IN our previous blog, we talked about the small additions to their portfolio that lettings agencies could make to offset the impact of the Tenant Fees Act when it comes into effect on 1st June 2019. After this date, all admin charges and many other compulsory fees will become illegal and letting agents will no lose a large percentage of their operating income.
A lot has been written about the Bill and the effect it’s going to have on the industry, but with 41% of Fixflo’s agents believing that the tenant fees ban is going to be the most significant challenge for 2019, it’s worth continuing to look at ways agents can offset its impact.
The good news is that most agencies will already have the tools they need to do so, meaning that with proper planning you can mitigate the worst of the effects of lost income. Here are five ways to utilise existing skill-sets and services to maximise your revenue and minimise the effects of the tenant fee ban:
1. Keep existing tenants happy
One of the greatest concerns about the Tenants Fee Act 2019 is that by making lettings fees illegal, the Act will enable tenants to move more frequently, increasing periods between rentals that properties lie empty (creating no revenue for landlord or agent). But if agents work hard to increase their reactivity and reduce their repairs time, they could find tenants happy to stay put. Advising landlords to relax some of the more traditional rules and consider letting tenants keep pets or redecorate more comprehensively is another way to increase the duration of a tenancy.
2. Educate your landlords
Many landlords are completely unaware of the amount of free services agents carry out for them. Letting landlords know exactly what services your business provides for them will help them see the value add of an agent and should also provide the right environment for them to consider expanding your services. Converting a lettings-only landlord into a managed property (or even just adding on rent collection as an extra paid service) is a simple way of increasing revenue without adding to your costs.
3. Staff training
Investing in staff will decrease staff turnover, something that can be a drain on profit. Enhancing staff skills has an added benefit for your agency as well – not only will they provide better client service, but training staff will allow them to broaden their skill-set and give you the potential to expand into additional areas of revenue, such as block management or insurance sales.
4. Consider automation
Automating some of your services (such as repairs) through software like Fixflo will free up manpower and allow you to expand your portfolio without having to increase your headcount. Services like repairs reporting or engaging contractors can be managed easily and the portal also creates a paper trail, which protects you in case of any issue or dispute. As industry regulations tighten and compliance takes on a new focus, automated records are becoming invaluable in the struggle to stay compliant.
5. If all else fails, put up the rent
Fixflo’s research indicates some agents and landlords are planning to pass on the lost income as a result of the Tenant Fees Act by putting up rents. While the market is stabilising, due to the low levels of houses for sale and the lack of house building, putting up rents is a risky strategy and one that should only be pursued in line with the market in your area.
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.