Running a lettings business effectively requires a lot more work than merely finding a tenant, handing them the keys and hoping for the best. From advertising to gather leads, negotiating with vendors, reaching out to tenants and finding suitable candidates, vetting tenants, drawing up contracts, collecting rent, being called out to make repairs, not to mention the hordes of admin and financial tasks, yes, it’s safe to say that lettings agents have their work cut on.
Outsourcing what’s deemed as ‘non-core business activities’, such as catering, reception services and building maintenance, has been a key business trend for many years, gathering momentum under Thatcher’s Britain of the 1980s, which drove public authorities to adopt free-market principles. In the 21st century, with the rise of digital remote technology, we are seeing the notion of outsourcing tasks being renewed with greater vigour, as businesses ‘hand over’ certain tasks in order to concentrate on business growth.
And none more so than in the lettings industry. Outsourcing tasks can be a lot of business sense, particularly in a multifaceted and diversely skilled industry like lettings.
Agent Wow caught up with several leading experts in the lettings industry and asked them about the effectiveness of outsourcing letting agent tasks and what should be outsourced.
Simon Duce, Managing Director of ARPM, providers of professional letting solutions for property professionals, highlighted the reasons of why outsourcing letting tasks is effective for letting agents as the following:
- Agents can focus on what they are good at (front end valuations/selling) and outsource the back office/admin to specialists where they might have limited knowledge and resources inhouse to carry out these tasks.
- ARPM charge their service fees on a cost per property basis making it cost effective for agents with smaller portfolios (under 100) opposed to having to employ a full-time staff member.
- If agents outsource they can focus their time on winning more valuations and letting more properties instead of having to focus time on back office tasks such as rent collection and dealing with maintenance issues.
- Many agents lack knowledge of the lettings market so they are not up to date with the legal compliance aspects – a professional outsourcer is up to speed with compliance all part of their standard service.
Simon Duce said the main letting tasks that get outsourced to ARPM are:
- Full Management (property management)
- Rent Collection (client accounting)
- Pre-tenancy (reference, AST agreements, collection of initial monies)
Agent Wow also spoke to Touchstone Agent Solutions, which provides a variety of specialist support services to letting agents, offering ways to save money and cut costs. Touchstone Agent Solutions offers a service which allows agents to pick and choose which services they want to outsource, so it’s down to the individual agent to choose which parts of their business they wish to outsource to best suit their company.
“In a challenging market, by outsourcing, agents can focus on winning new business, while reducing their fixed costs,” said Touchstone.
This ‘pick and choose’ of services, alongside the company’s pay-as-you-go pricing, means letting agents only pay for the services they need. The letting solutions agents can choose, include:
- Administration tasks
- Client accounting
- Credit control
- Maintenance and compliance
According to Touchstone Agent Solutions, some of the benefits of outsourcing such tasks, including reducing or removing:
- Unnecessary infrastructure
- Staff and recruitment responsibilities
- The headache of holiday and sickness cover
- Staff training and compliance requirements
Matthew Duckett, Head of Touchstone Agent Solutions told Agent Wow:
“We’re experts at what we do, and we’ve been in business long enough to understand it is a challenging time to be working in lettings. Maybe you’re already having to make cuts in your business? Perhaps you’re in the fortunate position of a business that’s growing rapidly. Either way, we can help, by taking the pressure and cost of admin, while you get out and earn.”
Fixflo, providers of repair reporting and maintenance management software for professional property managers, also shared their thoughts on letting agents outsourcing tasks.
Alex King, Head of Marketing for Fixflo, told Agent Wow about the benefits of using ‘outside help’ for estate and letting agencies.
“A key benefit of using repairs and maintenance reporting software is that it streamlines the property management department so they can focus on delivering value and a great service to their customers,”
“Instead of taking phone calls or responding to emails, tenants can resolve issues through the in-system advice or if it cannot be resolved, then they are helped to accurately report the issue to the agents, no matter the time or day of the week,” said Alex King.
King also spoke of how the impending lettings fee ban will mean agents will have to think about their business model.
“In all likelihood, agents will have to increase the number of properties they manage simply to maintain business performance,” said King.
“However, just adding more people to service a larger portfolio isn’t a scalable or long term solution and it won’t add to their bottom line. So agents need to think of ways of increasing their capacity per property manager. Those agents who introduce technology or work with a third party that can help them achieve this will be the ones that will thrive in the future,” added FixFlo’s Head of Marketing.
Are you a letting agent or a property management specialist who benefits from outsourcing certain tasks? We’d love to hear our readers’ experiences and thoughts on outsourcing letting tasks.