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. In truth, the regular income gained from an extensive portfolio of managed properties ought to be regarded as the bedrock of such operations.
Some sales agents have started up a lettings function in recent years to help support an ailing sales business, however many of these have chosen the “let only” route as a management operation is beyond their capabilities or means, or simply because they are looking for a “quick fix” increase in income that “let only” deals can provide.
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, an organised accounting process that pays the landlord swiftly and accurately and a smooth checkout process that minimises void periods will all prove to be instruction winners.
Detailed record keeping to prove your track record on landlord and tenant retention, and success stories of resolved issues, carry considerable weight, as do testimonials from other clients.
Having established your clear USPs, 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 amongst 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, there is always a significant impact on upping the number of managed properties.
It is interesting to ask frontline lettings staff, who are usually the ones responsible for convincing landlords to go for a fully managed service, exactly what the complete range of benefits that management will mean. There are several that staff do not regularly promote.
Aside from the obvious avoidance of hassle that a managed landlord will experience, assuming the agent has a 24 hour helpline for the tenant to call in the case of emergencies, (any landlord hinting that they are intending to self manage should be asked the question “What is the best number for the tenant to reach you on at 1.00 or 2.00am?” – it often makes them think again!) there are clear financial benefits which often slip under the radar.
Data that some of my lettings agent client firms have shared with me in recent years show that the average length of tenancy is greater for managed properties compared to unmanaged. Furthermore, any void periods tend to be shorter, potentially because a proportion of tenants specifically request to view only managed properties for the likely ease of problem-solving, therefore leading to a higher level of interest and demand. This may also account for the fact that there is evidence to suggest that rents achieved on managed units are more favourable compared to unmanaged.
A landlord choosing to self-manage will miss out on such advantages, and later on potentially be forced to negotiate the minefields of appropriate handling/registering of deposits and 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 highly likely to be a false economy. It is the job of the lettings agent to persuade the landlord clients of that at the outset, and for the property management department to convince them that they have made the right choice.