Why letting agents get stuck at 60-100 properties under management
Many letting agents set out with really good intentions of being the best agent in the town and then at some point become completely stuck. They get overwhelmed by the sheer volume of work that goes into fully compliant back-end property management and client accounting. The workload required to manage the properties under management they have taken on is just too much…
This normally happens around 60-100 properties under management.
At this point they will probably be experiencing a few people in arrears, ongoing maintenance work that needs chasing, a few difficult tenants, and perhaps a difficult landlord or two.
The niggles will be starting to set in, with weaknesses in the management structure starting to show, and keys and contractors causing mayhem too.
The problem is, this is the critical point where they need to scale up and bring in staff, but they don’t have neither the time or the money to do so. This is usually because they have got themselves so wrapped in the back end management and client accounting.
They’ve taken their eye off the ball in relation to marketing and promoting their business to bring in new clients, which means that the income levels have dropped significantly, resulting in further hardship and stress.
A choice to make
At this point the struggling agent has few choices:
- Give up and give in (and many do).
- Stay where they are and remain at the 60-100 level indefinitely.
- Dive back in and go for it.
To push past this level, they will need to re-invest money and time, bring in additional staff, train them and implement systems and processes to guide them in the day job, as well as the checklists and procedures to monitor and progress their new team members.
Unfortunately many misunderstand the levels of complexity within a letting agency business when they first start. They start their business on a budget, meaning they do not invest in the computer systems, software, management tools, paperwork, legal documentation and checklist reports that they need to get the business off on the right footing.
They just recruit some landlords and get going, and a good amount of credit needs to be given to them for that, but you can’t beat high levels of stress and complexity to really dampen even the most motivated individual’s spirits.
This is why it took me 15 years to establish the effective systems in my first branch. It seems a long time, but there is a lot to it whilst you are trying to build a business as well as have a life.
In reality though, what I wished I had done was sought help or bought into a system already established. There was no need to re-invent the wheel; it had already been invented. I could have saved YEARS.
What are these complex issues the new agents face nowadays? Where does the volume come from exactly?
Here are just a few that will be ramping up around the 60-100 mark:
- Tenancy agreement creation
- Check out reports and interim inspection reports,
- Key management
- Contractor management
- Neighbour disputes
- Tenancy renewal negotiations
- Tenant deposit disputes and returns
- rental arrears & collections
- HMO license management criteria
- The councils queries
- The local planning offices
- LHA (local housing allowance) and claims,
- Claw back issues or non-payment,
- Applying for discretionary payments when necessary and rehousing offices
- HMO communal area and property management,
- Inter room tenant dispute
- Fire safety
- Emergency lighting systems
- where cars are parked..
- …and even the odd lightbulb over the stairs.
Let’s not forget that during all this they are also running a business, which needs a high level of time to be spent on marketing, and developing the other systems needed, like management structures, HR aspects, financial management, building and corporate requirements, insurances, wages etc.
So what do they need to do?
In my opinion, get systems in FAST. Buy into a system, join a network, get training, or work with someone that has been there and done it, but get help now. The sooner you do, the quicker the results will be felt.
We run one-day events that help would-be or struggling agents understand everything that they need to move forward and achieve growth, in a safe and compliant environment. You can find out more about these on www.propertyagentscircle.co.uk/intensive
Are you finding that your agency is encountering this same problem? Click HERE to schedule a strategy call with one of our business development experts.