Which chores do you hate the most or simply don’t have time for? Cleaning your car or ironing work shirts? Many of us don’t think twice about getting someone else to carry out tasks so we don’t have to, mainly because we’d prefer to be doing something more important or fun. As well as saving time, an outside professional will inevitably do a much better job thanks to their experience, skills and equipment.
In fact, asking someone to complete a job on your behalf is second nature – especially when we want something done well or in super-quick time – but as soon as you label delegation as outsourcing and give it a professional slant, the mood often darkens.
Despite what some may think, outsourcing part of your business is not a sign of weakness and it doesn’t represent a loss of control either. Quite the opposite, especially when it comes to property management.
Many of our clients have been able to increase their fees to landlords because of the additional services that we offer as standard, such as 24/7 emergency maintenance helpline. Tim McGlashan, ARPM.
More letting agents than ever are trading up from let-only and as Tim McGlashan from ARPM Outsourced Lettings Support highlights, it’s vital for an agent to offer property management as it’s the best way to retain income from a landlord relationship. Newcomers and old hands, however, are discovering this increasingly compliance-driven sector is a drain on resources – with financial penalties and even imprisonment for slip-ups. So in the same vein as calling in the professionals to remove, say, a wasp nest, outsourcing the most specialist and time-consuming aspects of property management is a sensible idea – getting the job done with minimum risk.
Outsource to earn more
While outsourcing can become natural extension of your own set up – think of it as another branch staffed with professionals who are up-to-speed with regulations – the common misconception is that it’s an extra expense eating in to income.
Agents working with ARPM are finding that the reverse is true, with an outsourcing proposition that can be marked up to make a profit. “The pricing at ARPM is done on a case-by-case basis so that it can be a cost-effective solution – outsourcing would never work if we were to take the lion’s share of the revenue generated from each managed property,” adds Tim.
ARPM’s clients also benefit from a flat fee-charging model, which means their costs increase and decrease in line with their portfolio. “It’s a scalable option to assist a growing business, granting ultimate flexibility and ensuring not a penny is spent needlessly.”
Offer more, charge more
Outsourcing to a property management specialist also allows agents to offer services they would never have the in-house skills or capacity to run themselves.
“We have many clients who have been able to increase their fees to landlords because of the additional services that we offer as standard, such as manned 24/7 emergency maintenance helpline,” adds Tim. “On average, those partnering with ARPM are offering three to five extra services, leading to increased income streams.”
Piggyback your way to brilliance
We’ve touched on the compliance-heavy aspect of lettings, and with hundreds of rules and regulations to implement – and news ones being released all the time – great onus is on letting agents to manage legally compliant lets.
It’s easy to drop the ball, if you’re under resourced, overwhelmed with properties or new to management. Outsourcing is a shining light when it comes to the legal burden of lettings as outside suppliers ensure staff undertake regular training, execute best practice and keep up-to-date with complex legislation.
“Part of ticking every box and navigating red tape is having the specific software to handle managed portfolios – a support system that complements our highly-skilled staff,” adds Tim. “Companies including ARPM have tried, tested and invested in tech so agents don’t have to. Our set-up ensures every let we manage is legally sound through smart automation, backed up by hands-on professional diligence.”
Solutions to conundrums
Having a dedicated team whose focus and expertise is property management also saves an agent having to train and recruit in a specialist field. Tricia Brannagan at Lets Help says that there’s a very small talent pool. “Agents say good property managers are hard to find with a high turnover and a haphazard service – the main reason they outsource to us.”
Many agents tell us that good property managers are very hard to find – with a high turnover and a haphazard service – it is the main reason they outsource to us. Tricia Brannagan, Lets Help.
Tim also feels that outsourcing is an alternative recruitment solution, “Delegating to a third-party works well when staff leave or there is natural wastage, particularly if there is not enough work for a full timer or the portfolio fluctuates. It can make it difficult to budget for a set wage but outsourcing usually operates on a ‘pay for what you use’ basis, for better financial planning.” Outsourcing also allows agents to avoid the productivity hit associated with new recruits, as partner teams tend hit the ground running, without an output lag or a ‘get up-to-speed’ stage.
Staffing standards across outsourcing companies are generally very high. A large tranche of Tricia’s team have worked in lettings departments, and employees study for the Level 3 qualification in Lettings and Property Management while employed. There is also strength in numbers when outsourcing – no dips in service levels if someone calls in sick and no worries about covering annual leave.
A cost-effective route to memberships
Outsourcing allows agents to tap into their partners’ professional associations. With memberships including ARLA Propertymark, The Property Ombudsman (TPO) and The Deposit Protection Service (DPS), outsourcing to existing members saves agents time and expense.
“If agents use Lets Help under our brand, they can advise clients that we are ARLA Propertymark members and they benefit from the membership, with client money protection, staff training and compliance updates,” says Tricia.
Even if an agent uses a white label service, there will still be time and money savings via outsourcing, she adds, “If an agent using a white label property management service wants to advertise ARLA Propertymark credentials, they need to do so under their own brand but as long as they word their terms of business and tenancy agreements correctly, they will not need to provide ARLA with an end-of-year accountants report. With Lets Help, they will be covered under our reporting system and this saves them the accountants cost and legwork.”
Outsource companies including Lets Help also save agents being members of TPO, as long as they advise TPO that they outsource lettings. Although the custodial DPS is free of charge, an outsource provider can set the service up and administer the deposit aspect on an agent’s behalf.
White label: insert your name here
There is no denying that involving a third-party supplier leaves some letting agents uncomfortable. If your agency brand is strong and you’ve always provided an in-house service – perhaps trading on this fact – outsourcing can feel a bit of a fraud.
Those who realise they need specialist help can find a happy compromise in the a white label service – when all communication to tenants and landlords is branded with the agents’ name and livery, despite it being administered by an unrelated company.
While a white label agreement is a practical solution for property management integration, some agents may question an outsource partner’s ability to be seamless and convey its own style of business practice and personality.
A thorough discovery phase at the start of an outsource agreement is vital so an agent’s values are maintained and clients don’t notice a different supplier. “We usually establish service level agreements and key performance indicators to help us measure and maintain expectations on both sides,” says Deepak Chandrababu at Technology Blueprint Ltd.
A thorough discovery phase is vital. We usually establish service level agreements and key performance indicators to help us measure and maintain expectations on both sides. Deepak Chandrababu, Technology Blueprint.
Going that step further, however, Deepak acknowledges that company styles as well as service levels need to be adopted – a process he describes as ‘seeking to act as the letting agent, not just for them’. “We always enter a period of engagement with our clients that goes beyond simply documenting the processes we follow so we actually bring people and teams cultures together,” even if it is a remote exercise.
Celebrating the outsource factor
Perhaps it is the distance between departments and removed aspect that weighs heavy on an agent’s mind but Deepak stresses that in lettings, the location of the person dealing with the enquiry is not as important to a tenant or landlord as it is the agent: “For the end user, it is the quality of the service – often assessed in the level of information at someone’s fingertips; the amount of accountability and the ability to help resolve the issue, which is key.”
Agents should have confidence that people are not bothered whether the service comes from branch or a centralized location – or if it’s delivered by a direct employee of the agent or a third party. Landlords and tenants simply want solutions.
In fact, Deepak says agents don’t have to keep outsourcing a secret. “In our experience, concerns about ‘giving the game away’ if a third-party supplier is unmasked are misplaced. We all know that international and national call centres are pretty much the same, and that out-of-hours enquiries are often handled by team members who are not in the local branch, or even employed by the company. What matters most to almost everyone is the service provided.”