Choosing a Letting Agent: Why the Cheapest Fee Often Costs the Most

When landlords start looking for a new letting or managing agent, one question almost always comes up early on: “What’s your management fee?”

In fact, I received an email only this month that said: “I’m looking for a fully managed service and will shop around. I had this at a 10% fee before, so please give your best and final offer for a full managed service.”

It’s a completely reasonable place to start. Property is an investment, costs matter, and no one wants to overpay. But in practice, focusing too heavily on the percentage alone often leads landlords to make decisions that don’t deliver the outcome they were hoping for.

This landlord was a perfect example. The same email also went on to say: “I’ve rented this out very successfully for 12 years, but we had a bit of a nightmare tenant... ...and am looking to instruct a new agency now.”

The reality is this: the true cost of property management isn’t always obvious at the outset. And with the Renters’ Rights Act approaching, the gap between what looks fine on paper and what genuinely protects you as a landlord is becoming more important than ever.

Why Property Management Is No Longer “Straightforward”

On the surface, managing a rental property can appear quite simple. Find a tenant, collect rent, deal with maintenance as and when it arises. When a tenancy runs smoothly, it’s easy to assume that most agents are doing broadly the same job, just charging different fees.

What’s changing, however, is the level of structure now expected behind the scenes.

The Renters’ Rights Act places far greater weight on:

• Clear records and evidence
• Consistent processes
• Documented decision-making
• Demonstrable compliance throughout the tenancy

In other words, it’s no longer enough for things to have been done reasonably. Increasingly, landlords will need to be able to show how and when decisions were made, and why particular actions were taken.

Good management isn’t about firefighting. It’s about having the right systems, checks and documentation in place so that issues are either avoided altogether, or handled in a way that stands up to scrutiny.

Where Fee-Driven Decisions Often Unravel

These are some of the situations we regularly see where management has been chosen primarily on cost:

• Referencing that technically “passes”, but lacks depth, leaving landlords exposed when affordability or suitability is later questioned.
  Only this week, I was approached to act as an expert witness in a professional negligence claim against a letting agent following issues that arose during a tenancy. I had to decline involvement in the defence. Why? The agent had used a £5 referencing provider. In an attempt to keep costs low and margins high, a decision had been made to use one of the cheapest options in the market — a practice I simply cannot stand behind, as it was very likely a contributing factor to the situation.
• Property visits that are inconsistent or poorly recorded, making it difficult to evidence condition or tenant responsibility.
  I regularly come across tick-box inspection reports that offer little meaningful detail. These do not demonstrate ongoing compliance, nor do they provide robust evidence during or at the end of a tenancy as to how a property has been maintained by either the landlord or the tenant.
• Maintenance decisions without a clear paper trail, which can become problematic if timelines or standards are later challenged.
  With Awaab’s Law on the horizon, documenting how damp and mould issues are investigated and addressed will be critical. Recently, we managed a case involving long-standing tenants experiencing mould in an upper-floor bedroom. The landlord inspected, a general contractor attended, a roofer was consulted, and ultimately a damp survey was commissioned. This uncovered multiple issues dating back to the original build, including inadequate ventilation and a poorly installed extractor. Without a clear, documented investigative process, demonstrating reasonable action would have been far more difficult.
• Unexpected add-on fees, triggered for tasks many landlords reasonably assume are part of standard management.
  Do you read 20–30 pages of size-6 font terms and conditions in full? Some are deliberately long and opaque. During my time within a business following a corporate buyout, revised terms included contractor invoice mark-ups of up to 20% and clarified that property visits were not carried out unless specifically instructed — and charged separately. Many landlords later expressed surprise at what wasn’t included, having assumed it would be clearly explained at the outset. Reading legal documentation matters.
• Unclear lines of responsibility, where no single person has oversight of the tenancy history.
  Some agencies centralise management into remote “hubs”, staffed by individuals who have never seen the property. Others outsource inspections or inventories. Without consistent, hands-on oversight, how can fair wear and tear be assessed accurately, or meaningful guidance provided to tenants? This is often where issues fall between the gaps.

Under older frameworks, some of these shortcomings might never have surfaced. Under the Renters’ Rights Act, they are far more likely to matter.

Individually, none of these issues seem dramatic. Taken together, they create uncertainty, risk and avoidable cost.

Why This Is Easy to Overlook

Many landlords come to us after years of positive letting experiences. When things have gone well historically, it’s entirely natural to assume they will continue to do so.

But often it’s only when something goes wrong, a dispute, a complaint, a delayed repair, or a challenged decision, that the importance of process becomes clear.

Legislation is moving in a clear direction: outcomes matter, but evidence matters just as much.

The most effective agents work on the basis that everything they do may one day need to be explained, justified and supported.

A More Useful Question to Ask

Rather than focusing solely on “How much do you charge?”, it’s worth asking:

“What does your management actually include, and how does it protect me?”

That means understanding:

• Who is responsible for managing your property day to day
• How decisions are recorded and confirmed
• How compliance is monitored as legislation evolves
• How issues are identified early, not after they escalate
• How costs are agreed and documented
• What systems are in place if a tenancy doesn’t run smoothly

In many cases, a slightly higher fee reflects a more complete, transparent and defensible service, not unnecessary extras.

A Practical Tool to Help You Compare Agents Properly

To help landlords approach this process with clarity, we’ve created a Landlord Letting Agent Enquiry Checklist.

It’s designed to be used with any agent and focuses on the areas that increasingly determine whether management feels straightforward or becomes problematic, including:

• Scope of service and exclusions
• Communication and record-keeping
• Repairs and contractor oversight
• End-of-tenancy handling
• Compliance, documentation and legislative change

You can download the checklist and use it to structure conversations before making a decision.

Final Thought

Fees are important. They should always be fair, proportionate and clearly explained.

But as regulation tightens, the real cost to landlords increasingly comes from weak processes, unclear responsibility and poor documentation — not from management fees themselves.

Choosing the right agent is about understanding how your property will be managed when things are straightforward, and how well you’re protected when they aren’t.

Taking the time to ask the right questions at the start can make all the difference later on.