On all of my previous characters, I didn't raid villages for a variety of reasons. In the past few days I played my first raiding character, and my conclusion is that almost all of the reasons not to raid are barely valid. In addition to that, raiding proved safer and more profitable than I previously thought. Here I'm going to list my former reasons not to raid and my new perspective on them.
A lot of good companions leave you if you raid
Actually, none of them really care. If you don't mess up in other areas, the only thing that will happen when you raid is that some of them become 'content about your style of leadership' rather than happy. That won't cause any companions to leave you, despite their strong dialogue on the topic.
Raiding gives you an honor/right-to-rule penalty
Only if you don't fight for a faction or if your faction is not at war with the faction you are raiding. If you are a mercenary in service of a faction you can happily raid the enemy's villages. As a Lord or King there's no such penalty either from raiding your official enemies.
Raiding gives you a bad relation with villages from which I may later want to recruit soldiers
Raiding does destroy your relations with the target villages, but in practice you're not going to recruit from all villages in the game. Almost all players have faction commoner troop trees they like and dislike. Don't raid the villages of the factions you like, only target those you dislike. When you have your own faction you'll just give those villages to your vassals should you ever conquer them. Plan beforehand what becomes your personal domain when you're King, and leave those villages alone.
Raiding makes the owner hate you
Indeed. Again, get an idea which Lords you're going to recruit when you're King, you're not going to have all Lords in the game as your vassals. Also, dishonourable Lords are going to hate you no matter what, so their villages are good to go regardless.
You are often caught by enemies when raiding villages
First of all, usually only the Lord owning the village will actively hunt you down because you are raiding. Other enemies only attack if they by chance see you doing it. An exception might be when there is a campaign in progress that isn't doing anything important, then they might seek you out, although I haven't experienced it myself yet. There are a good number of villages in out of the way locations, those are often safe to raid. Especially when the enemy is at war with multiple factions the risk of getting caught is minimal. Try to start raiding at the end of the day, at night enemies don't spot you as often and any Lords coming after you travel slowly. Use strong infantry and archers, since all troops in village raiding battles are dismounted. This gives you an edge over cavalry-focused enemies.
You need a high Looting skill to raid effectively
Raiding is not ineffective without a high Looting skill, although your profit can increase a lot with. Remember that Looting is a Party Skill, so you don't necessarily need to invest in it yourself. Adonja starts with 5 Looting, Sara the Fox with 4. Sara starts with 18 Agility, Adonja with 15, so Sara might be the better choice. If you invest in Looting yourself you get a bonus though (+1 at 2, +2 at 5, +3 at 8 and +4 at 100). If you choose the bottom options at character creation you start with a whopping 6+2 Looting, which can easily get you 8000 denars of profits per village right from the start! Remember that Trade level and Town relations improve selling price, if you take care of both and keep leveling Looting I wouldn't be surprised if you can get 15000-20000 denars from raiding relatively prosperous villages in the later game!
My character is going to be a benevolent King of Pendor, raiding doesn't fit that
This is probably the best reason to refrain from raiding. Raiding is very profitable though, and there can be plenty of excuses. You could go with "the end justifies the means". Some factions, like the D'Shar and the Fierdsvain (I think) have raiding cultures themselves, so essentially you're raiding other raiders. It's not different from killing outlaws, look at it as harsh justice out of necessity. They won't change their ways if you don't show them what it means to be on the receiving end.
My advice to any people starting new characters is to stay in the faction Mercenary stage until you are filthy rich and extremely well equipped. It's by far the most profitable stage, you can switch factions relatively easy, you don't have garrisons to maintain, you get Mercenary wages, you can raid your enemies as much as you want, and in times of peace you just trade and quest!
A lot of good companions leave you if you raid
Actually, none of them really care. If you don't mess up in other areas, the only thing that will happen when you raid is that some of them become 'content about your style of leadership' rather than happy. That won't cause any companions to leave you, despite their strong dialogue on the topic.
Raiding gives you an honor/right-to-rule penalty
Only if you don't fight for a faction or if your faction is not at war with the faction you are raiding. If you are a mercenary in service of a faction you can happily raid the enemy's villages. As a Lord or King there's no such penalty either from raiding your official enemies.
Raiding gives you a bad relation with villages from which I may later want to recruit soldiers
Raiding does destroy your relations with the target villages, but in practice you're not going to recruit from all villages in the game. Almost all players have faction commoner troop trees they like and dislike. Don't raid the villages of the factions you like, only target those you dislike. When you have your own faction you'll just give those villages to your vassals should you ever conquer them. Plan beforehand what becomes your personal domain when you're King, and leave those villages alone.
Raiding makes the owner hate you
Indeed. Again, get an idea which Lords you're going to recruit when you're King, you're not going to have all Lords in the game as your vassals. Also, dishonourable Lords are going to hate you no matter what, so their villages are good to go regardless.
You are often caught by enemies when raiding villages
First of all, usually only the Lord owning the village will actively hunt you down because you are raiding. Other enemies only attack if they by chance see you doing it. An exception might be when there is a campaign in progress that isn't doing anything important, then they might seek you out, although I haven't experienced it myself yet. There are a good number of villages in out of the way locations, those are often safe to raid. Especially when the enemy is at war with multiple factions the risk of getting caught is minimal. Try to start raiding at the end of the day, at night enemies don't spot you as often and any Lords coming after you travel slowly. Use strong infantry and archers, since all troops in village raiding battles are dismounted. This gives you an edge over cavalry-focused enemies.
You need a high Looting skill to raid effectively
Raiding is not ineffective without a high Looting skill, although your profit can increase a lot with. Remember that Looting is a Party Skill, so you don't necessarily need to invest in it yourself. Adonja starts with 5 Looting, Sara the Fox with 4. Sara starts with 18 Agility, Adonja with 15, so Sara might be the better choice. If you invest in Looting yourself you get a bonus though (+1 at 2, +2 at 5, +3 at 8 and +4 at 100). If you choose the bottom options at character creation you start with a whopping 6+2 Looting, which can easily get you 8000 denars of profits per village right from the start! Remember that Trade level and Town relations improve selling price, if you take care of both and keep leveling Looting I wouldn't be surprised if you can get 15000-20000 denars from raiding relatively prosperous villages in the later game!
My character is going to be a benevolent King of Pendor, raiding doesn't fit that
This is probably the best reason to refrain from raiding. Raiding is very profitable though, and there can be plenty of excuses. You could go with "the end justifies the means". Some factions, like the D'Shar and the Fierdsvain (I think) have raiding cultures themselves, so essentially you're raiding other raiders. It's not different from killing outlaws, look at it as harsh justice out of necessity. They won't change their ways if you don't show them what it means to be on the receiving end.
My advice to any people starting new characters is to stay in the faction Mercenary stage until you are filthy rich and extremely well equipped. It's by far the most profitable stage, you can switch factions relatively easy, you don't have garrisons to maintain, you get Mercenary wages, you can raid your enemies as much as you want, and in times of peace you just trade and quest!