letting agent owners - help?

[Claire Bear]

my father has set up a letting agent, he has been letting for over 25 years. i have worked in a big name agent for a while and decided to leave to make a go of things.. we offer guaranteed rent scheme but we are struggling to get landlords.. can anyone recommend ways in which we can get our name out there? We thought it would work well, however the office seems to be costing us too much money and theres only so long before you run out!! We have trailor advertising, internet/social networking advertising and our local property paper.... We are based in Blackpool, Lancashire.

[anonymous]

Do you currently have client's and are they happy? If they are, that's good. If they aren't you need to work on improving your service.

At first glance, I think that your problem is too high of overhead for a company just starting off. You have two people to pay (you and your dad), an office, and all the other overhead, which is quite a bit for a company that doesn't have secured clients. It would have been wiser to start slowly. You guys could have worked your old job until you built up a client base. You could have had worked from your home until you had enough clients to support an office. You could have let your business grow by word of mouth and minimal advertising rather than invest in all the hype of paid advertising.

One thing to know about a property management company is that you need many property owners to make a living doing it because most clients that will hire a manager only have a few rental properties. The property owners with many units have in house management. Think about how much you make per unit. It's probably only a couple thousand a year with placement fees and service fees. Now, figure out your overhead cost plus the salary you and your father want/need to make. Divide your overhead & labor costs by the average income per unit. This is how many units you will need to be profitable. This client base will not happen overnight.

So, at this point, look to cut costs. Limit your overhead. If you or your father can work on the side, that will help stop the bleeding. You need a quality product and time to grow. When you invest so much money into the project, you have a very short period of time to develop your business before you go broke.

Go luck and keep your head up.

[thewaythingsare]

you need a reputation. You also need some backup - perhaps join ARLA or one of the other associations? Anyone can set up as an agent so no-one will trust you.

the obvious way is to be cheaper than the others.

[Elmbeard]

I am a landlord trying desperately to get a flat let before the Council Tax punitive surcharges kick in at the start of April. it is in a beautiful historic house perfectly located in Great Malvern within 10 minutes walk of everything, including a main line railway station. It has three large rooms - a bedroom, a kitchen and a 20 foot square drawing room, perfect for entertaining. I've only just redecorated it and replaced all the lights. I bought it for my mother, but she decided she preferred one of the others when it went on the market, leaving me to sort out what to do with the one we already bought.

I approached several estate agents and one independent. At the moment, there's been barely a sniff, but that might be because of the awful weather.

Things that I was looking for were:

- access to suitable prospective tenants. Perhaps the most important, since if nobody visits your website or sees the ad., then how are they going to come? My customers might be local people changing house and wanting a perch - particularly divorced men who have been thrown out of their homes, middle-aged couples downsizing and in between houses, whose families have flown the nest... or they could be retired folk wanting somewhere on the ground floor in a lovely location with nice neighbours and within easy hobbling distance of everything... or they could be rich Londoners or Russians with a provincial retreat easy to get to, yet away from the smoke.

The independent I was put off a little when he said he only advertised online in one place, and he was going on holiday for a while.

Do you know your market, and who are your prospective tenants?

- no nasty surprises in the small print. I was put off one company when I spotted all sorts of surcharges and clauses were I to sell on.

- the prospects for a decent rental rate. My flat is hampered with a hefty £170 / month service charge from the management company. Being an historic building with a huge garden, the bills pile in and have to be met by the landlord. This makes a big dent in the rent. Yet there seems to be a ceiling for 1-bedroomed flats in Malvern of £600 / month, and it is balancing not filling the flat for months in the hope of finding someone who could appreciate its specialness, or taking someone off the street for a lower price and at least getting the Council Tax paid.

What are your negotiating skills compared to the competition?

All the usual bothers as well, where having useful contacts in the building trade are handy. Such as the gas and electric safety checks, cleaning the carpets, and odd repairs that are a nuisance, but have to be done. If you have a tame plumber or gas fitter, that could be a major selling point.

I think you should dispense with the office until you are established. I would worry a bit if an independent has a plush office - is this what my money is going on? If you can keep your overheads down and run it from the garage or spare room, then this can only be good for your business plan when you need to go to the bank for funds to mount an advertising campaign.