Why Low-Cost Letting Fees Often Cost Landlords More

Why Do Letting Agent Fees Vary?

Letting agent fees are not arbitrary, they reflect how a business is structured, staffed, and operated, and are often discounted as a means of winning new business. The largest cost for any letting agent is staff salaries, and for good reason. Letting and managing rental properties requires deep knowledge of:

• Scottish tenancy law and landlord obligations
• Health and safety regulations (e.g. EICRs, gas safety, smoke alarms)
• Repair responsibilities and tradespeople coordination
• Conflict resolution and tenant communications

Good agents invest in high-quality, experienced staff to manage these areas. Cheaper agents often don’t - or can’t afford to. Instead, they may centralise processes, break the tenancy cycle into parts, and have less experienced staff handle each stage in isolation, or even from a remote, centralised location.

The Dangers of a Siloed Letting Model

When an agent charges low fees, they usually compensate by increasing the ratio of properties per staff member across their business. This often results in a “siloed” or departmental model where one person deals with viewings, another with move-ins, someone else with maintenance, and another with inspections.

This structure creates several problems:

• No joined-up thinking: Staff only see a slice of the tenancy. Decisions made in one stage don’t account for what’s coming next.
• No single point of accountability: Landlords don’t have a named person who knows their property and tenants intimately.
• Communication gaps: Key details are lost between departments, leading to confusion, delays, and errors.

This approach is cheaper for the agent, but riskier for the landlord.

Why Experienced Staff Matter More Than Ever

The rental market in Scotland has become increasingly complex. From the introduction of the Private Residential Tenancy (PRT) system, to the growing list of compliance requirements, even experienced landlords are finding it harder to keep up.

Agents with higher fees can afford to recruit and retain high-calibre professionals. These individuals aren’t just admin staff, they are trusted advisors who understand the legal, emotional, and financial intricacies of letting a property.

At Rettie, each of our Portfolio Managers looks after around 110 -120 properties and are supported by a dedicated assistant to maintain responsiveness. This structure ensures consistent oversight and accountability, swift issue resolution, and a personal connection that makes landlords feel informed and tenants feel cared for.

The Hidden Costs of Poor Property Management

When landlords choose a low-fee agent, the consequences often show up later, and they can be expensive and stressful. Some of the most common examples include:

• Delayed or missed compliance: Failure to serve prescribed information, renew safety certificates, or register deposits properly can lead to legal action and fines.
• Poor tenant selection: One individual may rush tenant referencing and have less concern about the choice of tenant if it’s another staff member who has to deal with the consequences.
• Ineffective issue resolution: Maintenance delays or miscommunication can damage the landlord–tenant relationship and reduce the lifespan of a tenancy.
• Higher turnover: Poor service causes tenants to leave, increasing void periods and re-letting costs.

In each case, landlords end up paying far more than they saved on fees.

How to Choose a Letting Agent

When selecting a letting agent, landlords should look beyond the price tag. Here are key questions to ask:

• What is the staff-to-property ratio? A lower ratio typically means better service.
• Will I have one point of contact? Continuity matters.
• How experienced is your team? Ask how staff are trained and how long they’ve worked in the sector.
• Do you carry out regular inspections, and who does them? A crucial question for maintaining your property.
• Are all compliance checks proactively managed? A good agent should handle this without being asked.

Don’t Let a Cheap Fee Cost You Peace of Mind

When it comes to letting agents, you get what you pay for. A lower fee may feel like a smart saving in the short term, but over time, poor service, staff turnover, and legal missteps can cost far more.

Landlords who choose agents with strong structures, well-supported staff, and an accountable service model are far more likely to enjoy long-term success, and far fewer headaches!