What hidden costs are draining your lettings profits?
Hands up if you’re starting to take your income and profitability a lot more seriously? With the fee ban looming, it’s sensible to examine your income and expenditure in greater detail. While your accounts department will, no doubt, come to you with some black and white figures laid out in a spreadsheet, creating a cost-effective lettings agency takes more than a glance at bottom line figures.
There are probably a number of hidden costs hindering your lettings business. It’s now that you need to play detective to really uncover where you can streamline and save money. It may surprise you to know that, in many cases, you can actually pay less and get more for your money.
Staff hiring costs
An online advert here, a newspaper advert there. You might even be paying an agency to source hard-to-find specialist staff on your behalf. It all adds up. If your accounts administrator is about to retire or you’re finding it impossible to recruit a property manager, consider outsourcing these roles to save yourself the exasperating and expensive recruitment process.
Training
There is a more subtle cost attached to hiring staff too. Any new joiner will need training – whether that’s just in the in-house way or something more formal attached to a professional body. Courses cost money and take resources away from the office, while even in-house training can be a drain on your time – taking you away from core tasks and perhaps that elusive new landlord. It is possible to add team members to your agency without any training – think about outsourcing roles to ready-trained suppliers as a way of remotely growing your team.
Equipment & software
Unless you’re relying on a rolodex and carbon copies, your lettings business will probably run on a number of softwares. Keeping up with the latest versions and new innovations is expensive, especially when your technology resources need to be spread thinly over new channels, such as social media, customer relationship marketing and website analytics. If you feel software companies have got you over a barrel, perhaps it’s time to take advantage of a property partner who is already running the latest tech – especially those really expensive packages that keep property management on track and in profit.
Industry memberships
Belonging to one of the letting industry’s professional bodies has its advantages but memberships are costly to maintain and renew. If subscriptions are a necessary but a punishing drain on your finances, there is an alternative. Working with a third party who is already a member gives you benefits by association – some outsourcing companies actively endorse the piggy backing off their own affiliations. Choose wisely and you’ll find an outsource partner who is already a subscriber of legal help lines, deposit schemes, trade bodies and ombudsman schemes – saving you the cost and hassle.
By Simon Duce, Managing Director, ARPM.
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