Money for nothing?
Agents may be enjoying a mini boom at the moment, but dark clouds are looming. The good news is they can earn extra cash from sales and lettings – sometimes without lifting a finger, says Richard Reed.
But as Covid infection rates rise again, the storm clouds are gathering. The UK is already predicted to go into recession next year, with the number of jobless set to double by the end of this year to 2.5 million people. That’s without any more lockdowns.
Nationwide has reported house prices rising at their fastest rate in 16 years – but it’s a different story for 2021, with a predicted fall of 14 per cent, according a report from the Centre for Economics and Business Research.
Arguments rage about whether the Government is overreacting, with no rise in hospital admissions or mortalities, but the latest restrictions show the Prime Minister is bent on a policy of trying to contain the virus, rather than live with it.
So what can agents do to bolster their income in such uncertain times? The answer is quite a lot – sometimes without even lifting finger. By referring clients to suppliers such as utility providers, broadband companies and even removers, agents can make a sizeable chunk of commission.
Here are some of the key areas where you can boost revenue.
Deposit alternative scheme
In a new solution to the challenge of tenants finding the cash to pay for a deposit, Flatfair offers an upfront non-returnable fee-based system that will help landlords install new tenants quickly and easily.
Instead of a traditional deposit, tenants only pay a small check-in fee worth one week’s rent. That means empty properties can be let without delay, meaning more cash in the bank for both parties.
At the end of a rental period, any charges for damages are assessed and deducted by Flatfair directly from the tenant’s bank account.
“Flatfair’s No Deposit solution streamlines the rental process for all parties involved, especially agents,” says CEO Franz Doerr. “Our cutting-edge technology means it is possible for agents to set up a new tenancy in just one day.
“Onboarding and training with Flatfair is done entirely through our website. Agents are able to upload standard documentation, such as references and tenancy agreements, in a matter of minutes. All parties are given access to Flatfair’s online portal, where everything is stored.”
Agents are also able to use the online portal to track and manage every element of the Flatfair process – from selling and signing documents to handling move-outs.
“In addition to offering competitive commission rates, Flatfair also provides agents with a competitive advantage in that properties offering deposit alternatives let up to 25 per cent faster than those offering security deposits only,” adds Doerr.
Tenant referencing
Vouch focuses on offering a technology-based tenant referencing system, but also works with a range of providers to arrange services such as rent guarantee insurance, general tenant insurance, landlord buildings and contents insurance, gas, electricity, broadband and cable.
“We just fully automate those services the agent wants to plug in at the back of it and basically take away all the work for them but still pay them commission off the back,” says Simon Tillyer, director at Vouch.
You can quite easily earn £300 per property. With rent guarantee you should be earning at least £100 per policy, Sky and Virgin are paying £50 a time. Simon Tillyer, Vouch.
The tenant-referencing service is totally automated and costs just £5 per let, compared with an industry average of £18 to £22. “It’s a massive cost saving for agents right from the start,” he says.
“Then, by the time they’ve accepted their reference, we will automatically put quotes in front of tenants, ask if they want to have a look at any deals and fire things out to landlords, saving agents all the time and hassle not only of finding and sourcing the best suppliers but also around admin, remembering to do all those jobs.
“Because we are working with these suppliers and we are sending them 20,000 leads a month, we’ve got a great deal set up, so we are probably able to pay more than they would get going direct to the supplier.
He adds, “You can quite easily earn £300 per property that goes through the system. With rent guarantee you should be earning at least £100 per policy, any utility you get £20 per service, Sky and Virgin are paying £50 a time.
“It’s not just about giving the tenant a new supplier and the agent a new income, it’s about saving a lot of time and hassle around the notification service, so we will inform the council, [together with] gas, electric and water providers, who is moving in, when they are moving in – it’s a huge time saver.”
Tillyer says given Covid and the current ban on evictions, the product of the moment is rent guarantee insurance.
“Agents are now realising it’s a key service that isn’t really an optional extra any more, landlords expect it. A lot of landlords have been caught out by what’s happening at the moment – you can’t get a tenant out of the property and those guys are just losing out.
“Anybody who had insurance is actually covered and getting paid.”
Vouch’s own policy, which has no Covid restrictions, is proving highly popular even though the price has nearly doubled from £105 to £199 per property per year.
Tenant referencing
HomeLet is the UK’s largest tenant-referencing firm and has been one of the market leaders in the lettings industry for more than 25 years.
“There’s nothing we haven’t seen, so you know you’re dealing with experts,” says Chris Turner, HomeLet’s head of account management.
“It’s our mission to make sure we offer the right products and services to our customers – which in turn allows our agents to increase their revenue opportunities.”
HomeLet’s team of highly-trained referencing staff start by reviewing a potential tenant’s financial and residential history. “This is the first line of defence for agents, and it’s never been more important to have a full understanding of your tenants,” he says, “then it’s as simple as switching our customers on for our range of products and services, and we take care of the rest through our expertly developed contact programmes.”
Services include rent protection, a void utility and notification solution, insurance for tenants and landlords, media services from Sky and Virgin, removals and utility switching.
“There’s never been more ways for agents to generate income,” adds Turner. “Agents can choose the products that best suit their business – either utilise the full suite or select which are the best fit. We’ll also help customers to seamlessly integrate them into their business.”
Removals
A relatively new arrival in the commission-earning arena, at least on a large scale, is removals. Some utility service providers offer removals as part of their package, but Pickfords – founded in1646 and one of the world’s oldest removers – cuts out the middleman.
Pickfords offers a revenue-sharing scheme, paying five per cent of the removals cost to the agent. With an average move costing £1,400, that’s about £75 a time.
And it’s not restricted to property sales – the firm is seeing more and more customers from the higher-end rental market, too.
If you are completing on 20 properties per month, 35 to 40 per cent come through to us and we tend to convert half of them, so you’re probably seeing a good £200 to £300 a month. Adam Wilding, Pickfords.
Agents simply fill in a web form on behalf of a mover, or they can send a link to the customer to complete. The whole process is co-branded with the agent.
“If you are completing on 20 properties per month as a small agent, 35 to 40 per cent come through to us and we tend to convert half of them, so you’re probably seeing a good £200 to £300 a month,” says Pickford’s national sales manager, Adam Wilding.
“What we tend to find is that where the agents actually hand-hold the customers through to us the conversion rate is significantly higher.”
Historically, says Wilding, the problem was that agents didn’t always trust removers enough to recommend them. “With Pickfords you get a removals company that is the biggest in the UK, backed by 4.5-star Trustpilot reviews.
