Letting Agent only paid 0.25 times turnover for 75 managed properties (86% less than open market value)
I wanted to share some numbers of one of my clients who has organically grown his lettings portfolio from 150 to 225 managed properties in 24 months. The preceding 2 years before that, he had hardly grown his lettings agency, taking the odd one on but loosing the odd one to accidental landlords selling up.
In those two years, he has spent the following …
- £300 per month in Rightmove Featured Agents Ads
- £75 per week in content writing (articles written by a ghostwriter …. like this )
- £65 per month in graphics work by a graphics designer …. like this
- £200 per month in printing
- £10 per month for a domain name and hosting
- + around 15 minutes a day looking at Rightmove and bit of cut and paste work
- + around 2.5 hours a week doing a bit of social media work using a step by step guide
- + around 3 hours a month visiting (on foot) local solicitors, local accountants etc
If I am being frank, the Rightmove Featured Agent could be dropped if pennies were tight, you would just need to put a bit more effort in the social media and bit more shoe leather
Those 75 managed properties produce £90,000 a year in fee income (he is in the South East and each let earns him £1,200 pa in fees)
The going rate for acquisitions is between 1.5% times turnover and 1.8% times turnover, meaning, if he wanted to buy a competitor out with 75 managed properties, it would have cost him £135,000 and £162,000 (1.5% – 1.8% times turnover) plus all the hassle of swapping over, making people redundant etc etc
Have you got £135/£165k in loose change?
No, neither did he.
Instead, it has cost him £21,600 over those two years ….. and that has been spread over 24 months so it was only costing him £900 a month .. .. and here is the best bit, he has dropped newspaper advertising, saving him £500 a month … which means he is only spending around £400 a month (£900 less £500 savings on newspaper ads)
… and if he didn’t mind a bit of hard work, he could saved himself an additional £300 a month on Rightmove Feature Agent adverts if he didn’t mind a bit work on social media and some shoe leather .. meaning it would only cost him (if he did drop RM ads) £100 a month in additional cost
So what is he doing …
Watch these two short [4mins and 9 mins] videos and they will tell you exactly what you need to do.
He has set himself up as the local property guru, and by myself ghostwriting articles about his local property market each week, then him getting in the newspaper for FREE (the editor rings him up each week asking for the article), some social media work, eshots / bulk emailing his database, and hand delivering the newsletter .. he is seeing the results. I warn you though, he saw no uplift in business for the first 6 to 9 months … the 75 managed properties have only come in the last 15 months or so. If you are looking for instant results, a shortcut .. this isn’t for you .. but if you are in it for the long term … it just might be.
.. and I forgot to tell you there has been a knock benefit for his resi sales department .. in fact this estate agent saw an uplift in his sales pipeline of 113% in a year – watch the 6 min video here
So what is stopping you?
Money … So, yes, it costs money, but most people just moving existing marketing spend to the technique of being the local property guru. Look at those pound note numbers – you don’t necessarily need to spend much more, just spend your marketing budget elsewhere
I don’t know how to do it. I hold his hand all the way, teaching him the technique, guiding him and supporting him. I give him training videos, step by step guides and mentor support. And I will do the same for you.
You might ask, Am I capable? .. if you don’t mind hard work and believe lettings/estate agency is a people business – then yes it will work
You might ask, I can’t write the articles about the local property market – that’s what you can pay me for – that’s the £75 + VAT per week in the costings schedule above
You might say, I want to write the articles myself. Good for you, you don’t need me to do this – and you will save yourself £75 + VAT a week!
You might say I need the uplift now. Well there are no shortcuts in lettings. I 100% guarantee if you do what I show you to do, it will work. You can either live hand to mouth for the next 10 to 20 years, or do something different, prepare the foundations, plant the seeds and just like a farmer, tend your crops and wait
You might say, What if I am challenged about the articles, I don’t want to look a prat! Every article has a breakdown of where the information has come from so you can answer any question whatsoever if asked and then you can always ring me
You might say I am not very good at Social Media? I will teach you in simple , step by step layman’s terms that even your Mum could understand.
You might say I am not very Computer literate – I will help you and hold your hand.
What if I don’t do anything? Then that’s your choice .. but don’t regret the choice you could have made
Is this the best client I have? …. Not at all, here is the video of the agent who increased managed stock by 200 managed property in 21 months, taking his managed stock up from 950 managed properties to 1150. He didn’t have Rightmove banners, saving him £300 a month, but did spend £500 on putting the articles in the newspaper.
Now this agent tells you everything .. but its a long video. .. 41 mins long .. it depends how serious you are in growing you lettings agency?
Kind regards
Christopher Watkin
07950 147572
christopher@christopherwatkin.co.uk
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