How does an online letting agent differ from a traditional high street agent? This is a question that is being asked more and more as the property industry joins the inevitable drive towards online. Landlords and property investors keen to understand how online letting agents work will find this article useful.
Fees for landlords
High street letting agents usually quote fees as a percentage of rent. Check if the fee is for ‘let only’ or ‘let and managed’. Typically, fees for just finding tenants average around 10%, and 15% if you want the property to be managed as well (source, Primelocation). Make sure you find out what is included, as often agents will not include things like an EPC (Energy Performance Certificate) or inventory in their standard commission rate. VAT is not normally included, so remember to budget an extra 20% on top.
Some online agents charge a percentage fee, like high street letting agents, but typically it’s a lower one as they are able to pass on cost savings from not paying rent on expensive high street shops and furniture.
More commonly, online agents have moved towards a fixed-fee model. Based on the rent you are charging, you can work out how cost-effective this is for you. Essentially this model means you are paying a flat amount for the agent’s service, which won’t go up just because rents go up, and doesn’t cost more if your property is in a more expensive area.
Unlike some online agents (and all high street agents we know of!) we offer a pick and mix option alongside a comprehensive range of packages, so you can choose just the services you need. After all, if you’ve already marketed your property before, you’re unlikely to need a fresh set of photos, a new description, or floorplan – so why not save money each time you let by only paying for the elements you actually need?
Another thing to bear in mind is that all online letting agent prices should be inclusive of VAT (easyProperty’s are), so you won’t find yourself paying an additional 20% on top of the advertised price.
Fees for tenants
Another marked area of difference. For a long time now, traditional agents have been “supplementing” their income by charging a range of fees to tenants – from vague “admin fees” to referencing fees, key money, check-in and check-out fees, plus more on top for renewing a contract. Most online agents (including us here at easyProperty) don’t charge any fees to tenants, with one small exception: Tenant Referencing does incur a £50 fee per adult tenant (far less than most agents regularly charge to both the tenants and landlord). Whatever we do we are transparent about it, so you won’t find yourself suddenly presented with a list of fees when you’ve already committed to renting a property from us.
High street presence vs national reach
High street agents pride themselves on their location – kings of the high street, they tend to have offices in prime locations with plenty of footfall. They advertise their properties for rent in their window, hoping to attract passers-by. This does incur high rents and business rates, which are of course being charged for when you instruct them to help you find tenants. Typically the more upmarket the agent, the plusher the office, with furniture and a fleet of cars to match. They may offer you a fizzy water or a cappuccino if you care to visit. Most high street agencies will conduct viewings for you, but if you prefer to show the property yourself, will allow you to do so.
Online letting agents, by their very nature, don’t have a high street presence. They mostly have a single central offices, to save costs and pass those savings onto their customers – landlords. By contrast, they have a much bigger reach – often nationwide and beyond, so you are able to attract the best tenants, no matter if they happen to be living round the corner or right across the country.
Whilst online letting agents don’t have a local office you can walk into, they are fully available, with extended opening hours by phone, chat or email. Ask yourself if you actually need to meet your agent face to face?
How do online letting agents conduct viewings? They have associates who can conduct viewings for you, but also offer you the chance to save even more money if you can do them yourself. Who better to show someone round than the owner who knows all the ins and outs of the property, as well as the neighbours and the neighbourhood?
What about photos? If you need high quality photos.
Over 90% of home-seekers start their search on the internet, so it makes sense to market your rental property using online methods too.
Check that the agent you choose is actively promoting your property on the biggest property websites – Rightmove, Zoopla and Primelocation.
Most agents have long recognised the move to online for home seekers. Tenants looking for a property are likely to start and finish their search online, and being on the biggest property websites matters. Some high street agents have moved away from either Rightmove or Zoopla in order to save money – they’ve joined On The Market instead, but this has not yet achieved the status of the two big beasts in property, where most people still search. Make sure your letting agent is not using On The Market – what they may not tell you is that if they are, they MUST stop using either Rightmove of Zoopla, thereby cutting your chances of finding the best tenants fast.
Online agents do not use On The Market. Most offer you the chance to list your property for rent on Rightmove and Zoopla (though some charge extra for Rightmove) at a fraction of the cost of using a traditional agent. This is a very cost effective way to get on the portals (they don’t accept private ads, so you can’t advertise directly with Rightmove or Zoopla). Because they are adept at embracing technology, online agents will often have very good websites of their own which are optimised for web traffic and receive large numbers of visitors. They have embraced technology throughout their operation, allowing them to be more efficient and agile at making the most of every opportunity on your behalf.