Our Top Tips for Lettings Agents

The Five Tiers of Innovation

The world has undergone a turbulent time; but with markets recovering and confidence growing, the best agents are now seizing the opportunity to invest in growth. Competition is as fierce as ever, and with margins being squeezed ever more tightly, we need innovation, and we need it now.

At VTUK, innovation lies at the heart of everything we do. It’s something we view as being essential to attracting new business – and, in our view, the same rules apply to lettings agents. We have identified five tiers of innovation but before any innovation takes place, you must consider the context. Messages should be tailored to your audience and reasonable goals established – ask yourself how many landlords you can realistically attract, rather than how many you’d ideally like to attract.

I know three practices which expanded too rapidly, through admittedly great strategy, but were gone a year later; collapsing under the weight of growth. The key to success is to target achievable, sustainable growth and make appropriate strategic choices that will help you to reach these goals.

VTUK’s five tiers of innovation:

Tier 1: Communication

We live in a digital world. Social media channels are becoming increasingly important and the old mantra of ‘keep it simple’ is outdated.

A VTUK client based in Oxford’s student hub uses Facebook almost exclusively – they tailored their communication strategy around the communication habits of their target market. Their communications presence has become viral and has played a major role in the agency winning the award for Gold – single office central – and Silver – student lets – at the prestigious Letting Agency of the Year Awards.

A lot of agents have jumped on the Twitter bandwagon. There is no doubt that it’s a powerful marketing tool, but the key is using it correctly.

The majority of agents opt to pump out details of properties on their books and then sit back, proud that they are part of the social media revolution. Does this really help their business? People researching a reputable agent will want to see their personality and authority in the market – not a bunch of listings – they use the portals for that.

So rather than tweeting that you’ve got a two-bed flat available for rent, tell you’re followers what’s happened to sale or rental prices in the area in the past six months or explain to them how the recent change to EPCs affects them. In other words, use Twitter to enhance your reputation, not your customer base.

Communications is such a diverse area that I will be dedicating a whole blog to it later in the series. In the meantime, the key thing to remember is to explore the range of communication tools available and select the ones that will most effectively help you to achieve your business goals. Here’s something to think about; 98 per cent of text messages are opened compared to just 52 per cent of marketing emails.

Tier 2: Be unique

The second tier is to always demonstrate industry expertise and excellence – make your clients aware that they are paying for a value adding service.

This has always been the case but with new legislation affecting landlords directly it is important to take away the fear factor and attract new instructions by demonstrating knowledge, compliance and security.
This can be both proactive and reactive to market conditions, but agents should always remember the forces that drive landlords; no void periods, rents paid promptly and the property left in good order. The market has filled theses gaps with some first rate products and services which, when compared to their cost, are almost set up as free offerings based on a long term relationship yields with a professional landlord.

Tier 3: Make yourself part of the community

In order to be the go-to brand for buy-to-let portfolio landlords and tenants, agents need to be directly at the centre of their community.

Having an office gives you that presence, yet so few agents really use what, in the digital era in which we live, is a large business expense, to its full advantage. Agents shouldn’t just think of their premises as just a place for negotiators to meet and tenants to collect keys. Make it exciting and inviting.

Consider what’s in the office? Where do the furniture, styling and décor come from? Is it local providers? Is the artwork local? What is the ambience? An agency in Manchester has coffee outlets in branch and one of our clients even has a bar.

The key thing is to put yourself at the centre of everything that’s happening in your area – make your agency more than just a place where the public comes to buy, sell or rent houses. Look at where your clients are and become ‘present’. Rugby clubs, charitable events, and so on.

Tier 4: Do your due diligence.

It’s easier to get more business from your existing clients than it is to win new business.

When we asked a sample of 200 of our clients how many properties their landlords had in total, only 3 per cent could tell us. Research we have conducted with landlords shows that most multi property landlords are not exclusive to agency but share the properties equally with several agents.
By firstly discovering the extent of this dispersal, and then using their market and competitor knowledge, our clients have found quick wins in attracting the other properties.

This is much simpler than attracting completely new landlords and our research suggests that agents could significantly increase their managed portfolio volumes without increasing their landlord numbers, which has the added advantage of being more cost effective on overheads.

Tip 5: Be a one stop shop.

The lettings market has changed dramatically in the last four years. If agents are still operating in the same way they were in the mid-noughties they will soon begin to struggle, if they are not already.

How agents target and process business goes to the very heart of this. It’s not for everyone, but our most innovative clients have followed some of the industry heavyweights and adapted their business model and service offering in response to market changes.

The first thing to take on board is that estate agency and lettings and management now work together. Given the severe decrease in the number of the first-time buyers, the landlord clients of lettings agents are also likely to represent a significant proportion of total purchases. As such, retaining and growing that relationship is key. If you don’t, someone else will, and probably already is.

78 per cent of buy-to-let investors are looking to increase their portfolio. If you can’t satisfy their needs, they will look elsewhere, which could well mean that you’ll lose the management of their existing portfolio. Strengthen your relationships and ensure landlords have no reason to look elsewhere.

On the other hand, approximately 40 per cent of current landlords are non-voluntary. This provides an opportunity for agents to secure tenanted sales, which keeps all parties happy and, yes, makes agents money! Although sales of this kind don’t fit the standard agency model, help is at hand through specialised property investor networks which match landlords seeking to acquire tenanted properties with sellers who fit this criterion.

This is a brand new concept, and too severe for some, but as we started off saying, in today’s market innovation isn’t a ‘nice-to-have’ or a luxury it’s critical to business success, and vital for profitability in these challenging times.