Are Lettings and Sales operations really THAT different?

Are Lettings and Sales operations really THAT different?

So are Lettings and Sales THAT different? Well of course they are, assuming lettings does not involve generating valuation enquiries, winning quality instructions at the right fee, attracting interest in those properties, accurately qualifying prospective applicants, conducting effective viewings, successful negotiation techniques and so forth….hang on…so perhaps they are not so different after all?
Obviously the ongoing responsibilities and client contact where properties are managed do contrast to the “one hit” sale approach, but the “front end” or “sales” element of lettings demands the same disciplines, skills and focus. Too many lettings/property management agents have been reliant on technical knowledge of the legal and administration side of the business, but have sorely lacked a cutting sales edge. With so many new practitioners competing within the lettings/property management marketplace, exceptional sales skills within the process may make the difference between success and failure.
Huge numbers of lettings agents, representing a large majority of those I have spoken to in recent months, have been bemoaning the lack of available stock. We have worked with a number of our client firms to rectify this unsustainable situation. Some have been previously too reliant upon the “churn” of existing stock and maintaining activity levels through relets rather than actually growing the business by way of securing managed deals with new landlords.
Building a database of local landlords is crucial if there is an objective to grow the business. Every landlord dealt with by the company, past and present, whether they did business with your firm or not, should be on that database. Canvassing locally through effective leaflets and targeted letters has proven a useful method for some agents. Research on the internet can help access useful information as to who owns rented property in the area. Arranging, advertising and hosting an investment buyers/landlords information evening is a great way to get your message across to a captive audience. If the lettings agent has an associated sales operation, the list of local landlords can be expanded by accessing the records of any investment buyers who have registered looking to buy over previous years. Even if these customers did not buy from your agency, the chances are that they bought elsewhere and therefore may well still be a current landlord.
A few exceptional lettings agents ensure that all new tenants registering as seeking rental property are asked about their existing accommodation. The tenant often gives the agent the details of their existing landlord, who is instantly added to the database. Some agents incentivise the tenant insofar as if the landlord goes on to become a client, the tenant is rewarded for the provision of the lead.
Populating a landlord database is time-consuming, but will reap rewards once it is in place. Monthly email or snail mail communication should be carried out to update those landlords on market activity and data, changes in legislation, new aspects of your service and, in short, to ensure that those landlords perceive your firm as the most active and knowledgeable in the area.
I initiated a “Top Ten Investment Purchases” feature in our estate agency’s newsletter some years ago. It lists the best ten properties for sale based on rentability and crucially gross annual yield percentage. All this time later, the feature remains the most read element of our monthly newsletter, and prompts contact from interested parties who are current or potential landlord investors. It is a sure-fire winner and one I would strongly recommend!
Many lettings agencies focus on “doing deals” and quick income rather than building their business and protecting their future through increasing the number of managed properties. Some sales agents who jumped on the lettings bandwagon in the midst of the last sales downturn rapidly realised that it was not as easy as they thought; some swiftly leaping back off the bandwagon when sales appeared to pick up again.
Some of those still involved have shied away from management as it is a responsibility deemed to be too much hassle or simply an area that is beyond their sphere of knowledge and experience.
“Let only” deals are all well and good, providing a bit of quick income. In truth, however, the regular income gained from an extensive portfolio of managed properties ought to be regarded as the bedrock of a lettings agent’s operation.
Ultimately, a steadily growing reliable income stream from managed properties provides the stability and profitability that safeguard a business over the longer term. This is an objective that takes time to achieve although the adoption of “best practice” principles will accelerate the process.
One key element to success is to ensure your management service stands out and offers genuine differences from that offered by your competition.
This could include greater frequency and quality of routine inspections, perhaps to include a detailed follow up report with photographic evidence of ongoing condition. Offering online access for landlords to keep up to date with progress on the letting or management of their property has been very well received by clients of firms who have set up such a facility. The assignment of a personal property management specialist to oversee all aspects relating to their property, a robust rent guarantee scheme (with minimal excess and small print!), an organised accounting process that pays the landlord swiftly and accurately, a smooth checkout process that minimises void period, and diligent reliable approved contractors will all prove to be instruction winners.
The other massive differentiator between reasonable and exceptional lettings agents that has been evident on my recent training and consultancy travels, has been the quality of the property valuers/listers themselves.
Exceptional companies ensure that their firm’s representative is sufficiently experienced, knowledgeable and skilled in securing the landlord’s instruction in the face of whatever competition they are up against. We have worked with a vast number of listers and trained them in the disciplines of fulfilling the role of an exceptional lettings instruction specialist.
These individuals are trained to talk a landlord’s language in terms of yields, capital growth, funding, returns and more, so potential experienced clients feel comfortable and confident in giving their business to someone on their wavelength. Equally, the lister can hold the hand of an inexperienced landlord and reassure the client that the potential risks and aggravation of letting a property will be alleviated by instructing the firm in question.
Alongside this flexibility, these valuers are adept at understanding and promoting their company’s USPs and selling the benefits of a managed service over that of let only, thereby not only winning the lion’s share of available new instructions, but winning them on the right terms and fees. Anything short of an exceptional approach in this key part of the process will mean business is lost to the competition, representing an increase in their chances of long term survival and success, at the potential expense of your own.