The online industry is now developing from its infancy, and the battle between high street and online agents has now been rife for a number of years. High streets across the country remain littered with letting agencies, but what does the future hold for the industry?
Letting out a property can be extremely stressful and expensive. With the pressure of advertising the property, finding the best tenant, signing contracts and collecting rent, landlords are now seeking ways to make the process as painless as possible.
In recent years, the property market has shifted with technology. Now, over 90% of house hunters use the internet to find property; making online advertising the most important resource for securing quality tenants.
As more landlords opt to use online letting agencies to advertise rental properties, StudentTenant.com delves deep into the realms of the high street and online, to find which is better for landlords.
How do online agents differ to high street agents?
For the most part, the services offered by both parties are quite similar. Both offer landlords advertising options to boost their marketability, carry out tenant and guarantor checks and offer additional management services at a cost.
The main difference is that online agents have no brick-and-mortar high street office. All communication and property management is dealt with online or over the phone, meaning lower overheads and lower costs.
Online agents offer landlords greater control over their property; they can create their own property advert, arrange and conduct viewings, and confirm bookings online for free. Alternatively, landlords can create a bespoke management package where the online agent controls things such as rent collection, key management, and dedicated tenant and landlord customer service.
But, which is best? StudentTenant.com oversees a five-round bout between high street letting agents and online letting agents to find the ultimate winner for landlords. Each round is based on the core requirements for landlords; communication, market knowledge, property management, marketing and advertising, and price. Round
Round 1: Communication
High Street Letting Agent
Landlords working with high street agents are constrained to the business hours of the agent. Correspondence between the two is typically between 9am - 5pm, Monday to Saturday, which could be awkward if the landlord is at work.
Online Letting Agent
Anything the landlord requires is accessible online. They can upload their rental property at a time which is convenient to them, manage property viewings at any time, and communicate with the prospective tenants online. Also, the majority of online letting agencies offer the option of live chat support on working days or similar calling times to a high street agent.
Round 1 Winner: Online Letting Agent
Round 2: Market Knowledge
High Street Letting Agent
Local market knowledge is a huge benefit for landlords. High street agents know everything that needs to be known about the market trends, how much rental yield the property could achieve and where the best location for a rental property is.
Online Letting Agent
Online agents have access to rental market data, often have enhanced data tracking tools and market insights providing a large part of the local market information required. Using market trends, landlords can be advised on rental costs and the best locations to invest in rental properties.
Round 2 Winner: Draw
Round 3: Property Management
High Street Letting Agent
A huge benefit for landlords not living near their rental property is using high street agents to show prospective tenants around. It is usually included in the cost of using the agent, often a fixed percentage of the rent.
Online Letting Agent
Using an online agent means that the landlord may need to take a more ‘hands-on’ approach to letting out their property. They would need to make themselves available during weekdays, evenings and weekends to show tenants around the property.
Whilst this does have its drawbacks, a huge benefit is that the landlord will be able to meet their prospective tenants and build a stronger relationship, rather than having unknown people living in their property.
Round 3 Winner: Draw
Round 4: Marketing and Advertising
High Street Letting Agent
High street agents generally use their prominent position in a busy town to advertise properties in street windows, and to encourage walk-ins from passers-by. They will usually use major property portals to list all stock, as well as their own business website to advertise properties. It is quite often the case however, that they do not put a lot of marketing power behind attracting users to their own website, and many do not have a lot of users.
Online Letting Agent
Landlords advertising their property through online letting agents typically have access to their large user base and property advertising portal. These sites are specifically built to encourage users to go online and engage with their own platform.
Furthermore, online agents typically have a huge focus on digital marketing, using their knowledge and expertise to ensure the landlord’s property advert is reaching its online potential. They also often use the major property portals to ensure all bases are covered. In a significantly digital age, these routes do seem to have the edge.
Round 4 Winner: Online Letting Agent
Round 5: Cost
High Street Letting Agent
Advertising through a high street agent does come at a price reflective of the cost of a high street office and other overheads. Typically, the agent will charge both the landlord and tenant fees:
Cost per Landlord
Tenant finding fee of 5% - 15% of the first month’s rent
Property management fee of 17%+ of the monthly rent
Cost per Tenant
Agreement fee: avg. £30
Tenancy reference fee: avg. £30
Inventory fee avg: avg. £50-£300
Administration fee avg: avg. £160
Online Letting Agent
Advertising rental properties through online letting agents are, by and large, much cheaper than traditional high street letting agencies.
Landlord
Fixed tenant finding fee ranging between £0- £150
Fixed property management fee: avg. £40 per tenant, per month
Tenant
Booking, agreement, reference and administration fee: avg. £126.5
Round 5 Winner: Online Letting Agent
Final score: High Street Letting Agent 0 – 3 Online Letting Agent
Should the landlord use an online agent?
If a landlord doesn’t live near the property, is unable to conduct viewings, or would prefer to take an arms-length approach, a traditional high street agency might be for them. However, if they would like to take an active role in their rental portfolio, and want to make significant savings in advertising and renting out the property, then an online letting agent offers the perfect solution.
Comment from Danielle Cullen, Managing Director at StudentTenant.com
“All I keep seeing on popular business networking sites is countless posts from high street agents slamming the big online names. There are obvious differences between the two approaches, and landlords will select what is best for them. Businesses need to play on their own strengths, rather than outlining other businesses weaknesses. It’s like the House of Commons!
Personally all I see in these rants about the online market is a proportion of the industry feeling threatened. It really shouldn’t be about that, or about bad-mouthing your competitors. It should be more about learning from the competition and improving your service, to encourage your customers to continue to use you for years to come.
Many online letting agencies have been operating a very successful and sought after service for several years now, and StudentTenant.com is a fantastic example. We have over 20,000 registered users actively searching for accommodation, and with the added benefit of advertising properties on popular advertising portals, landlords adverts reach a far greater audience than with smaller agents.”