Letting Agency Start Up - Advice Please!

[elvis1971]

Hello,

My hubbie and I are looking into starting up a letting agency. We really are in two minds as to whether it is a viable option in the current cllimate although I have read a few articles (including a few on Home Move) which suggest that the number of those renting is on the increase due to inabilty to buy.

Does anyone have any advice they could give? We have initially bought a start up pack which provides pretty comprehensive information, we have a company name, brand and logo which is very different to those currently in the market in our area and our focus will be on providing an excellent service to both landlords and tennants every time (we have experience of cowboys ourselves as tennants and want to give others an good experience of renting/letting).

We haven't yet invested any further time/£ to this as we have just started our investigations into viability.

Any thoughts or advice would be very very gratefully received!!

[googler]

How many other letting agents are currently operating in your town or locale?

How long have they been operating?

Have there been any other LA start-ups in your area recently?

How are they faring? Are they still in business? Have they taken any market share from those who've been operating longer?

DO YOU HAVE A BUSINESS PLAN? If so, does it extend to more than 'provide a good service' ?

Do you know how many properties you would need to take on in order to turn a profit after 3, 6, 9 or 12 mths? Have you projected expenses against income?

Stream of consciousness, but this is what occurs to me straight away.

If there ARE existing letting agents in your town;

Why would someone use you - with admittedly little or no experience in the field - in preference to one of the current agents? How are you going to secure market share?

[SeekER]

It's worth talking to someone like Business Link who will be able to give you advice about setting up a business and you can get them to send over an adviser who will give you the benefit of their experience - all free of charge!

[Domino159]

I am currently in the same position, i am looking to start my own letting agency in my area and feel that it would be beneficial. I agree on the same morals as you to offer both landlords and tenant the service in the industry. I have worked for letting agencies for almost two years now and feel that i could do a better job with my eyes closed.

i have done the research and found that allot of start up letting agencies don't last that long as there is a high turn over but not enough profit. i feel that the key to the success is with a unique approach to advertising and marketing, once you have learned this then the the future will be set.

[orema6]

Hi, I too was looking to start setup my own letting agency, like you i wasn't sure whether this the right as i've seen many agencies shutdown. however, after careful consideration and a few amendments I'm now preparing to launch my agency next month. And already gathered some clients and properties to manage.

Depending on your plan, I believe that this is the right time to start up.

[googler]

Originally Posted by Domino159

I am currently in the same position, i am looking to start my own letting agency in my area and feel that it would be beneficial. I agree on the same morals as you to offer both landlords and tenant the service in the industry. I have worked for letting agencies for almost two years now and feel that i could do a better job with my eyes closed.

i have done the research and found that allot of start up letting agencies don't last that long as there is a high turn over but not enough profit. i feel that the key to the success is with a unique approach to advertising and marketing, once you have learned this then the the future will be set.

Forgive me, but unique adverts and marketing won't necessarily address your key issue - you see other agencies with high turnover (lots of business) making low profit.

Why is this? It can't be because of non-unique advertising, because you state they have a high turnover.

What will your advertising do to address the low profit issue? Sell your services at a higher price to the public?

[MustHavePads]

Hi there elvis1971,

Well I have previously been asked by friends about them investing in me opening my own lettings agents. I did not follow through for one reason or another and in many ways feel I have missed the boat now anyway.

The reason I say this is that in my own town the number of lettings agents has gone from about 60 to about 80 in the last year. Nearly all the estate agents have either become lettings agencies or opened a lettings arm. As well as this, agents from other towns have entered the local market along-side the several new start ups. In that mess I think starting a new agent would be very brave. I expect your own town has a similar story to tell.

In my firm I am the sales and marketing manager and deal with most everything on the sales side at least, and have delved into elements of the property management side too.

My own opinion would be that you try and find out how many agents were in your town 12 months ago and how many there are now. Visit as many of their websites as you can and take a look at the competitions presentation as well as marketing strategies and special offers. For new players the old cheap rate first time offer for landlords will often be present no doubt (typically around 5%).

Other agents may be slashing admin charges or reducing fees to keep getting new take-on property amidst the fray. There are some key things you can do to be noticed, the infrastructure and staffing side I will assume you have the grip off already.

Many agents have been slow to make a full transition to being web-based first and office-based second. Lots of start up lettings agents do well to operate from home for a good period. There is free software such as provided by thebu2iness.com and advertising on rightmove and findaproperty is straightforward enough. Maybe run a very brief local paper campaign and make sure you use the paid time to push for a couple of property focus and agent interview pieces about your business. Most papers are crying out for agents to bother sending these in and they are much bigger than the pricey box ads!

Make the paper a brief affair as most agents find they make less than they spend with the local rag. That said be careful as some towns still find a preference for looking in the paper by a large number of potential clients, mostly being landlords still beleiving agents let much through big newspaper ads...

Secondly there is your own web presence. Get a good website builder and a good search engine optimisation expert...I just can't overstate these two peoples importance in your future success...

Do you think anyone clicks past page 1 or 2 in the Google results when they search for 'lettings bradford' or whatever?

Make sure your guys give you a site that is professional and user-friendly before you make the final payments. The SEO expert should offer a period of continued follow up for 6 months at around £200 per month. If they did a good job of SEO on your site you probably won't need it, but it is your call. Test Google see where you come up and if its good and they promise they can make it even better it is worth considering.

Alongside this budget for other marketing campains and obviously buying a few boards to put up to help establish the brand locally. If some other very cheap options arise to run in the background then great (local newsletters, magazines and business listings etc.). Keep back a budget for a Google AdWords and Yahoo SM marketing campain. best to run them against each other with the same selection of test adverts and see which one is getting you the must relevant visitors at the lowest cost. Install an Analytics function to your site, such as Google Analytics. Try to track the business conversions from your e-spending.

With tricks such as this you should rise above a section of your competitors immediately. The only question then is do you have the viable business plan behind it all to keep those you catch?

Many lettings agents just don't get the web and a lot of the web experts seem hesitant to bother helping them by providing a fully consultaive service. This has ended up with agent sites that nobody will ever find or sites that they would never want to use if they did. Savvy new players will be thinking very Web 2.0 in there marketing plan.

For an example feel free to Google my personal lettings blog (not my real company site) by searching 'Cheltenham Lettings' or 'Lettings Cheltenham' and you will see that I pop us as both postions 11 & 15 for the first and both 12 & 18 for the second. Bear in mind that is not even for a genuine letting agencies home page but just my personal Blog!

[Note that my site appears higher up than several major property portals and established agents yet I only finished the main stage of optimisation today]

Think smart about which niche you fancy as that can make a big difference to your plan. A high end agent can't offer bargain basement 5% deals as wealthy multi landlords will be suspicious of your level of follow up service. Think smart on how to reel them in.

If you want the cheaper proeprties end of things, and the student and DSS markets, obviously low magagement fees will go down well (even if just for the first 6 months) but be careful of taking on to much hard to manage dross.

If you prefer to be mainstream then meet in the middle with slightly discounted fees and offer services that seem to make you stand out such as a 24hr tenant emergency line and 7 days a week contact available to landlords (preferably be e-mail!) and an inteligent service pricing format based on a good client reward structure. Reward those who are upping their spending with you and adding properties as relationships progress.

On the tenant side we all know that 'admin fees' are broadly unpopular and seen as highly inflated. Phone around and find out the admin fee structure of local agents. It is hugely varied for what is essentially a very similair service. I like CheckSearch myself as they are not expensive but provide peace of mind for both you and your landlord. Work out what your cost in time (and therefore money) is on the process.

One piece of advice is do not go with the, "it's the same price to reference two people as it is one", a theory held by most agents. Every tenant senses the obvious lie in that statement. Reference single people at a lower rate, after all at least they probably wont suddenly break up with their partner and bug out to another property, and if your paying a reference agency they of course only charge per person anyway.

And if you can be bothered run a Blog on your site to keep fresh content being viewed and indeed pinged by search engines. Don't however have a Blog on your site with two boring posts from 6 months ago it just looks dumb and lazy, if your Blogging fares badly remove the Blog.

If this helps you then great, if it helps you open a letting agents in my own town then more fool me for answering before asking where you were based!!!

If you want to chat feel free to shout at me.