of the monthly rent to a fixed amount.
Tenants face different fees which are usually based on any damage at the end of the tenancy agreement, late rent payments, and other overhead expenses.
Many additional tenant fees were banned following the Tenant Fee Ban of 2019.
WHAT FEES CAN ONLINE LETTING AGENTS LEGALLY CHARGE?
Even though many fees are banned, some are still permitted.
These include fees for lost security devices or keys, changes or payments requested by the tenant, utilities, TV license, council taxes, tenant’s request for early termination, refundable tenancy deposits, late rent payments, and cleaning fees for any excessive damage.
HOW TO AVOID ONLINE LETTING AGENT FEES
One way to avoid online letting agent fees is for landlords to perform these tasks themselves.
They can find and vet their own tenants, collect rent, conduct inspections, and complete all necessary maintenance and repairs. Tenants who take care of their property, pay the rent on time, and don’t breech the contract can also avoid unwanted fees.
7. QUESTIONS TO ASK YOUR ONLINE LETTING AGENT
Once you decide to let out your property, the next step is to choose the right online letting agent. Different agents offer different services from fully-managed services to referencing tenants and completing all the necessary paperwork.
But not just any agent will do. You need one with experience and a good reputation. You’ll want to prepare the right questions to ask to see if the agent is going to be a good fit.
Need help brainstorming some ideas? Here are the top questions to ask your online letting agent to ensure they’re a good fit.
WHAT’S YOUR RECORD OF SUCCESS?
A good (or bad) reputation goes a long way. One of the first questions to ask your online letting agent is what their record of success is.
How many properties have they managed and how quickly do they find tenants?
Beware of any letting agents that guarantee a specific turnaround time. Even the best online letting agents can’t guarantee they’ll find you a quality tenant in a certain period of time, but ask, on average, how soon they can fill your vacancy. Don’t be afraid to ask for proof and specific statistics.
Any letting agent can rattle off a ton of statistics without proof to back up their claims.
A reputable letting agent will have no problem showing you their portfolio.
In fact, they’ll be happy to boast about their past success. If possible, talk to previous clients and ask what their experience with the specific letting agent or agency is. Word of mouth is a great way to get insight into an agent’s experience and track record.
But remember, just because a letting agent has managed hundreds of properties doesn’t mean they’ve managed them well. Make sure the agent you hire isn’t overloaded or spread too thin or it’ll reflect in their service (or lack of).
Longevity and experience are two key things to look for in a successful letting agent. Find out what they know about the local market and what training and credentials they have. If you’re using an agency, ask if you’ll be working with the same letting agent for the duration of the tenancy agreement.
You want consistent contact with the same agent. That way, they know the tenants, the parameters of the agreement, and your personality. Switching agents mid-stream or flip-flopping from one to another is not only stressful but leads to careless errors and miscommunication.
Also, ask the agent what their plans are for the future. Do they plan to stay with the agency long-term? What are their working hours and do they have an office space? All of these factors impact their availability and your future interactions.
HOW MUCH MONTHLY RENT CAN I CHARGE?
Let’s face it. You’re letting out your property to make money. An important question to ask the letting agent you hire is how much rent your property will bring in. Ask for a valuation of the property’s rental potential.
Once they give you a number, ask them what it’s based on.
Things like location, the size of the property, and the local real estate market all play a role in rental amounts. Reputable letting agents will provide comparisons to other properties in the area similar to yours and what they’re valued at. This helps you see, in black and white, why your property is worth what the agent suggests.
Don’t get defensive if the agent comes back with a figure much lower than you expected. Instead, ask them to show and explain why they’re valuation is so low. Experienced agents have insight about the local market and should have no problem explaining their valuation.
Remember, even a low monthly rent is better than no rent at all. If the agent can’t provide this information, there’s likely a reason and you should probably move on.
WHAT ORGANIZATIONS ARE YOU A PART OF?
You’re not just hiring the letting agent but also the professionals they’re associated with. Be sure to ask the letting agent what organizations they’re a part of and what other professionals they work with.
Find out if the agent is registered with the Association of Letting Agents (ARLA), the National Association of Estate Agents (NAEA), or the Royal Institution of Chartered Surveyors (RICS). Similar to licensed contractors and local officials, the letting agent you choose should be back by one of these professional bodies.
Ask the agent if they have specific contractors, inspectors, and solicitors they work with. While you’re not obligated to use these individuals, having a recommendation can be helpful. Just be sure to check any hidden fees associated with using the agent’s recommendation.
In some cases, they receive a kick-back which is their incentive for referring clients. They might be suggesting certain professionals for their own benefit, not yours.
WHAT SPECIFIC SERVICES DO YOU OFFER?
You need to know what you’re hiring the letting agent for, which is why one of the most important questions to ask your online letting agent is, “What services do you offer?” Most agents offer everything from fully-managed services and property management to individual services like tenant referencing and rent collection. A few common services to inquire about include paperwork, repairs and maintenance, and inventory checks.
Ask the letting agent if their fees include all rent-related paperwork. This includes tenant referencing, credit checks, and drafting tenancy agreements.
Your letting agent should also handle any paperwork in the event of an eviction. They should know the necessary steps to take to perform a legal eviction and what both yours’ and the tenants’ legal rights are.
Maintenance and Repairs
Ask the letting agent how often they plan to perform maintenance on your property and what it includes. Do they offer both indoor and outdoor upkeep, as well as structural maintenance?
Repairs, especially emergency ones, must be done within 24-hours. Ask the letting agent if they can uphold this standard. As the landlord, it’s your job to maintain a safe living environment. Emergency repairs are a big part of this equation.
Also ask the letting agent if they’ll be available by phone 24/7 in the event of an emergency. If you’re paying for this service, the last thing you want is your phone ringing at midnight! You’re paying a letting agent to handle these headaches for you.
Inventory checks are especially important if you plan to let a fully furnished property. Either way, ask the letting agent how they perform the inventory checks and what documentation they provide.
Agents should take photographs and make detailed notes about the contents of the property before any tenants move in. This way, if anything is damaged, lost, or stolen, the letting agent can hold the tenant accountable.
This is usually done by deducting the amount from their deposit, if one was taken. Some landlords prefer to hand over all responsibility to the letting agent while others want to be more involved. Determine how little or much you want the agent to do and what it’s worth.
For some landlords, peace of mind, reduced stress, and less hassle is priceless.
WHAT ARE YOUR LETTING AGENT FEES?
Speaking of priceless, how much will hiring a letting agent cost? This is another important question to ask. After all, you’re most likely letting out your property to make a profit.
The letting agent fees you pay will cut into that profit. Ask the agent how much they charge for their services and how they’ll be paid. Some letting agents offer guaranteed rent which means they pay you on time every month, regardless of whether or not the tenant pays on time.
Of course, there’s a fee associated with this. Fully-managed services will cost more than individual services, so be sure to consider this when setting the rental amount and budgeting overhead expenses. Some letting agent fees are a fixed rate while others are a percentage of the monthly rent. Ask for specific figures and amounts prior to entering into an agreement.
WHAT’S YOUR METHOD FOR FINDING RELIABLE TENANTS?
Finding reliable tenants is one of the biggest challenges landlords face and one reason so many hire letting agents for help. But where (and how) do agents find responsible, good tenants?
Ask your letting agent this question. What is their method for finding and vetting quality tenants? Ask them to explain the process to you, as well as what they consider must-have qualities of a good tenant.
These usually include good credit scores, proof of income, and positive reviews from prior landlords. Ask the letting agent if they call previous landlords and what background checks they perform. You also want a letting agent with connections and resources for finding quality tenants. One way to find them is by actively advertising your property. Ask the letting agent how they plan to attract new and interested candidates.
Marketing should be a huge part of your letting agent’s plan.
Ask them how and where they plan to list the property and handle showings. Ask to see photographs of your property and listings once they’re available online.
You can also ask if they have a tenant database and if so, how many people are included on the list. Ask the letting agent how they field inquiries as well.
You may also want to ask what their office hours are. A lot of people work 9-5 jobs Monday through Friday. Letting agents with weekend hours are more likely to attract more tenants.
The same is true for online agents that also have office space. This increases visibility and foot traffic. Lastly, ask which realtor platforms your property will be listed on. The most popular sites include Zoopla and Rightmove.
HOW DO YOU HANDLE LATE PAYMENTS AND EVICTIONS?
If the letting agent you hire will be with you for the long haul and plans to perform rent collection, ask them how they’ll handle late payments. Ask if they offer guaranteed rent.
These tasks are also part of a fully-managed property agreement where the letting agent will perform routine maintenance and repairs, inventory checks, and in the event of non-payment, file for an eviction.
Your letting agent acts as a buffer between you and your tenants, helping sustain a positive relationship. Be sure that the agent’s approach, personality, and demeanor are appropriate since they’re the ones interacting with the tenants directly.
WHAT MONEY PROTECTION SCHEMES DO YOU USE?
A law passed in April of 2019 requires that all letting agents and landlords protect the tenants’ deposit in a government-approved client money protection scheme (CMP). This must be done within 30 days of receiving the money.
In order to stay compliant, ask the letting agent what types of schemes they use and the details of the process. At the end of the day, anything that doesn’t comply with the government guidelines will fall on your shoulders. Make sure the letting agent is handling things by the book.
The government website has a list of approved CMP schemes for the letting agent to reference, but they should know this already! Not only must the deposit be protected in an approved CMP but it also must be displayed on their website and in their office.
Ask the letting agent how and where they hold yours’ and the tenants’ money. Another new rule indicates that letting agents must deposit all money in an FCA-authorized bank where it’s protected by professional indemnity insurance.
THE MORE YOU KNOW, THE BETTER
They say, in life, there are no silly questions. Knowing the right questions to ask your online letting agent helps clear the air before entering into an agreement or signing any long-term contracts.
It also guarantees that you remain compliant and that your property and money is being managed legally.
Get all the information upfront so you can make an educated, researched decision about who you’re trusting your property and money with.
ONLINE LETTING AGENT FAQ
We’ve compiled the list of most common questions related to online letting agents below.
How do I choose a letting agent?
Choosing your letting agent is based on the services you need, the letting agents fees & their past performance. A quick way to search the market is enter your postcode in Rent Round. The platform will then scan the market for you to find a letting agent that suits your needs.
Is OpenRent free?
Advertising on OpenRent is free. However this doesn’t include your property being posted on the major property portals. For that service additional costs will be charged
What percentage do online letting agents take?
The prices differ per agent. Common fees for tenant find services are £100-£400. For fully managed services, the charge structure will be higher and usually involve a % of of the monthly rental income.
How do online letting agents work?
Online letting agents charge lower fees but the expectation is that landlords will do a lot of the work themselves. In exchange for the lowers fees, landlords need to arrange and conduct property viewings. In addition tenancy agreements & handover activities may need to be handled by the landlord themselves.
When should you not pick an online letting agent?
For busy landlords who don’t have much time to get involved in their property, a traditional letting agent is more suitable than an online agent. With an online letting agent, the landlord is required to do more activities, for example conduct property viewings.