It is a common mistake for lettings agencies to focus on doing deals for immediate income rather than increasing their number of managed properties to help build their business for long-term success. Regular income gained from an extensive portfolio of managed properties ought to be regarded as the bedrock of such operations.
A number of estate agents have established a lettings
function to help support an ailing sales business, with many having opted for
the let-only route for the simple fact that a management operation is beyond
their capabilities or means. Others have simply required the quick fix to
income streams that this route can provide.
Building a sound property management business takes time,
though the adoption of best practice principles will accelerate the process.
It is crucial that you can differentiate your management
service from your competitors’ offerings. This could include more frequent and
higher quality routine property inspections, perhaps that include a detailed follow-up
report with photographic evidence of the property’s on-going condition.
Providing landlords with online and real-time information
about their portfolios has also proved popular, as has the assignment of a
dedicated property management specialist to oversee all aspects relating to
their property, a robust rent guarantee scheme, an organised accounting process
that pays landlords swiftly and accurately and a smooth checkout process that
minimises void periods.
Detailed record keeping to prove your successful track
record, in terms of landlord and tenant retention and success stories relating
to resolved disputes, carry considerable weight when pitching for an
instruction, as do testimonials from existing clients.
Having established your clear points of difference, the next
stage is to assess how effectively these are being promoted.
The ability to sell management as a concept to potential
landlords varies massively among the lettings firms for whom we are invited to
carry out consultancy work and training. It is an area that we concentrate on
very early in the business development process and, once the skills and
principles are addressed, firms always see an increase in their number of
managed properties. On average, we have succeeded in increasing some lettings
agents’ managed deals to represent over 90% of their lettings clients business.
It is interesting to ask frontline lettings staff, who are
usually the ones responsible for convincing landlords to opt for a
fully-managed service, to list exactly what the benefits of this service are
and what they mean to clients. There are several benefits that staff regularly
fail to promote.
The obvious benefit that a managed landlord will experience
is the avoidance of hassle relating to issues such as utility provision,
assuming the agent has a 24-hour helpline for tenants to call in the case of
Any landlord hinting that they are intending to self-manage
their property should be asked the best contact number on which their tenants
can reach them at 2am, which tends to make them rethink their decision.
Data that some of my lettings agency clients have shared
with me in recent years show that the average length of a tenancy is greater
for managed properties compared to unmanaged. Furthermore void periods tend to
be shorter, often because a proportion of tenants specifically request to view
only managed properties for the likely ease of problem solving. This may also
account for market evidence that suggests that rents achieved on managed units
compared to unmanaged ones are higher.
It may also be helpful to remind clients about the fact that
they will at some stage be faced with the deposit protection minefield, as well
as taking the correct legal steps to deal with a defaulting tenant.
As a landlord myself, I genuinely believe that opting for a
tenant-find service is a false economy. But it is the job of lettings agents to
persuade landlord clients of this at the outset of their communication and for
their property management departments to convince them that they have made the