Do you ignore the noise when opportunity knocks?
I couldn’t help but notice two recent news stories relating to the prime Central London lettings market, published on the same day. Both pointed to brisk post-BREXIT business at the upper end of the capital’s rental market
Knight Frank’s latest report showed that the number of tenancies agreed in August 2016 was actually the highest on record, with a 15.7% uplift in tenancies during June, July and August. Elsewhere, London Central Portfolio reported that the number of properties available to rent in the prime Central London market in the last three months has trebled – from 8,834 to 24,761.
Together these news items paint a very fluid picture in Central London, with potential sellers choosing to let out their properties instead of selling, and a boosted supply of rental properties creating a competitive market that tenants are keen to be a part of. And you should also want a slice of the action!
We use a simple equation when explaining how lettings agents can increase their revenue streams by offering a full property management service:- £1,000 pcm rent at 10% full management fee = £1,200 per annum on a single property. That’s a yearly income of £12,000 if you have 10 managed properties. Grow your managed portfolio and you can quickly grow your profits!
Now think about the rental fees in prime Central London. HomeLet’s latest rental index shows average monthly rents across all 21 London boroughs was above £1,150 – with average pcm rents of £1,563 in Camden; £1,655 in Harringey & Islington; £1,777 in Tower Hamlets and £1,821 in Lambeth. That’s not taking into account the super prime lettings market. Stop and calculate the fees attached to the five-bedroom Park Lane penthouse up for £281,667 pcm, the ten-bedroom Hampstead mansion on the market for £151,667 pcm, or the eight-bedroom Chelsea apartment available to tenants at £108,333 pcm. Remember, this market is increasing in strength and there are not many landlords, if any, at those price points wanting to self-manage!
So it brings me back to the title of this blog. Do you turn pass up opportunities to fully manage properties because you don’t have the staffing, the specialist skills or the resources? Have you put a stop to winning new business because you might over promise and under deliver? Opportunities may present themselves and you shouldn’t be turning them away. Before you shut the door (or you don’t answer it in the first place), give outsourcing a thought. It’s an instant solution to growing your lettings business allowing you to reap the rewards without any of the hard work.
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