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How to start a letting agency

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pilgrim91

I am interested in starting a letting agency. Does anyone have any tips or pointers please?
What is the best way of getting upto speed with how things work in this area of business?

Thanks
 
pilgrim91 said:
I am interested in starting a letting agency. Does anyone have any tips or pointers please?
What is the best way of getting upto speed with how things work in this area of business?

Thanks
Click to expand...

One word - EXPERIENCE!

If you don't have any experience, I would forget about it personally! I have an Estate Agent Friend and I was talking to him a while back as I was considering start my own online Letting Agency. His advice was stay well clear of it!

He said there is so much competition and the shop based business are pretty much putting nearly all the online agencies out of business because a lot of them have been started with little or no experience and it's a lot more complex than they think.

Matt
 
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why do you want to start in this area if you have no experience of it? Or do you?

It can be a bit of a nightmare job - if you are looking after a lot of properties you can be continually dealing with leaky pipes, broken down fridges/washing machines, calling tradesmen for quotes, replacement keys, tenants doing a runner and wrecking the property, noisey neighbour complaints - all for 8-10% of the monthly rent?

Can think of easier ways to make a living - though of course, get a LOT of properties and have a couple of people to share the burden, know a couple of "all trades" builders who are reliable and your life becomes a lot easier.
 
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Hi I used to work for a property management agency for 6 years and they sold properties too. This is an extremely demanding job but can be worthwhile if you have experience. I definitely would not go into it blind as it is incredibly varied from day to day. I used to do a bit of everything i.e inventories, invoicing, viewings, landlord/tenant queries, sales particulars, bacs payments to landlords, checking tenants in/out, deposits, rent payments, managing rent book on a daily basis etc etc. I have done it all! Everyday something new comes up and its usually problems with tenants to be honest. However, if you like multi tasking then this is the job for you. You need to know a lot about HMO's if your dealing with student accommodation. I enjoyed it but I certainly worked for my money! I thought about setting up my own agency given the experience I have however, lack of funds stopped me from purchasing the software programms to get started. We managed 120 properties with just the two partners and 2 admin staff. Don't ask how we did it we just did. You can expect a turnover of approx £90k per year with this many properties on your portfolio but you will have to work your socks off to get it. Where abouts are you based and how will you go about advertising your properties? Rightmove charge approx £300 per month for their advertising which is ok if you have income from at least 10 properties I would say. Setting up is really easy. I did most of the work at home on my computer for the main admin part just from memory. If you would like some advice or copy templates which I have made up myself (NOT COPIED) I can let you have them for a small fee. This would include rent sheets, invoices, inventories, check in/out documents etc. Please PM me if your interested or if you would just like some advice.
 
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Try looking at Southcourt business package, just google how to set up a letting agency. They do a complete package on how to do it including all the templates you will need. Its costs approx £295 for manual and a further £295 for website. A lot cheaper than a franchise option. I purchased it myself a couple of years ago, and it is certainly a well written guide, very professional. However I decided there is just too much competion in my area and it would take at least 1 to 2 years make a living from it. Hope this helps.
 
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Feldon said:
Try looking at Southcourt business package, just google how to set up a letting agency. They do a complete package on how to do it including all the templates you will need. Its costs approx £295 for manual and a further £295 for website. A lot cheaper than a franchise option. I purchased it myself a couple of years ago, and it is certainly a well written guide, very professional. However I decided there is just too much competion in my area and it would take at least 1 to 2 years make a living from it. Hope this helps.
Click to expand...

I have also had a look at the Southcourt package (not mine a friends) it is pretty comprehensive! But you have hit the nail on the head regarding the problems - COMPETETION! Anywhere that is a good place to start up to earn a good living already has a great deal of Letting Agencies making that living and a lot of them have been doing it a good few years!

This is something that 10-15 years ago wa a great idea but now it's just so hard to make a viable business of.

Matt
 
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Granted, there is a lot of competition. However, Landlords will have tried at least 2 or 3 agencies with their properties until they find the right one. That is, they have found someone who they can trust who will offer them a bespoke service for their money. This is how agents get their reputation. It is up to the agent to prove their worth to potentail clients. Communication is key! If you have faith and confidence in yourself that you can do it then why not.
 
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Feldon said:
Try looking at Southcourt business package, just google how to set up a letting agency. They do a complete package on how to do it including all the templates you will need. Its costs approx £295 for manual and a further £295 for website. A lot cheaper than a franchise option. I purchased it myself a couple of years ago, and it is certainly a well written guide, very professional. However I decided there is just too much competion in my area and it would take at least 1 to 2 years make a living from it. Hope this helps.
Click to expand...


i'll give you £50 for your copy of it :D

i have seen their package offered and it looks decent value - compared to the franchise deals being punted

funnily enough i noticed a "letting agency" for sale in my hometown


they were wanting £10k for the business, selling up because the girl running it had just got pregnant - and for that money, how many properties did they manage? NONE! They had offloaded all the properties and were now selling some "software" (excel spreadsheets) and a days training

funnily enough the "business" is still for sale
 
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sellickbhoy said:
i'll give you £50 for your copy of it :D

i have seen their package offered and it looks decent value - compared to the franchise deals being punted

funnily enough i noticed a "letting agency" for sale in my hometown


they were wanting £10k for the business, selling up because the girl running it had just got pregnant - and for that money, how many properties did they manage? NONE! They had offloaded all the properties and were now selling some "software" (excel spreadsheets) and a days training

funnily enough the "business" is still for sale
Click to expand...

Not anymore.......I just snapped it up!........................................................Now, business partner wanted...
 
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Against what some people say I would say that you don't need so much experience but more organisation is the key - and not to grow too quickly that you don't handle what you have. There are plenty of resources that will help you learn the legal side of things

I run a company who provide free services to the lettings sector and we have lettings clients all over the UK and one of our main observations is that organisation is a problem with some - and those are the ones that go bump or end up not hitting too many lets. You'll probably have people tell you all day long how difficuly this industry is but really, not so much (I was in Lettings before setting up my business) but you need to try and create and provide a good honest service for your tenants and your landlords, this is what the industry is crying out for and when it comes to taking on staff, make sure you've got every contract in place for data protection.

The industry is changing and those who come on board now are not so much your quick sales person but your well organised, well meaning agent will do well.

If you would like any more help please PM me and I'll help as much as poss.
 
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After starting, building and selling my lettings agency earlier this year, I would also recommend to stay away unless you really have a passion for lettings or you have a really big property portfolio.

Regards

Jo
 
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Fourteen12 said:
One word - EXPERIENCE!


He said there is so much competition and the shop based business are pretty much putting nearly all the online agencies out of business because a lot of them have been started with little or no experience and it's a lot more complex than they think.

Matt
Click to expand...

That's wrong....well I am doing fine, I am online only, but I guess it's down to the fact I only charge £149 to let a property out and no fees are paid from a tenant, ie admin charges. Property Management isn't a huge thing where I live, I tend to find they want a tenant only. Some 'shop' agents charge 1 months rent + £250 in tenant fees!

amanda1112 said:
? Rightmove charge approx £300 per month for their advertising which is ok if you have income from at least 10 properties I would say.
.
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Rightmove is £285 + VAT lettings.....£535 + VAT for sales. I used them many years ago when it was £199 for both. I avoided them this time, yes no 1 by name, but not my what they do for you. I use the digital property group and zoopla. Just over £300 for both, with featured agent status! Zoopla is no 1 for buyers and sellers, such a good site, which will only continue to get better. Search your postcode, ie houses for sale in etc, I bet rightmove doesn't come up first, I know it doesn't my way!

Lewy_T said:
Against what some people say I would say that you don't need so much experience but more organisation is the key - and not to grow too quickly that you don't handle what you have. There are plenty of resources that will help you learn the legal side of things

I run a company who provide free services to the lettings sector and we have lettings clients all over the UK and one of our main observations is that organisation is a problem with some - and those are the ones that go bump or end up not hitting too many lets. You'll probably have people tell you all day long how difficuly this industry is but really, not so much (I was in Lettings before setting up my business) but you need to try and create and provide a good honest service for your tenants and your landlords, this is what the industry is crying out for and when it comes to taking on staff, make sure you've got every contract in place for data protection.

The industry is changing and those who come on board now are not so much your quick sales person but your well organised, well meaning agent will do well.

If you would like any more help please PM me and I'll help as much as poss.
Click to expand...

Agree
 
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What about considering, as a sideline, or maybe the main business, void property inspection services? Lots of commercial properties are empty these days, and they all need someone to visit them regularly to make sure everything is OK. i would talk to local mananging agents, build up your business that way, and having the extra revenue that is counter cyclical to other parts of the economy may be a help.
 
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Hi Joila

Never heard of the Vision package before your post and they weren't even on the horizon when I was researchin this a couple of years ago and brought into the Southcourt Package.

I had a look at their website and they do not seem to be offering anything different from Southcourt or others and at a similar price too.

You mention about Rightmove and Findaproperty but all I found on their website was that Rightmove offer regular free trials, which I find somewhat misleading as I have phoned Rightmove on several occassions whilst researching setting up a lettings agency and asked them if they every did any special offers or trial periods and both times was told no they do not. This has been one of the main reasons that I have not as yet set up a lettings business due to the high cost of Rightmove and I don't think you can be taken seriously without using their services.
 
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Had this lot 'offering their services' the other week - not sure if they would be any good?
www.lettingvision.co.uk.

(no connection with them at all - just wondered if they were similar to the southcourt lot mentioned?)

As for competition - it always makes me laugh when people don't go into a business because of competition - very short sighted.

So there are lots of people out there doing it - that proves there is a market!
All you need to do is be better, faster, more efficient, offer more / better services, compete on costs - all the basics, and you are in with as good a chance as anyone.
 
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Beechcomber

Lettingvision is the one Jolia mentioned, sorry I only mentioned Vision in my reply, however they don't seem to offering anything differend from the competition. My main concern with what Jolia mentioned was that they seemed to think that they would get free or discounted advertising on Rightmove, which I don't think they will do or could offer as from my research Rightmove do not offer discounts or trial offers for new starters.

As to competition, you are right. The fact that there is a lot of competition shows that there is a market for it, however the trick is to offer something different ie. usp.

Personally I'm still looking at this as a business and while this is a relatively low cost business to start up, even with the likes of Rightmove it takes time to build it up to provide a full-time income, somewhere in the region of 12 to 24 months from my own research so unless you have a stack of cash to live on during this time you either need an alternative income such as another business or a full time job and start it part-time. As it would be difficult to do part-time being an employee for someone else I am building up another business which will allow me when the time is right both the time and the income to start up in this business.
 
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jolia said:
Hi Guys, what i have noticed though is that southcourt only pretend to be an agency whilst offering this package. you can see this as they are not on any of the portals. antony and co who run letting vision have loads of properties. they are currently trading and they are the largest agent, so i dont know what southcourt have been doing all this time. i spoke to the guy at letting vision and he told me to ring findaproperty and advise i was starting up and was deciding between them and rightmove, and to then ask for an incentive to choose findaproperty instead. he was actually right as they did offer me a good discount. you can also use the pay per lead sites which appear very good.
Click to expand...

So you don't get a discount or trial period with Rightmove then?
 
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Hi,

I'm new to this forum but I was just wondering if anyone else had any more information about starting a letting agency.

I was particularly interested in Amanda1112's reply. Four staff with a turnover of just £90K means that the admin staff must have been on about £10K each and the "partners" £25K allowing for overheads etc. It doesn't seem a lot to me to be honest.

Has anyone else got any other figures that they could throw into the mix. Even a £100k turnover isn't a lot if you factor premises, cars, indemnity insurance etc into the equation, I'm not saying there isn't a profit to be made but surely this is a scale business, i.e. you need a lot of properties to really make it pay?
 
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My two cents:

Southcourt package is good (I'm not aware of the other) and gives lots of practical advice. Their website package is not as valuable as the manual though (viewpoint database is free, Portal manager is free and you can use a template site and make it yourself).
It's best to get qualified via NFOPP in property lettings and management as the legislation involved in letting out property is plentiful.

Zoopla - take pay per leads only. You'll find you get less than 10 leads per month from here unless you live in Manchester, Birmingham or London. Their sales team leaves a lot to be desired but you'll get there in the end.

Rightmove - very expensive (I was quoted higher figures than the above) and it's only serving to boost their profits as a public company (look at their latest results).

Marketing is the single most important aspect involved in this business. Without heavy marketing you'll find it very hard to make any inroads in lettings and property management. I'd budget for £1000+ marketing per month to create anything viable.
I've found that most landlords use their friends to manage. Long established estate agents are also trust partners of landlords despite service issues and high pricing.
The previous comments about it taking 18-24 months to establish seem accurate. Running it as a part-time business is simply not viable.
 
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Gez1 said:
Hi,

I'm new to this forum but I was just wondering if anyone else had any more information about starting a letting agency.

I was particularly interested in Amanda1112's reply. Four staff with a turnover of just £90K means that the admin staff must have been on about £10K each and the "partners" £25K allowing for overheads etc. It doesn't seem a lot to me to be honest.

Has anyone else got any other figures that they could throw into the mix. Even a £100k turnover isn't a lot if you factor premises, cars, indemnity insurance etc into the equation, I'm not saying there isn't a profit to be made but surely this is a scale business, i.e. you need a lot of properties to really make it pay?
Click to expand...

the above figures don't include tenant/landlord set up fees either which seriously need to be taken into consideration. This can equate to approx £12k per year if not more. Why do you need an expensive fleet of cars. What is this telling your clients about your fees?
 
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To be perfectly honest there are soo many things to be taken into consideration when considering setting up a letting agency. It isn't really something you can do overnight. If you are looking for some advice I would say go for it. However, be prepared to be extremely busy as your portfolio of properties build up. Contrary to popular belief this isn't a business where you can sit down for more than 5 minutes without interruption (depending upon how many properties you manage). You could arrive in the office in the morning to find 10 answerphone messages (usually from tenants) with problems, they've lost a key, the tenant upstairs is playing loud music at all hours, there's a leak coming through the ceiling, the sink is blocked, the washing machine doesn't work...you get the picture. Before you get a chance to even pick up the phone to respond a tenant comes through the door with half a months rent (and a few problems besides usually) so more problems to deal with and they all want it done today! Then you check your e-mails (more problems) whilst the phone starts ringing, viewings, cancellations and more things to deal with. We musn't forget the postman who brings you your daily dose of cheques for rent which need to be banked, letters as to why the rent cant be paid this month bec someone died and can they have a dog. This is just the beginning of your day, you havent managed to leave the office yet and just as you think you can safely go you bump into a landlord who you know is going to yap for ages but you cant be rude so take up a conversation because he has all his properties with your company and whilst looking over his shoulder you spot the tenant from hell who has decided he wants to come in to stir things up in the office. Ive just read this back and it sounds hilarious but its all true! If you are a multi tasker who can work under a lot of pressure and enjoy challenges on a daily basis then I would say definitely go for it, but you will work for your money. The list is endless but if you would like any advice feel free to ask
 
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If you have limited experience, consider a full franchise arrangement. I know a great company that provide a complete off the shelf package and full support to get you up and running, and they have a lot of existing owners you can speak to about how it worked for them, its not cheap but it is a proven model. Feel free to PM me if you are interested.
 
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The other to getting cheap experience is to off course work in a lettings agency before you set up your own
 
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Hi amanda,

I was wondering what job you are in now? How come you got out the game? I'm just asking because i'm thinking of opening a shop and could maybe need a partner soone to come and lend a hand.
I've been running my own internet agency for 5 and a half years.

amanda1112 said:
Hi I used to work for a property management agency for 6 years and they sold properties too. This is an extremely demanding job but can be worthwhile if you have experience. I definitely would not go into it blind as it is incredibly varied from day to day. I used to do a bit of everything i.e inventories, invoicing, viewings, landlord/tenant queries, sales particulars, bacs payments to landlords, checking tenants in/out, deposits, rent payments, managing rent book on a daily basis etc etc. I have done it all! Everyday something new comes up and its usually problems with tenants to be honest. However, if you like multi tasking then this is the job for you. You need to know a lot about HMO's if your dealing with student accommodation. I enjoyed it but I certainly worked for my money! I thought about setting up my own agency given the experience I have however, lack of funds stopped me from purchasing the software programms to get started. We managed 120 properties with just the two partners and 2 admin staff. Don't ask how we did it we just did. You can expect a turnover of approx £90k per year with this many properties on your portfolio but you will have to work your socks off to get it. Where abouts are you based and how will you go about advertising your properties? Rightmove charge approx £300 per month for their advertising which is ok if you have income from at least 10 properties I would say. Setting up is really easy. I did most of the work at home on my computer for the main admin part just from memory. If you would like some advice or copy templates which I have made up myself (NOT COPIED) I can let you have them for a small fee. This would include rent sheets, invoices, inventories, check in/out documents etc. Please PM me if your interested or if you would just like some advice.
Click to expand...
 
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Have thought about setting one up too (no experience in it) and was also looking at South Court too.

I'm guessing there is some simple templates for setting up your own site. Depends on if you run it online only or want a shop. Would have thought that it's much harder to get landlords onboard if you don't have a shop but tenants would mostly look online anyway wouldn't they ?
 
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Im a property manager at the moment working for a corporate. Would love to set up my own company and have been looking into it a lot recently. Was thinking about a partnership actually.
 
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ahh ok... well I'm trying to find a shop right now to start up.

I was kinda hoping you might of had some of your own clients to bring along. I would be interested in a partnership but I think you might struggle starting from fresh down here. I've been going for over 5yrs and have a client base already. I just want to expand as I've only been internet based so far.

Unless you have 10k to tied you over for 6 months I think you would find it tough.
 
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I potentially have over 600 clients who I have built up good relationships with over the years. I could probably walk away with 30 of them. However, I do need to be based here.
 
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Well if you feel like a change drop me a line... I need to be here also as I have built up a client base for this area that I cannot leave.
 
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Jayletz said:
ahh ok... well I'm trying to find a shop right now to start up.

I was kinda hoping you might of had some of your own clients to bring along. I would be interested in a partnership but I think you might struggle starting from fresh down here. I've been going for over 5yrs and have a client base already. I just want to expand as I've only been internet based so far.

Unless you have 10k to tied you over for 6 months I think you would find it tough.
Click to expand...

Did you set up on your own and just grow it over the years ? Sounds like you're doing well from it all.
 
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Yes i started it on my own, to be honest though it was easier back then,now its alot tougher. I've been very fortunate enough to meet some very good landlords over the years who give me there properties. Now i'm in a position to take a shop on and hopefully expand further. It is quite a risk for me though with rent to pay and rates.
 
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Be interesting to find out what softwares people are looking at for their agencies? I have looked at the following: CFP, Rentman, Aquaint CRM and gemini. All very good but expensive (Aquaint being probably the cheapest overall).

Also marketing is clearly a BIG part of a lettings agency, is there a industry specific software out there people are using or have tried for help with marketing efforts? Dezrez?

Thanks
 
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