Property management companies

Key takeaways 

• Letting agents can find tenants and manage the tenancy on behalf of the landlord 

• There are different types of property management companies and lettings agents to choose from, depending on the type of service you need 

• Picking the right letting agent can make a big difference to how smoothly a tenancy goes 

10 tips to find the right letting agent as a landlord

Hiring a letting agent can make life easier for a landlord – but they come at a cost. Read on to find out whether hiring a letting agent is worth it, and how to find the right one. 

1. Service levels 

Letting agents offer various service levels, such as: 

• Tenant find 

• Tenant find and rent collection 

• Full management 

With a tenant-find service the agent will market your property, conduct viewings, check references, prepare the tenancy agreement and collect the deposit. 

Some agents will also offer a rent collection service. 

With full management, the agent will deal with rent collection, deposit protection, missed or late rent, repairs and maintenance, day-to-day tenant issues, and contract renewals. 

2. Letting agent fees 

Costs vary by service level and location, with London typically seeing higher fees. 

The more you want the letting agent to do, the more you will pay. 

For a tenant-find service, expect to pay the equivalent of one month's rent, or a percentage of the contract's value, usually 6-8% 

Tenant find and rent collection services usually cost about 8-12% of the monthly rent. Full management fees usually cost 10-15% of the monthly rent. Longer contracts may offer room for negotiation.  

Make sure you are getting value for money. For example, if you are paying for rent collection, how will the letting agent pursue late rent payments? 

3. Tenant sourcing  

A good letting agent should conduct thorough background checks on potential tenants, including: 

• Credit checks 

• References from previous landlords or employers 

• Right to rent checks to confirm the tenant is legally allowed to rent in the UK 

4. Additional letting agent fees 

Some letting agents charge hidden costs not included in the main fees. There might be extra fees for: 

• Inventories 

• Rent reviews 

• Safety certificates 

• Charges for vacant rooms 

• Check-in fees 

Some contracts might also include a clause that entitles the agent to a cut if the landlord sells the property to a tenant. 

5. Letting agent fees for tenants 

Under the Tenant Fees Act 2019, letting agents and landlords in England are banned from charging tenants certain fees, including viewing fees, referencing fees, and renewal fees. They are usually only allowed to charge tenants the following fees:  

• Rent 

• Deposits 

• Changes to the tenancy  

6. Choosing an agency size 

Small, local agencies offer personalised service and potentially quicker response times.  Larger, national agencies offer extensive resources and bigger marketing budgets.

Larger agencies often have multiple offices, making it easy to find your nearest office by town or postcode. 

If possible, visit the letting agent’s office to get a feel for their operations. Are they well-organised? Do they have a professional setup? 

7. Advertising your property 

Find out how the agent plans to market your property. Do they have a list of tenants waiting for a home? Will they list your property on Zoopla or Rightmove?  

8. Agent reputation 

Ask other landlords in your area if they would recommend – or avoid – any particular agent. Verify the agency's membership of professional bodies such as NALS, RICS, or ARLA, or registration with the Property Ombudsman. 

Check the agent adheres to Client Money Protection (CMP) rules.

This ensures that tenant deposits and rental payments are protected if the agency goes out of business or fails to meet its obligations. 

9. Compare multiple agents 

Get quotes from several agents to compare their services and pricing. However, don’t choose an agent purely based on the lowest fee - consider the overall value and quality of service they offer. If you're not satisfied with the letting agent you chose, you can switch agent.

However, you’ll have to adhere to the notice period, typically two months, though some contracts may may be as long as six months.

10. Assess customer service 

Pay attention to how the agent communicates with you during your first interaction. Are they professional, responsive, and informative? Good communication is vital for a successful working relationship. 

Check the agent's hours of operation and ensure they are available when needed, especially for urgent matters related to tenant issues or property maintenance. 

Pros and cons of using a letting agent 

Protecting your investment

Landlord insurance or rental guarantee insurance can protect landlords against various costs.  These might include: 

• Damage to the property 

• Cover for unoccupied properties 

• Rent guarantee if tenants fail to pay rent 

• Legal expenses for disputes with tenants 

• Home emergency 

Compare landlord insurance 

Being a landlord can be rewarding financially, but only if the numbers add up. Landlords can protect themselves against some unexpected costs by having the right insurance in place. 

Landlord insurance can protect you against unwanted costs, such as accidental or malicious damage, cover for an unoccupied property, or rent guarantee if your tenants fail to keep up with payments. 

Use MoneySuperMarket to compare landlord insurance deals. We can help you find the right cover at a reasonable price, not just the cheapest policy available.