If you find your own tenants, the biggest cost is your time. You should run full referencing checks for each potential tenant, and other costs might include paying for newspaper or online advertisements. You will also need to make sure that all your legal obligations as a landlord have been fulfilled, such as issuing the tenant with the relevant paperwork, protecting their deposit etc. It’s also important to bear in mind that it is normally a condition of a landlord insurance policy that you fulfil your legal obligations toward your tenant, and failure to do so could invalidate a claim. If you are new to being a landlord it can be useful to use a letting agent as they should be familiar with these responsibilities.
Using a letting agency, on the other hand, costs quite a bit more but does save you time and effort. The cost will vary from agency to agency. However, it’s common to charge a one-off fee of about a month’s rent, or around 8% - 10% of rent for the period of the lease. For this fee the agent will generally prepare particulars, advertise for tenants, conduct viewings, undertake tenant referencing, and prepare the tenancy agreement and associated paperwork.