Over the last few years, the UK media have spread fear and panic among the renting public, reporting doom and gloom about the state of the property sales market and countless news stories about letting agents closing down, failing their landlord clients and taking hundreds of thousands of pounds of client funds with them.
Reports like these have led the British public to believe that anyone with a passing interest in property or business can set up a property management or lettings agency.
That may or may not hold true, depending on the experience of the individuals concerned, but in reality, what does it take for a property professional to be able to maximise the potential of a rental property business and provide a reliable quality service for their landlord clients and their tenants?
Many self managing property investors and landlords had viewed property management companies and lettings agents as a money grabbing, larger business concern designed to accommodate all sections of society who treated all parties with whom they did business, with equal disdain.
Is this 1970’s Rachmanian stereotype really true? ….. Of course it isn’t!
However, it does take a certain kind of person to make a property lettings business successful?
Among other attributes, a good letting agent needs to be:
- A Good communicator – Must be able to speak to investors and landlords as well as tenants
- Customer orientated –both landlords AND tenants are your customers, so you need to find a happy balance
- Analytical –Especially if you are dealing with the rents
- Systematic – Capable of following systems and dealing with problems
- Sales driven – you need to sell your services to prospective landlords and tenants to generate business.
- Focused – Providing good quality of service requires determination and concentration
- Professional – Every aspect of the business needs to be conducted to protect the clients best interests.
How To Get The Best Out Of The Business
Unless the property rental business is in the fortunate position of being able to employ staff, with the relevant skill sets needed, from day one, then the business owner will need to be master of all of the above skills, or at least be competent, otherwise business will be lost.
When starting any business, the main aims and objectives of the venture need to be clear, including identifying the niche it will operate in. If this is not done, how can the business push forward and in the right direction?
There are thousands of UK letting agents managing Billions of pounds (GBP) worth of property out there, so what separates them?
Why should landlords and property investors choose your letting agency instead of anyone else’s? Are you a HMO specialist, do you manage top end properties? Do you deal with LHA tenants?
New letting agents spring up and disappear again within 6-12 months because the business owners did not know enough about the local property market, the lettings industry in general, the niche market of the area they were operating in or even the demographic of their client base, in other words they did not have enough forethought to be able to survive and profit. In business, failure to plan is planning to fail!
If information and responsibility is not handled correctly, it can be a very steep and expensive learning curve for a new property lettings business, leading to a host of financial and legal issues that interfere with client’s expectations and obligations. Such matters could also force the closure of the business, costing your landlord clients dearly.
Knowledge and experience are the keys to success so business owners need to realise where their knowledge is lacking and plug the gaps with employees or other members of a support network, such as solicitors, insurance brokers, mortgage advisor, builders etc.
Landlords using an ill advised or ill equipped letting agency, (forced to close because they failed to move with the times), risk finding themselves with no tenancy agreements, (AST), no gas certificates (CP12), no rental income, no deposit and no fallback plan. In cases reported by the UK media, some failing letting agents had stopped paying rents to Landlord clients several months prior to closing, meaning that the landlords ended up falling foul of the law and many thousands of pounds out of pocket.
Don’t Let This Happen To You!
To be successful in property lettings, as with any business, you have to have knowledge and experience, not only the practical side of property management but also on the legal side, and keeping up with the latest government legislation, including all welfare reform changes and their impact on landlord clients, can be a minefield at times, but knowledge is power and only the strongest survive.
Letting agents can also get help is by joining the National Approved Letting Scheme (NALS) and/or the Association of Residential Letting Agents (ARLA).
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