Making a direct comparison between letting through an agent against letting privately is not straightforward as the services between letting agents will vary.
Probably the best way to make a structured comparison is to follow the lettings process.
Valuation and Asking Price
Letting Agents who use the main property portals like Rightmove and Zoopla will have access to historical data accessed by postcode and therefore be able to instantly find what similar properties were valued at. Letting Agents will see 100’s of properties each year and will be experienced at setting rents
Private Landlords will only be able to access live data e.g. currently available properties and if there is nothing available in their area will have no comparables. Private landlords have very little experience of setting rent and may get the price wrong.
Result: Letting Agents are much better positioned to value a property and private landlords may under-price or over-price their property, the former leading to a loss of income and the latter leading to longer void periods and ultimately a loss of income.
Lettings Agents pay substantial monthly subscriptions giving them access to property portals like Rightmove and Zoopla. This will give any property maximum exposure.
Private Landlords can advertise properties on websites like Gumtree but the tenants who tend to apply are of a lower standard to those who apply through Rightmove and often rely on private landlords not carrying out any checks. More recently online agents have appeared that for a small fee will advertise the property on Rightmove and Zoopla.
Result: With the recent introduction of online letting agents then private landlords and letting agents are evenly matched when it comes to marketing a property.
Selecting the right Tenant and Referencing
Letting Agents will carry out accompanied viewings saving landlords time and effort and will have years of experience of judging the character and potential suitability of a tenant. Letting agents will then carry out credit references, employment checks and previous renting checks on tenants. When done properly this is a thorough process although I would not deny there are some agents who choose the first person who comes along with little thought to how the tenancy will be conducted. Often these individuals are on commission, at City Lettings no staff are on commission and we take great pride in getting the right tenant for your property.
Private landlords often go on their gut instinct, they rarely take up references or carry out credit checks although the facilities to do this are readily available to them.
Result: Letting Agents are much less likely to select a bad tenant than a private landlord but this is more because private landlords are not as thorough and don’t always have the time.
Legal Compliance and Contract
Provided you select an ARLA (Association Of Residential Letting Agents) then you can be assured that your agent knows Landlord/Tenant Law inside out and is up to date on all of the current legislation and will use a water-tight contract. A word of warning, you don’t have to have any qualifications to call yourself a letting agent. This is scandalous but true! Therefore choose your agent wisely, check they carry Client Money Bonding and that they have qualifications and are a member of ARLA.
Some private landlords don’t even draft up a contract with the tenant, some don’t have a clue about the current legislation and could not tell you what the law is on gas or electrical safety, what Right To Rent is or what an HMO is. This is even more scary when breaches of these four pieces of legislation are punishable by prison sentences and fines up to £30,000.
Result: Lettings Agents will be much more thorough and knowledgeable than private landlords when it comes to legislation, afterall we live and breath it every working day whereas private landlords have to brush up on it say once every 18 months.
Based upon our experience Letting Agents have a much better record for collecting rent. When you are more thorough in the checks you carry out on potential tenants and you have experience and knowledge of the law on your side then you stand a much better chance of collecting late rent or preventing it in the first place.
Private landlords are less knowledgeable and often have a soft underbelly and will tend to believe the excuses that are wheeled out to them.
Result: Letting Agents win this hands down, private landlords don’t have the experience or knowledge to compete
We could discuss more aspects of letting property, e.g. inspections or end of tenancy check outs, however, the results would be the same, letting agents would win hands down. Put simply you can’t beat knowledge and experience and when you do something as your job and take pride in it then you are thorough.
To make a comparison, I can decorate rooms in my own house but will I ever be as good as a professional decorator……………I rest my case!