Over the last 10 to 15 years, letting agents have faced ongoing changes to legislation, new regulations and red tape. The latest proposed change, the tenant fee ban, has caused quite a stir in the industry and those who had hoped it may fall by the wayside will have been disappointed to see it outlined in the Queen’s speech on 21st June.
It has been estimated that between 10 to 25% of letting agents income could become wiped out if the bill was to be introduced, with ARLA’s Capital Economics Report ‘Letting the market down?’ unveiling that tenant fees currently make up around a fifth of an agent’s income.
So what does it mean for you as a letting agent? We have spoken to fellow letting agents, landlords and industry insiders from across the country, on how they are preparing for the proposed changes and suggestions for sourcing new ways of income. Here’s 5 of our top picks:
1) Create time to attract new customers
Attracting more customers to replace your tenant fee income seems like a no-brainer. Unfortunately for many, marketing your own business is often overlooked when daily operations and property management takes up the majority of letting agents time.
As the old saying goes, time is money – and action may be needed to improve the efficiency of your business. Consider what tools and services are out there right now that you could introduce to make life easier and simpler for you and your team. For instance, implementing an external service that takes away the pain of property maintenance, emergency calls and endless paperwork will free you up some time in order to focus on bringing in new business.
2) Target the ‘right’ customers for you
For most letting agents the ideal customer would be a large portfolio landlord who wants to invest with you, make use of all your services and is in it for the long haul. So what’s the best way to reach these customers?
Market yourself as the local expert and talk to your customers about what matters to them most. Speaking to a former employee of a national landlords association highlighted that keeping up with the latest regulations and obligations can be a worry for landlords, however local issues directly affecting the local property market can be the cause of even more stress.
Although marketing how good you are as an agent is important, investing time to showcase yourself as a local expert is equally as useful when trying to establish new relationships as it creates trust. Networking events, sharing tips on social media, writing a blog post or even writing to your local newspaper are all great ways of sharing local property information and talking to landlords about things they most care about. As a result, you may find more landlords will engage with you and maybe keep you in mind for the next time their tenant hands their notice in.
3) Add extra value to your service offering
One very successful agent told us that the onus was not solely on the amount of landlords you have on your books, but up-selling and cross-selling services were also key to growth.
Introducing new services to your existing offering can provide a great opportunity to add a new source of income. For example, adding a 24/7 service meets the needs of today’s 24-hour culture. The good news is that manning an office 24/7 is not required –more and more agents are looking into how their services can be extended ‘out of hours’. Look at implementing online systems so that you can to be contactable at all times of the day or work with an external partner who has a 24 hour call centre which can sometimes be cheaper and mean landlords and tenants can physically speak with someone if they have an issue when your offices are closed.
Offering new services to your existing landlords, can often be an easier sell as you have already established a trusting relationship. Agents are the experts and if they have the trust of their landlord and can show the added value in investing in the additional services then landlords are willing to part with their money. Rather than simply increasing landlord fees to make up for lost revenue, if you can add services that benefit both you and your clients you are in a position to earn more pounds per deal.
4) The battle of the fees
Almost every landlord we speak to wants the same thing from a letting agent – someone they feel they can trust and who will look after their property as if it’s their own, they very rarely mention landlord fees. Many agents we speak to are looking at rival fees and trying to undercut them, but that isn’t every landlords priority when selecting their agent of choice. So instead of slashing your prices, ensure that your reputation for providing a high quality of service is the deciding factor for new customers, and for those you want to retain.
Take extra steps to add a real premium level of service which benefits the landlord – save them time and money. For example, adding insurance products i.e. emergency property cover, will protect the landlord against unexpected repair bills/costs, and open yourself up to a pool of potential new clients whilst beating off your competition.
5) Make yourself indispensable
Whilst of course, some landlords have the time, knowledge and will to self-manage their properties, the fact of the matter is that letting a property is not as easy as some landlords may think. There are hundreds of laws and regulations when operating in the private rental sector – so use these to your advantage. You are the expert in the room, so make sure your landlord or potential landlord client knows it, so they are happy knowing that their property is best left in your capable hands.
Spire Landlord Solutions specialises in providing 24/7 Home Emergency Insurance for letting agents, housing associations and landlords with multiple properties. For further information on our services and how we can add value to your business click here.