New Lettings Agency advice needed!

[Mr Ollie]

Hi all, we are in the early stages of setting up a new lettings business in a beautiful part of the country where we have lived for over 30 years. We know the area well and there is a growing market but want to start the best possible way.

We need any advice on how to get started, any information packs that anyone can recommend to give us a guideline & where to obtain computer software for electronic records?

We don't have a huge amount of start up revenue but we are determined to build up gradually. We also want a quirky memorable business name with catchy slogan if anyone has any ideas?

Any advice would be greatly appreciated. Thanks!

 

[Tabbie]

HI

I have a recruitment agency that deals with the property sector and have a guy that I generally call on for this type of thing. There is nothing he doesnt know about the lettings industry. He would charge for his advise (although fairly minimal). If you would like his details please pm me

 

[QuickHomeBuyers]

Whereabouts you located?

 

[TheDude]

Hi, you get a free agency site script http://www.propertymaxpro.com/here (nothing to do with me). It's basic, but easy to customise, ok for starters.

 

[Mr Ollie]

We are located in south devon.

 

[Mr Ollie]

Can anyone recommend any computer software that's suitable for a lettings agency to store records, documents and data etc relevant to the lettings industry?

Thank you in advance for any advice, much appreciated.

 

[QuickHomeBuyers]

Ollie it would depend upon your budget and your current progress. There is an option where for an upfront fee will make you a new website that will run on their software and will do what an agency needs to do.

The price which is paid monthly included hosting, support and the likes.

You need to list your needs and your current progress in this matter for me to help you.

 

[Beachcomber]

Theres alot of good info available here:
http://www.landlord-forum.co.uk/

I'm moving into holiday let management this year in North Devon.

 

[My Owl 1]

Will you be doing long term or holiday lets, or both.

Best wishes

Avril

 

[sanjiv]

Software CFP WinMan is brilliant but costly. If you are any good at Excel, you could probably do it all through that for starters until you have made some money to put into software.

 

[Mr Ollie]

Ollie it would depend upon your budget and your current progress. There is an option where for an upfront fee will make you a new website that will run on their software and will do what an agency needs to do.

The price which is paid monthly included hosting, support and the likes.

You need to list your needs and your current progress in this matter for me to help you.

We are in the early stages and are looking to launch by the end of April. We have done a lot of local research and have seeked legal advise and seen an accountant. We have a company name and are in the process of registering it and believe this is the next stage. We have set ourselves a budget of £200 to purchase the software and have found various packages on the net but are unsure which is most suitable for a start up lettings business. Any suggestions will be greatly appreciated. Thanks.

 

[WardrobeDesign]

I ran a letting agency for 4 years, I sold it in 2008 when I moved. I used The SouthCourt Property management startup. Google it for the link.
I found it pretty good for the money, the sofware wasn't included in the package when I purchased it. But the website and general advice and templates were all good.
You sould be fine with an excel spreadsheet for a while, I wouldn't spend money on software until you have plenty of properties
Let me know if I can help at all.
Sophie

 

[Mr Ollie]

I ran a letting agency for 4 years, I sold it in 2008 when I moved. I used The SouthCourt Property management startup. Google it for the link.
I found it pretty good for the money, the sofware wasn't included in the package when I purchased it. But the website and general advice and templates were all good.
You sould be fine with an excel spreadsheet for a while, I wouldn't spend money on software until you have plenty of properties
Let me know if I can help at all.
Sophie

Thanks for the advise Sophie, I have had a look and it does seem like a good start up package. When you started your lettings business how long did it take you to have 10, 20, 30+ properties on your books and how many did you have after your first year? I'm trying to do a business plan and although I appreciate it is a different market now your experiences will help.

Thanks.

 

[QuickHomeBuyers]

Offer incentives to your local BTL mortgage brokers for bringing in new clients. The problem is most of them will have existing arrangements.

Work your way around.

 

[WardrobeDesign]

Thanks for the advise Sophie, I have had a look and it does seem like a good start up package. When you started your lettings business how long did it take you to have 10, 20, 30+ properties on your books and how many did you have after your first year? I'm trying to do a business plan and although I appreciate it is a different market now your experiences will help.

Thanks.

I did start in 2004 so these figures are from memory. On average I picked up 10 properties per year. It was MUCH harder than I thought it was going to be and nearly 3 years before I made enough money to actually pay myself anything! But by year 4, with about 35 properties I had a steady income. I did live in rural area though so there were less properties to go at, but less competition
My top tips would be
1. The best marketing was word of mouth. Get your name in front of as many people as possible and create a good reputation. Network, network, network. Build a data base of potential landlords, send a monthly newsletter with top tips, FAQ and a list of applicants) waiting for properties (iei MR & MRS B looking for 3 bed house with garage, doesn't have to be a real ;o) . Even if they don't use you this time, there's always next. tell every-one you know and meet. Always ask where you leads come from. I was often suprised where poepl heard of me, but you will need to advertise, and try and make it in the same place regualry so people get used to you being there and know where to find you
2. Stay clear of the poorly maintained properties, if the landlord obviously isn't prepared to spend money to look after it, there will be headaches ahead, and it's really not worth it.
3. Same goes for tenants. Even though to begin with you'll be desperate to fill empty properties and will hear all sorts of sob stories, do not take pity. I had a handful of applicants that were border line, and my gut feeling was NO, however I gave them tenancies to fill the proeprties, and of course they were the ones that gave me sleepless nights down the line by not paying their rent or not taking care of the property.
4. It will be harder than you think to start off with, perseverance is king. If you get to see a prospective property, keep the lead warm, keep in touch with the landlord until they either die or tell you to sod off.
5. Starting off you'll have few if any properties & no tenants. I ran small add in the local press, 2 bed town house to let £400pcm. It didn't actually exist. When people rung up I said it had gone but took their details, and built up a list of people looking, so whe I did get a propoerty at least I had some potential tenants.
6. You will need a website and keep it bang up to date. It's worth spending money down the line later when you can afford it to get some-one to do some seo for you so you'll appear high in google rankings.

I could go on forever, I think I'll write a book! I'm happy to answer any other specifics you might have

Good luck

Sophie

 

[Mr Ollie]

I did start in 2004 so these figures are from memory. On average I picked up 10 properties per year. It was MUCH harder than I thought it was going to be and nearly 3 years before I made enough money to actually pay myself anything! But by year 4, with about 35 properties I had a steady income. I did live in rural area though so there were less properties to go at, but less competition
My top tips would be
1. The best marketing was word of mouth. Get your name in front of as many people as possible and create a good reputation. Network, network, network. Build a data base of potential landlords, send a monthly newsletter with top tips, FAQ and a list of applicants) waiting for properties (iei MR & MRS B looking for 3 bed house with garage, doesn't have to be a real ;o) . Even if they don't use you this time, there's always next. tell every-one you know and meet. Always ask where you leads come from. I was often suprised where poepl heard of me, but you will need to advertise, and try and make it in the same place regualry so people get used to you being there and know where to find you
2. Stay clear of the poorly maintained properties, if the landlord obviously isn't prepared to spend money to look after it, there will be headaches ahead, and it's really not worth it.
3. Same goes for tenants. Even though to begin with you'll be desperate to fill empty properties and will hear all sorts of sob stories, do not take pity. I had a handful of applicants that were border line, and my gut feeling was NO, however I gave them tenancies to fill the proeprties, and of course they were the ones that gave me sleepless nights down the line by not paying their rent or not taking care of the property.
4. It will be harder than you think to start off with, perseverance is king. If you get to see a prospective property, keep the lead warm, keep in touch with the landlord until they either die or tell you to sod off.
5. Starting off you'll have few if any properties & no tenants. I ran small add in the local press, 2 bed town house to let £400pcm. It didn't actually exist. When people rung up I said it had gone but took their details, and built up a list of people looking, so whe I did get a propoerty at least I had some potential tenants.
6. You will need a website and keep it bang up to date. It's worth spending money down the line later when you can afford it to get some-one to do some seo for you so you'll appear high in google rankings.

I could go on forever, I think I'll write a book! I'm happy to answer any other specifics you might have

Good luck

Sophie

Thank you so much for the great advise, we really appreciate it and if you write a book we would buy it.

 

[David A]

Your biggest expense will be advertising.

Your local rag won't cut the mustard, and can be ignored.

Seldom do prospective tenants 'register' their details nowadays and it was only 10 years ago that they'd probably take a day off work doing a tour of agents both registering their details and gathering paper printouts of properties on offer. Doesn't happen now.

The reason for this, which can't be ignored, is the internet. It has changed the lettings market markedly. Thus advertising on property portals is a must, and you can easily spend £750 a month for maximum exposure. To cut costs, you can initially only advertise on one - which has to be Rightmove. As soon as you upload a property, you will get enquiries. This is because prospective tenants will set up e-mail alerts for the particular areas and properties they are interested in. Rightmove isn't cheap though, and it will cost you well over £300 a month.

The internet is visual, and pictures are key. Don't just use a mobile/iphone, but get a dedicated camera. Ideally one with 25/28 focal length equivalent (wider angle) as you can get more of a room in each shot.

Go onto property portals and look at properties in your target business area. I can bet you that you will find properties advertised with no pictures (a big no-no) some with rubbish shots (saw a 4 bed exec house for £1,800pcm recently. The external shot was a car in front of wheelie bins in front of a hedge which was hiding the whole of the ground floor !!!). Take time to make sure your pictures do the property justice - your business will grow from this.

For most internal shots you will need to force flash on - if you don't the pictures will be dull. Put the loo seat down! Think of composition. Take dozens of shots - it's easier to discard extras in the office. Watch for mirrors/reflections (or you'll be in shot!).

 

[Mr Ollie]

Your biggest expense will be advertising.

Your local rag won't cut the mustard, and can be ignored.

Seldom do prospective tenants 'register' their details nowadays and it was only 10 years ago that they'd probably take a day off work doing a tour of agents both registering their details and gathering paper printouts of properties on offer. Doesn't happen now.

The reason for this, which can't be ignored, is the internet. It has changed the lettings market markedly. Thus advertising on property portals is a must, and you can easily spend £750 a month for maximum exposure. To cut costs, you can initially only advertise on one - which has to be Rightmove. As soon as you upload a property, you will get enquiries. This is because prospective tenants will set up e-mail alerts for the particular areas and properties they are interested in. Rightmove isn't cheap though, and it will cost you well over £300 a month.

The internet is visual, and pictures are key. Don't just use a mobile/iphone, but get a dedicated camera. Ideally one with 25/28 focal length equivalent (wider angle) as you can get more of a room in each shot.

Go onto property portals and look at properties in your target business area. I can bet you that you will find properties advertised with no pictures (a big no-no) some with rubbish shots (saw a 4 bed exec house for £1,800pcm recently. The external shot was a car in front of wheelie bins in front of a hedge which was hiding the whole of the ground floor !!!). Take time to make sure your pictures do the property justice - your business will grow from this.

For most internal shots you will need to force flash on - if you don't the pictures will be dull. Put the loo seat down! Think of composition. Take dozens of shots - it's easier to discard extras in the office. Watch for mirrors/reflections (or you'll be in shot!).

Thank you David, We really appreciate the advise, are you in the lettings business?

 

[Mr Ollie]

We have been advised to create a limited company, can we do this ourselves or do we need to use a legal professional/accountant? How much does it cost? and is this the best thing to do?

 

[bwhomeresponse]

you can do this yourself online, its about £18 from memory. you must then be prepared for an initial onslaught of people offering their services, then requests from the taxman for paye info and corporation tax. all these things however do not outweigh the benefits of being a ltd company. do not forget public liability insurance as a minimum. bw home response.

 

[sanjiv]

Probably best to use an accountant or formation agent.

 

[Mr Ollie]

Probably best to use an accountant or formation agent.

Thanks Sanj, What is a formation agent??

 

[sanjiv]

They form the company for you and take care all of the paperwork and sometimes can even provide you with a virtual address and help setting up a bank account etc.

I can't recommend any but you can google company formation agent or have a look around the forums as I'm sure they will have been mentioned.

 

[Mr Ollie]

Does anyone know of any relevant courses or qualifications we can take to enhance our knowledge and prepare for any hurdles that may come our way?? And costs involved??

 

[QuickHomeBuyers]

Does anyone know of any relevant courses or qualifications we can take to enhance our knowledge and prepare for any hurdles that may come our way?? And costs involved??

Is there a reason you want to chose this business? Most people who successfully run this business are people who have had experience themselves. I am not discouraging you, just food for thought?

Do you currently own any properties? Excluding your home?

 

[Grafika]

Hi there Mr Ollie

I don't have a wealth of advice to offer but reading your post just reminded me of the kinds of questions I was asking when I was starting up this type of business. I got everything ready, purchased the lettings package; thinking I could make this work. Having owned a tenanted property I thought I could branch out and expand this line of work. I got everything ready, the software, the website, the name, stationary etc and I was ready to go. Around two months later I jacked it in. The reason being I realised that even though I had everything logistically sorted out and had properties on my books (although none let) and tenants I just didn't have the passion and drive for the work. I found it very boring. I'm not saying it is boring work, it just wasn't for me. I guess what I'm saying is; you can look at the business planning side of things and how you will pick up proerties but the first thing I would suggest is checking out is 'do I have a passion for this type of work?' It can be very tough and I think unless you have real passion and drive to keep going in an extremely competitive market it can feel like flogging a dead horse. Of course, if it's something you REALLY want to do then that passion and drive should push you to get out there and go for it.

I'm not saying that this will happen to you - many many people make successes of their lettings companies. I'm just saying, ask yourself the question. This is of course true in setting up any kind of business.

You know it's wrong when on a Saturday you're hoping the phone will ring and it'll be your tenants/landlords saying that they can't do that Saturday viewing after all

 

[Mr Ollie]

Is there a reason you want to chose this business? Most people who successfully run this business are people who have had experience themselves. I am not discouraging you, just food for thought?

Do you currently own any properties? Excluding your home?

We currently have 2 of our own properties and have succesfully managed these for a couple of years and have been asked by others to help them so thought we could make this a business.

 

[QuickHomeBuyers]

I have asked in the feedback forum to get a new property sub forum but they are not interested hence google. But strat with ARLA and see if you qualify for RICS. I am working towards the rics goal.

 

[TODonnell]

We do company formations as part of our virtual office service. Companies House make setting up a company very easy. After that, you all you need to watch are your submission deadlines or you can be fined.

Other than that, it's fairly easy if you're IT literate and not scared of Googling technical terms. The submissions are online, nowadays and HMRC and Companies House kind of walk you through them.

 

[Mr Ollie]

Hi there Mr Ollie

I don't have a wealth of advice to offer but reading your post just reminded me of the kinds of questions I was asking when I was starting up this type of business. I got everything ready, purchased the lettings package; thinking I could make this work. Having owned a tenanted property I thought I could branch out and expand this line of work. I got everything ready, the software, the website, the name, stationary etc and I was ready to go. Around two months later I jacked it in. The reason being I realised that even though I had everything logistically sorted out and had properties on my books (although none let) and tenants I just didn't have the passion and drive for the work. I found it very boring. I'm not saying it is boring work, it just wasn't for me. I guess what I'm saying is; you can look at the business planning side of things and how you will pick up proerties but the first thing I would suggest is checking out is 'do I have a passion for this type of work?' It can be very tough and I think unless you have real passion and drive to keep going in an extremely competitive market it can feel like flogging a dead horse. Of course, if it's something you REALLY want to do then that passion and drive should push you to get out there and go for it.

I'm not saying that this will happen to you - many many people make successes of their lettings companies. I'm just saying, ask yourself the question. This is of course true in setting up any kind of business.

You know it's wrong when on a Saturday you're hoping the phone will ring and it'll be your tenants/landlords saying that they can't do that Saturday viewing after all

Thanks for the comments and we have taken what you said on board. We are commiting a lot of time and money into this and are very excited about the future. We will be fully prepared and know it will take a lot of hard work and commitment to make this a succesful business but we think we have what it takes.

 

[Mr Ollie]

Hi there Mr Ollie

I don't have a wealth of advice to offer but reading your post just reminded me of the kinds of questions I was asking when I was starting up this type of business. I got everything ready, purchased the lettings package; thinking I could make this work. Having owned a tenanted property I thought I could branch out and expand this line of work. I got everything ready, the software, the website, the name, stationary etc and I was ready to go. Around two months later I jacked it in. The reason being I realised that even though I had everything logistically sorted out and had properties on my books (although none let) and tenants I just didn't have the passion and drive for the work. I found it very boring. I'm not saying it is boring work, it just wasn't for me. I guess what I'm saying is; you can look at the business planning side of things and how you will pick up proerties but the first thing I would suggest is checking out is 'do I have a passion for this type of work?' It can be very tough and I think unless you have real passion and drive to keep going in an extremely competitive market it can feel like flogging a dead horse. Of course, if it's something you REALLY want to do then that passion and drive should push you to get out there and go for it.

I'm not saying that this will happen to you - many many people make successes of their lettings companies. I'm just saying, ask yourself the question. This is of course true in setting up any kind of business.

You know it's wrong when on a Saturday you're hoping the phone will ring and it'll be your tenants/landlords saying that they can't do that Saturday viewing after all

Hi Grafika,

What software/lettings package did you use and do you recommend it??

Does anyone else have any useful information or recommendations on software packages to purchase?

Thanks Ollie

 

[Property Angel]

As the founder and owner of a property lettings agency I would have to say

Seriously are you sure?

I am mammothly concerned by your predicted budget of £200 for a software package. We have cfp and it cost £3.5k.

If that's your anticipated budget for critical software (which you will need to ensure your accounts are right) then what is your budget for marketing?

Being on the portals costs c. £1k per month

I could go on and on...

The ONLY reason I set up my agency is because I have a big portfolio and it was intended to manage mine, and then some other big landlords also came along and so we grew. To this day, we may have high st premises but we are mainly a "trade outfit" that is portfolio landlords come to us as they understand I am one of them and they like that.

I don't want to put you off. But seriously, you need to have so much passion for people and property it is unreal.

I live and breathe property in all that I do (still an active property investor and developer) but truly, truly running an agency (which I employ staff and managers for) even tests my devotion

If you think you can get rich quick, get out

If you think this is going to be fun, think again

 

[Jackie606]

Very Good advice!

I have been investing in property for ten years, I also source and buy for my expat clients after working in investment advisory with clients offshore for ten years... I eat, sleep and breath property and clients and doubt I could manage my business and lettings if I did not.... its a job, a hobby and a way of life... you have been warned! LOL... good luck

PS. as if you needed anymore reality checks...I estimate it cost 75k to get through the first year... no branch, just serviced office, but there is a a heck of a lot of marketing and systems needed

As the founder and owner of a property lettings agency I would have to say

Seriously are you sure?

I am mammothly concerned by your predicted budget of £200 for a software package. We have cfp and it cost £3.5k.

If that's your anticipated budget for critical software (which you will need to ensure your accounts are right) then what is your budget for marketing?

Being on the portals costs c. £1k per month

I could go on and on...

The ONLY reason I set up my agency is because I have a big portfolio and it was intended to manage mine, and then some other big landlords also came along and so we grew. To this day, we may have high st premises but we are mainly a "trade outfit" that is portfolio landlords come to us as they understand I am one of them and they like that.

I don't want to put you off. But seriously, you need to have so much passion for people and property it is unreal.

I live and breathe property in all that I do (still an active property investor and developer) but truly, truly running an agency (which I employ staff and managers for) even tests my devotion

If you think you can get rich quick, get out

If you think this is going to be fun, think again

 

[susanburston]

I totally agree with everything sjcollett said, I opened my estate / letting agents April 2006 back then it was £300pm for advertising with rightmove, now I pay £600, and an agent that started up last year pays £800 per month, thats just for rightmove. I must say that I loved the job I done when I first started up as I was involved in on the ground floor so to speak, but it was hard and the managed lettings properties didn't come easy! The last two years have been a killer, I'm still here, but due to personal problems have had to take a back seat and NO ONE works as hard as you do, I'm now doing my best to push my company and get more business - but its hard! I love it but if your just in it for the money forget it unless you have a team of professionals and lots of money behind you to begin with. Good Luck.

 

[susanburston]

Hi I don't know if I'm too late or not, but I use Universal software for both sales and rentals, there was no up front fees when I joined and the monthly fee is very reasonable, I think you can do rentals only also for an extra fee of about £20 per month they provide the financial rentals management side of it so you can check rental payments in from tenants and out to landlords, much easier than excell sheets and very reasonable.

 

[David A]

Hi I don't know if I'm too late or not, but I use Universal software for both sales and rentals, there was no up front fees when I joined and the monthly fee is very reasonable, I think you can do rentals only also for an extra fee of about £20 per month they provide the financial rentals management side of it so you can check rental payments in from tenants and out to landlords, much easier than excell sheets and very reasonable.

Sadly, for software that is so critical, I would have to urge caution.

Firstly the firm appears to be a sole trader, but the main website of www.thesaurus.org.uk does not indicate who the proprietor is. Also (presumably as the others have been registered already) he is using a non-profit suffix rather than business. Looking up a website registry for this site bring up:

Domain name: thesaurus.org.uk
Registrant: Stephen Whitlam
Registrant type: UK Individual
Registrant's address: The registrant is a non-trading individual who has opted to have their address omitted from the WHOIS service.

This is a cloud-based system. I am most cautious of these as I used one for some ancilliary work (that thankfully was not too critical) - they didn't pay their hosting fees and the site went down. There was no facility for external backup and within days the company went belly up. I see no facility for external backups with this company - so you have to ask how you'd survive as a business if one morning you suddenly found that you had permanently lost access to your data.

 

[susanburston]

I understand your caution and yes something does sound fishy, but I can only speak as I find and have been using their system since opening my small business in April 2006 and always found them to be very helpful. I use the office based system and back all my data up once a week, so they do not host or have any of my data - the portals are uploaded directly from my server(main computer) and my website is not hosted by thesaurus.

 

[theGuy]

A great thread.

For those who run and have setup a lettings agency..What would you say are the average number of properties you took on in the first year on a monthly basis?

Is 12 too less or too many would you say?

 

[VSpy1]

Can anyone recommend any computer software that's suitable for a lettings agency to store records, documents and data etc relevant to the lettings industry?

Thank you in advance for any advice, much appreciated.

Have you tried DOMUS? About £99 + vat per month - but does it all - including live feeds to all the portals...

 

[VSpy1]

A great thread.

For those who run and have setup a lettings agency..What would you say are the average number of properties you took on in the first year on a monthly basis?

Is 12 too less or too many would you say?

It depends on your location, but unless you make some good contacts - developers, local landlords etc - think I think you might struggle to sustain a minimum of 12 every month for your first year... but reputation is everything in the lettings game as Im sure you're aware