Adding to your offerings is the best way to combat the Lettings Fee Ban…
IT’S now been confirmed that the Tenant Fees Bill (or Tenants Fee Ban to give it its more well known title) will come into affect on 1st June 2019 (applying to all tenancies signed on or after that date). With lettings’ agencies preparing to take a big financial hit (49% of agents Fixflo surveyed expected to lose between 10-30% of their revenue), now’s the time to start amending your business model to offset the hit. One way of doing this is to increase the services that you provide, for example offering optional extras or broadening your portfolio. Here are three simple suggestions that could make a big difference to your revenue stream this year:
1. Go all-inclusive
All-inclusive isn’t just for package holidays – savvy agents are now making it a key part of their rental offerings. Parcelling additional costs like utility bills, council tax, cleaning, gardening or the internet into one comprehensive package saves tenants a lot of admin and the associated stress, which makes it popular with young professionals and sharers. For agents it’s a way to increase revenue. By offering various levels of inclusivity for a sliding scale of fees, agents can make sure this value add works for their agency, as well as the tenant. It’s important to point out that agents must stress their all-inclusive packages are only optional and tenants that would prefer to pay their bills separately will not be discriminated against.
2. Offer insurance
Under the Tenant Fees Bill, agents will still be able to charge a commission for selling insurance to tenants before the tenancy commences (in this instance either contents or tenants liability insurance). Additionally, if you have a relationship with your own suppliers, you could also be eligible for a referral fee too. But, just as with offering to source tenants’ internet and additional services for them, it’s vital that agents make agents aware this service is an optional one, rather than a condition of their tenancy contract.
3. Expand your offering
In a worse case scenario situation, agents that purely offer lettings may find themselves unable to survive without the tenants’ fees, even including the optional extras they’re adding. To protect yourself against this situation, why not consider diversifying your portfolio? Expanding into property management as well as lettings is the obvious additional revenue stream, but really forward-thinking agents should look at block management. In addition to being a good fit with your existing portfolio, block management is famously secure (it was virtually unaffected by the 2007 financial crash). And as more more millennials opt to rent rather than buy, blocks are on the increase, making block management the perfect way to make sure your business doesn’t just survive the Tenant Fees Bill, it thrives as well.
For more information about how to combat the Tenant Fees Bill, download our FREE E-book ’10 Ways to Survive the Tenant Fees Bill’ by clicking the image below.