Online Letting Agents vs. the High Street
Online agents? What are they? Find out the difference between the traditional letting agents and the new kid on the block - online letting agents.
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Letting agents have been around for decades. Whether you’re a student, homeowner, or moving city – agents are used to finding a place to suit tenants and are crucial for putting your property on the market. If your portfolio is expansive and considerable time and energy is needed to maintain and let your properties, it can easily become a full-time job. That’s why choosing the right agent for you is super important. In this article, we will explore the comparison between the traditional high street agencies such as Foxtons and the lesser-known newcomers; online letting agents.
Today, landlords can choose between newer online letting agents and their traditional high street counterparts. Online estate agents are increasingly popular, accounting for almost 8% of exchanges in the second quarter of 2018 according to Property Reporter. Both have their advantages, so we’ll take a look at the differences to help you make a more informed decision.
An overview of what to consider:
There are lots of letting agents on the market – whether it’s online or on the high street. But with so much choice, it can be difficult to pick the right one. You must consider factors like fees, services, performance, and regulatory associations. Sites like Rentround allow landlords to find their ideal letting agent for free. By simply entering your postcode and a few property details, you can compare letting agents in your area. But if you don’t want to rely on a tickbox system, considering certain factors on your own can help.
The Rentround free letting agent comparison tool
Firstly, consider the services on offer and what you’re paying for. Most letting agents offer the following services, whether they are online or on the high street:
Finding tenants – the initial stages of getting someone into your property, which include conducting viewings, tenant referencing, setting up a tenancy agreement, or taking a deposit.
Rent collection – The letting agent collects the rent, manages missed payments, any fines from the deposit and serves eviction notices if applicable.
Fully managed – This is perfect for those who don’t want the hassle of managing their rental property. The agent does everything, from dealing with tenants to organising repairs. This is an appealing option, but bear in mind the landlord is still legally responsible for the property.
Many agencies offer add-on services, such as background checks, running tenant credit, Right to Rent checks, and professional photography.
Online Letting Agents
The main difference between both is that online letting agents are just that – online. With no high street presence, many of their processes are automated instead of manually being undertaken via an individual. Landlords can only communicate with them online or via phone.
Depending on your needs, you can choose a variety of different packages. For some, a basic package to list your property on Rightmove and Zoopla is all you need. This gives you exposure on a platform that millions of tenants use, and it's good to know that upgrades are available should you require further services.
Compare online letting agents
Online letting agents are a new concept so it can be hard to know which one to chose or how to compare them. Often times it's hard to even know if an agent is classified as an 'online' one at all. Luckily, we have written a handy guide for his which you can read in full here. Agencies such as Mashroom and Howsy (and of course Oasis Living) offer a slicker and more transparent service for landlords than the typical high street letting agency. Therefore, it is an attractive alternative for some landlords that are ready to make the jump into the 20th century and start managing their property more effectively.
That being said, old habits die hard and these agencies will jostle for a share of the market for some time until enough landlords decide they need a better system. For now, at least, the high street is the alpha male of the market.
It will be important to do your research thoroughly as some of the online agencies offer cheaper alternatives to the high street. They also have differing business models in some cases. For instance, Mashroom allows you to choose what add-ons you pay for and which you don't and they even help you with remortgaging your buy to let.
But what about the high street letting agents?
You’re probably familiar with the many traditional high street letting agents such as Countrywide, Savills, and Reeds Rains. With a high street presence, you can walk into the agency and chat directly with a live agent. Most towns and cities also have smaller local letting agents. These operate only in that area, such as for local student accommodation lettings.
There’s no doubt that high street letting agents offer unique advantages compared to their online counterparts. For the more traditional, nothing beats interacting with someone consistently in person. Especially when placing your assets in the hands of someone else. But it’s worth taking a closer look at comparing the two before you make a final decision. While using an online letting agent may seem virtually distant, many have their own perks when it comes to fees.
Agencies like Oasis Living for example, offer the best of both worlds. Read on for a quick rundown of the points to consider:
Online agents may offer a range of services – from valuing your home, professional photos, and listing your property. Some will negotiate with tenants on your behalf and arrange viewings – depending on the services you employ. But with no rent to pay or local staff – online letting agencies can afford to charge lower fees.
For example, to manage your property and carry out a range of services, agencies like Oasis Living charge half the fees you’ll find from a high street letting agent. The lower commission doesn’t only affect the landlord, as it also means lower tenant fees are charged. This is significant in attracting tenants to your property. With lower fees overall, the cost of letting and managing your property via a third party is significantly reduced.
If you choose to use the fully managed service from a high street letting agent, expect to pay between 10% and 15% of the monthly rental income (or even more for properties in London.) This cost can significantly eat into your profit margin. For those with only a couple of properties - it's all the more reason to reconsider using a high street agent.
If you wish to retain control of the property, and have time to manage it yourself, then depending on the services you choose, an online letting agency may be the way to go. Likewise, unlike the 9-5 hours of the high street, you can manage your lettings online and all the information you need to hand 24/7. Having a 24-hour phone line means that the agency can help you at any time. Likewise, so can tenants if any issues arise.
Why is this crucial? It's harder to deal with issues that arise if your job means you can’t make telephone calls during the day. And as many have experienced, even if small-town agents claim to be open at set times, they can still shut the shop early on a slow day or take an extended lunch break. In this sense, getting in touch can be harder and sometimes more unreliable.
Online Marketing Magic
Having an online presence is one of the biggest influencers of today when it comes to finding content. Despite not having a physical presence on the high street, agencies are able to advertise the perks of lower fees and other services online and have the expertise of digital marketing at their core. As they are purely online, more funds are directed into ensuring this channel is well-propagated. In the age of technology, house hunters will have browsed the internet. Effective marketing online can be worth more than a storefront in catching a renter's attention.
While established online letting agencies can offer around-the-clock service, you may find yourself dealing with staff that don’t have knowledge of the local area. Thus, they aren’t able to offer expertise in this way. This could affect the effectiveness of the sale – as local knowledge of the area is important for those deciding to invest in a specific location. While tenants can communicate in person and quiz a high street agent who can offer up a wealth of information on the local property rental market, this might not always be the case for some online agencies.
David Blake, Principal Mortgage Adviser at Which? Mortgage Advisers, recommends a cautious approach: “Online agents may struggle to compete with a high-street agent who knows your neighborhood and its property market inside out.” That being said, some do offer support from experienced local property agents. If local expertise is an important aspect to you, be sure to check the agency are able to offer this before choosing to go with them.
High Street Agents Prevail
A HomeOwners Alliance (HOA) report in 2018 found that more than 90% of landlords choose high street agents over the new breed of online rivals. According to HOA however, many sellers risk not doing their research properly and getting a bad deal on the high street. Their website includes a useful free and impartial comparison tool. After entering your basic details and the type of property you wish to sell – it allows you to compare estate agents in your area against certain criteria. This includes factors like which has the best track record for achieving the asking price or the fees they charge.
Which agent is right for you?
These days, there isn't a drastic difference between choosing the high street vs. an online letting agent. Whatever you choose, be it online or the high street, doing your research, understanding what you're paying for, and reading reviews is an absolute must.
With that in mind, here are some other articles to help you get started:
Letting agents are a great aid in keeping your property running and profitable. Although not known very well, online letting agents offer greater value to landlords. With reduced service costs and no commissions, they have turned out as more affordable alternatives to high street agents. Moreover, unlike conventional agents, online letting agents provide landlords more control in their property matters. All this is considered in this digital technology era; an online letting agent is just your real-estate business needs. If you are facing property maintenance issues or looking for a reliable online letting agent then contact us today.
One of our letting experts will ensure you get the most value from your property