When you work in Property Sales, Lettings often feels quite alien and overwhelming in terms of what it takes to broker a new tenancy and set up a viable rental team. Yet the two activities – Sales and Lettings – are so intrinsically linked, it makes sense to offer rental services if you don’t already do so. It can add meaningful additional revenue stream to office revenue. So what’s stopping you?
“I haven’t got a clue when it comes to Lettings”
I hear this all the time, so my mission is to help Sales agents who have been reluctant to start Lettings, to take the bull by the horns and just go for it!
What’s in it for you?
Now is actually a great time to start up Lettings, because it helps manage Sales clients who, for market forces or other reasons, can’t sell or are unable to achieve the price they are seeking or want more flex during uncertain times. It gives your clients more options and retains your connection to them.
Offering both services adds so much value to each and Lettings extends and complements the Sales process.
How do Sales and Lettings work together?
Up until the point of completion and move in, there are many similarities between the two:
Viewings and negotiations are similar, often quicker in Lettings, which means that you can achieve more volume and realise immediate revenue. After all, tenants aren’t necessarily looking at a rental as their permanent home and they are therefore often more open-minded in their property choices.
However, as a purchase completes, a rental just commences and that’s when the client relationship really starts. This is the point at which Sales agents start feeling anxious about Lettings and all those legislative and compliance processes to get their heads around!
Clients seek similar service levels to Sales, and more, and Lettings gives you an opportunity to hold onto a client for longer. The national average tenancy length according to Your Move (October 2020) is 20 months, which means you have that time to nurture that client fully.
The best outcome is when a Lettings client becomes a sale and vice versa.
And yet many Sales agents still don’t do Lettings or plan to set up Lettings anytime soon.
So what’S PUTTING YOU OFF?
1. Compliance Nightmare
It’s true, the legislative and compliance aspects of Lettings are very daunting to anyone who hasn’t gone through their ARLA Propertymark exams and application for membership. It’s reported that there are well over 100 requirements placed on Lettings agents and the list will continue to get longer and longer.
However, it is possible to open Lettings in a Sales-only agency without the intrinsic dread and fear that puts your typical Sales agent right off!
There are some brilliant outsourcing options and support services available to ensure that you’re operating compliantly and in line with ARLA’s best practice recommendations. Their website is a great source of information and a good starting point.
Over time, you can work towards ARLA Propertymark accreditation, which cements your commitment to this activity. There are also many Lettings specialists that can make the processes simpler and less risky. Many of the laborious processes are being cleaned up by various prop tech solutions and there are some great value, quality outsourcing options for the client account process too.
2. Start-up costs and perceived lower fees
Perceived start up costs and the inferior fee levels compared to a typical sales fee can also be seen as a barrier.
Think about how many more Lettings you might do in the time it takes just one sale to complete? And as far as start up costs are concerned, why not re-organise your agency where all negotiators do both Sales and Lettings?
We are gravitating towards this and more and more client of mine are choosing to do just that: All their negotiators now do both. It’s actually quite common practice in independent, local agencies across the country and more in sync with the international real estate model. Clients aren’t asking agents to separate their services, so why do we think we need to?
Many of my daily activities are helping clients set up new Lettings departments and re-organising their teams. It starts very small, but can grow very quickly into a meaningful and reliable income stream.
What better way to retain and better service all your client’s property needs than to offer Sales and Lettings under one roof?
Still not convinced?! If you’re tempted, but still unsure about setting up Lettings, why not call me to talk it through. It would be a shame not to at least consider it.