Expanding into block management is one obvious way that today’s stretched letting agents can utilise their existing skills to diversify their portfolio. But despite the obvious benefits – not only does block management provide an additional stream of revenue it also offers the possibility of targeting the residential units inside for management opportunities - becoming top of the blocks isn’t as simple as it seems.
As we explore in our eBook, Block Management: a Great Opportunity for Letting Agents?, agents need to really consider their skillset and decide whether block management is actually for them, before they look into accessing the market.
What skills do you need?
Knowledge of the law
If your team doesn’t have a detailed knowledge of property law, contract law and some understanding of the laws relating to trust funds, you’re going to need access to legal advice to ensure you don’t get stung by block management. The additional layer of leaseholders who may or may not be tenants adds a number of complicating factors to the traditional landlord/tenant relationship.
In an ideal world, every unit in the block would be on the same payment schedule. But the reality is most blocks will have different payment schedules of different amounts. Hiring block managers with accountancy or finance qualifications is the best way to handle this issue.
The importance of planning
A decent block manager lives and dies by planned maintenance. This schedule of works should be a detailed analysis of the works the building requires to keep it in good order and improve it, as well as the costs involved. Once it’s been prepared it needs to be signed off by the client, so ideally a block manager should have good sales skills too.
The right software
Whether you’re running a single block or multiple blocks, having the right software will make your job infinitely easier. Block management software will allow you to set out your entire portfolio in dashboard format so that you can see what’s coming up across the properties. It should also provide you with a performance and compliance matrix to ensure you’re up to date with all legislation and that you have contractors that you can contact at the click of a button.
What’s the best way to start growing your block management business?
Maintaining a strong, up-to-date website with client testimonials and evidence of local and legal expertise is key. You need to convince block landlords – often companies or corporations – that you have the manpower and the professionalism to handle large projects. Being in the rental market already is a definite advantage and you should make sure you leverage your contacts across the market. Don’t be afraid to let clients and contacts know you’re expanding your portfolio – word-of-mouth is invaluable here. And finally, don’t be tempted to run before you can walk. Block management is a lot more complicated than it looks and while it can be tempting to take on multiple projects, entering the market slowly and finding your feet first is the best way to establish yourself.
For more tips, download our Block Management: a Great Opportunity for Letting Agents? by clicking here or below.