It’s better to use a lettings specialist than an estate agent who suddenly starts to do lettings, says proprietor of Belvoir Sheffield Rick Flay…
Need buy-to-let insurance soon? Find out where professional landlords go..
You may have noticed that in recent months the boundaries between estate agents and lettings specialists have become ever so slightly blurred.
While estate agents once dealt only with the buying and selling of properties, many have now diversified - including doing lettings as a sideline.
Due to the slowdown in house sales and the bite of the credit crunch the estate agents traditional income stream of fees for selling houses and for arranging mortgages are drying up.
As a result they start to look at how to replace those income streams, and often see lettings as a way to keep the doors open.
It is certainly happening in Sheffield and I would imagine it is going on everywhere else too – we’ve seen this part of the cycle before so it’s no surprise!
On paper what they offer is fairly similar to a lettings specialist. A tenant find service and full management can be all part of the service. But! The killer is in the detail… and potentially the quality of delivery.
For landlords looking to market their properties there are a number of disadvantages.
Firstly, staffing. All of a sudden an estate agent will need to find new staff with different skills, then they’ll need to train them. Where does the expertise come from?
Secondly, the only similarity between a sales agency and a lettings agency is the product, say a house or a flat. The whole dynamics and speed are different. You need different software, contractors to do maintenance work, a new website, the list goes on…
Thirdly, there is a financial issue. The primary motivator is to replace lost income, which is at odds with setting up a new business. Recruitment, marketing, training, all cost money at a time when the purse strings are tight.
Fourth, marketing. How do you get the message out quickly to potential tenants? Driving traffic and building websites all add to the financial outlay.
Potentially, you could end up with untrained staff, lack of systems leading, say, to late rent payments, lack of proper documentation and a lack of knowledge of the law.
Surely, it’s a bit like a doctor suddenly deciding to offer dental services because he has no patients left!
And, it’s not just the landlords who could suffer - there are plenty of disadvantages for the tenant too. In the initial stages, there is likely to be a lack of properties to choose from, potentially a slow turnaround on credit and reference checks as the new process are learnt. And then, once they are in place, potentially there could be a slow turnaround to requests for repairs etc if insufficient tradesmen are in place.
As far as I can see I’m not sure there are any benefits of using their services rather than a lettings specialist. The sheer fact of being a specialist means that there is existing knowledge, expertise and experience. Plus, there are established systems in place, up-to-date documents and usually a recognized lettings brand.
At Belvoir, for example, we have a FREE legal helpline for all our landlords so we can give accurate and up-to-date advice on tricky issues - this offers great protection to landlords in an increasingly litigious market place.
Before deciding whether to use an estate agent or lettings specialist to take on their property I would suggest that the landlord decides what they want from the relationship.
If they want a quick turnaround on finding tenants for empty properties, legal protection, quality leases to protect their assets, and someone to talk to who has been trained and can actually add value, then surely it’s a no brainer.
As I said earlier, would you go the doctors for a filling…
No comments:
Post a Comment