BLOG: Time to ‘turn detective’ on your landlords, says expert

As a letting agent with a portfolio of properties to look after or an estate agent considering expanding their business to include a letting side there are opportunities to build a service that offers greater rewards to landlord customers while also increasing revenue streams.

In order to offer client landlords an improved service beyond the nuts and bolts of letting and managing properties, agents should consider the interaction they could have with their clients and show them how proactively obtaining more data about how they operate and their plans for their property investment can lead to greater rewards for both sides.

FORENSIC LEVEL

First off, get to know your customer on the most forensic level. This may seem an obvious statement but portfolio landlords can be complex and more often than not they will also be property entrepreneurs and involved in multiple businesses.

Their financial profile is likely to extend beyond basic income statements so you will need to familiarise yourself with all of their businesses so there are no surprises.

Search Companies House. If there are any struck-off companies that are linked to your client it’s better you know at the outset by asking questions first. Lenders will be looking but often there are reasonable explanations, such as being dormant companies set up for a purpose but then never used.

Income is less relevant in the specialist world.”

Income is less relevant in the specialist world but request the SA100 and limited company accounts for any buy-to-lets. It will help you with the business plan as some lenders will ask for previous years’ rental income and costs – if properties are owned in the individual’s name this can be found in the SA100 or company accounts if owned in a limited company.

Putting this effort in now could reward you with multiple mortgage opportunities within the year where all the income documents will already be valid and on your file.

ACCURATE DATA

Next up, prioritise accurate data. It is vital to engage with your landlord clients to get an up to date and accurate picture of their property portfolios.

It ensures that you have a handle on every property, including accurate rents, values and mortgages to include in your analysis.

If you are going to provide the right advice it is a critical stage in the process. Outdated and inaccurate portfolio data hinders effective analysis and informed decision making.

One massive benefit is you can now start tracking all of the mortgages. So, spending a little time and extra effort at the start will lay solid foundations for future advice.

LONG-TERM STRATEGY

You also need to understand your landlords’ longer-term plans and strategy.

Over the years I have seen and helped many landlords change the structure of their portfolio, not necessarily from bad previous advice but a lack of communication at the advice point.

It’s important to move beyond transactional mindsets.”

It’s important to move beyond transactional mindsets and embrace the role of a trusted adviser. Understand your client’s long-term vision, encompassing renovation plans, portfolio expansion and potential corporate structuring.

For instance, is your landlord looking to improve the property in the short term to add value? If so, locking into a 5-year fixed mortgage with no ability of a further advance or second charge would be restrictive.

PROPERTY PORTFOLIO

Is your landlord looking to build a property portfolio? Advice on buying in a company structure versus owning in their names is very important.

Is your landlord saying they will buy cash and remortgage after purchase? Remember some lenders have a six month rule of ownership. If your landlord is buying for cash and improving the property, retain the receipts and invoices as some lenders will want evidence to use market value within six months.

By anticipating landlord needs and proactively addressing them you can build a foundation of enduring loyalty and a mutually prosperous relationship.

Marc Randall is Chief Executive of Property Circle