How Lettings Agents Can Attract and Retain Landlords
In light of the recent Coronavirus pandemic, these are uncertain times for everyone – including letting agents.
With a fluctuating economy and market, stricter regulations, and increased online competition, letting agents are struggling to attract and retain landlords.
Research predicts that more bans on letting agent fees are also impacting the business and causing more landlords to sell-up.
Fewer Landlords on the Market
Recent studies show that the number of buy-to-let landlords is on the rise with substantial activity. But despite these promising reports, the supply of properties is on the decline at a rate of nearly 7%.
A higher levy on stamp duties for second homes (put into practice back in 2016), is only part of the supply problem.
Landlords no longer receive the same level of tax relief they once did.
This change came about in 2017. Add regulatory changes to the equation and many landlords are either selling up or increasing rent.
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What Does It Mean for Letting Agents?
With fewer landlords to work with, what does this mean for letting agents? Landlords choosing to remain in the private sector, are facing tighter margins, which is why self-management is still an attractive avenue.
But there’s still hope for letting agents. With so many regulatory changes to keep track of, landlords are being forced to take a more calculated approach to rent their property.
It’s no longer “passive income”. Landlords need a thorough understanding of new regulations and laws and what impacts they have on both themselves and their tenants. A good letting agent can capitalize on landlords who are overwhelmed by these requirements.
Landlords who own only one or two properties are often accidental landlords who have full-time jobs and responsibilities.
They didn’t ask or pursue becoming a landlord – the opportunity just fell in their laps and many aren’t prepared to burden the responsibility.
Did you know that tenants are more likely to sign long term contracts on properties that have fully managed services, like those offered by a professional letting agent?
This means fewer void periods. It also means that tenants deal directly with the agents, reducing the landlord’s daily stress. The more experienced and knowledgeable an agent, the better.
But, with landlords leaving the market in droves, how can letting agents attract new leads and maintain their current ones? Let’s explore some tips for drumming up business as a letting agent and keeping your current clients happy.
How to Attract and Retain Landlords
There are two things to consider as a letting agent in today’s sometimes volatile market — retaining your current landlords and attracting new ones. Here are tips and tricks for achieving both.
1. Understand Who You’re Dealing With
The more you know about the woes and fears of landlords, the better equipped you are to cater to them. Put yourself in their shoes. Why did they decide to become a landlord? Was it on accident? Did they purchase a rental property as a long-term investment? Most landlords share the same common concerns:
- Late rent payments
- Changing regulations and taxes
- Property maintenance and repairs
Take time to get to know the landlords and discuss their concerns and stress. Some landlords aren’t even aware of the newest laws and regulations. Bring them up to speed and explain exactly how you can help them navigate confusing legislation.
Cater to their needs and fears by showing understanding and sympathy. Sell yourself as the solution to their problems.
2. Be Prepared to Field Questions
Your interaction with potential landlords will be a dialogue, not a monologue.
You should be prepared to field common questions from the landlord. Before answering them, determine the area you’re working in and what realistic goals are for the specific property and market. Also, consider competitors in the area, how long it’ll take to find a tenant, and potential rental yields.
Here are a few questions you can expect.
- How fast can you rent my property?
- How much rent can you charge?
- Do you have tenants who want to move in now?
- What are your fees?
- What is included in let-only services vs a fully managed agreement?
Of course, landlords can ask a wide range of questions but most are interested in how fast you can rent their property and how much money they’ll bring in.
Disrupting the rental industry are online letting agents. Without the overheads of a high street property, online letting agents have the ability to charge lower letting agent fees to landlords.
Be prepared to fend off questions related to how online letting agents prices are better than yours.
3. Be an Expert in Your Field
This is true for any profession, really. The more you know and the more experience you have, the more attractive you’ll be to prospective clients.
Expertise is equally as important for retaining current clients who want to ensure you’re up-to-date on the most recent market trends and regulations. Subscribe to websites that inform you of exactly what’s happening in the market.
Fill your portfolio with information on properties you currently manage, including rental rates and how quickly you fill vacancies. Offer suggestions on how they can increase their revenue for their specific property.
Advertise locally and become friendly with local publications that highlight you as the go-to letting agent in the area. Network, network, network! Maintain a clean, informative website filled with relevant content.
Educate landlords with free workshops and seminars. Word of mouth is key in the letting agent business and trust us, landlords talk!
4. Stand Out
So, what sets you apart from other letting agents? If you can’t answer that question, you have some work to do. Competition is fierce, which means your management services need to stand out and above the rest. What do your services offer that your competitors don’t? Certain features to highlight include:
- Online access for landlords to keep track of their property
- Routine inspections followed by a detailed report and evidence of the condition of the property
- Offer rental insurance in case the tenant ends up in arrears
- Assign a dedicated account manager
- Ensure quick, reliable payments
- Provide in-depth referencing for tenants that includes follow-ups and staying informed about a tenant’s changing financial situation
- Offer inventory and deposit services following each tenancy
- Provide at least two references or testimonials from other landlords you’ve worked with and allow new clients to contact them if they so choose
Think of every new opportunity as a job interview where you need to “wow” the client.
But don’t forget about checking-in with and still providing impeccable service to your existing clients. They’re your bread and butter!
5. Consider Fully Managed Services
Up until now, have you only dealt with let-only contracts? It may be time to consider a full management option.
Let’s be honest, finding and attracting new landlords is much more difficult than retaining existing ones. Take your current let-only arrangements and turn them into full management ones.
The beauty of upgrading existing landlords is that you already know what makes them tick. You know their pain points. Accidental landlords are infamous for entering into let-only deals.
They weren’t prepared for the responsibility of being a landlord but they don’t want to pay agent fees. That is until they realize that maintaining a full-time job, a family, and landlord obligations are overwhelming.
Appeal to their troubles by showing them how much time and money you can save them. Most accidental landlords are willing to pay an agent to take the stress and responsibility off their plates.
Just be prepared for the increased responsibility that comes from switching from a let-only arrangement to offering fully managed services. Consider staff incentives, commission, and overhead costs.
6. Understand Your Unique Selling Points (USPs)
When it comes to attracting new clients and retaining existing ones, sometimes, you need to show off a little.
When the pressure is on, have a few tricks up your sleeve that includes your unique selling points. Here are a few attractive services and features that landlords look for in a letting agent.
- Extensive knowledge of the area (mention local features)
- The ability to rent quickly and to reliable tenants
- Detail how short your average void periods are
- Explain what type of insurances you carry
- Provide a breakdown of all the services you offer while also highlighting your low fees
- Share knowledge about competitors and why you’re better
- Inform landlords that there are currently more than 150 regulations in place for renting a property and how your fees are minimal compared to penalties for noncompliance
- Reassure them that you perform routine inspections to ensure the property is being well-maintained
- Remind them that repairs and disputes are your responsibility, not theirs
Always be prepared to talk yourself up without coming off as overly confident or arrogant.
7. Communication is Key
This is true for any relationship, but it applies here too. Landlords, property managers and letting agents are now required to be more professional than ever before. They also have more legal responsibility.
Without strong lines of communication between letting agents and landlords, important details can fall through the cracks, leading to penalties and lost income.
Lack of communication is one of the most common complaints made by landlords regarding letting agents. Be different! Be attentive. Don’t start out fully-involved and then let the communication chain break once the contracts are signed.
Communicate any issues directly to the landlord and keep them informed of any changes to the property or tenancy agreement.