Do I set up a new Agency or Inventory business instead of investing in property directly?

by Readers Question

12:31 PM, 5th November 2014
About 4 years ago

Do I set up a new Agency or Inventory business instead of investing in property directly?

Make Text Bigger
Do I set up a new Agency or Inventory business instead of investing in property directly?

Have been browsing here for a while, but havent written anything yet. I’ve been a landlord for 5 years, just 3 properties so far, but now doing it full time as recently lost my job.

I have a bit of redundancy money to invest, and because there’s so much new legislation proposed, and changes to letting, I’d like to hedge my bets instead of just buying another property to rent out.

Would I be better off using my landlord experience (I’m NLA and RLA accredited) and investing in a franchise or a licence to start my own online letting or property inventory business? I’m finding it hard to get another job as there’s just so many applicants, all much younger than me. I live in London so should be enough business.

Have any Property118 members done this, or know anyone that has?

Thanks

Callieroulette



Comments

Mark Alexander

12:38 PM, 5th November 2014
About 4 years ago

Hi Callie

Have a chat with Tony Sheldon at Letting Supermarket. You should be able to find them easily enough with a Google search 🙂
.

Kevin Eggleton

13:33 PM, 5th November 2014
About 4 years ago

Hi Callie. I have been an inventory provider for a number of years and looked recently at starting my own letting agency because I have seen so many bad ones. However I decided against it because of all the new legislation.
I joined Letting Supermarket as a Local Agent and I now look after number of properties for them in the South West.
I suggest you have a chat with them as they have a good number of properties in London.

Good luck

Steve From Leicester

14:09 PM, 5th November 2014
About 4 years ago

Hi Callie,

I did it.

Eleven years ago I walked away from an 18 year career with BT (I didn't get made redundant, I just reached the point where I was so unhappy with my job that I needed to move on). I bought a property lettings franchise and launched from a cold start.

I've often said that if I'd known how hard it was going to be I probably wouldn't have done it . . . . but I'm really glad I did.

Nowadays I run a business with two offices, fourteen staff and turnover north of half a million quid a year. Career-wise it was the best thing I ever did, but by heck it was hard work getting it off the ground.

If you're seriously thinking about it and would like to have a chat with me ask Mark to give you my email address (I presume he has it from my log in details) and ping me an email.

Steve

Akin Adeyemo

15:11 PM, 5th November 2014
About 4 years ago

Reply to the comment left by "Steve From Leicester" at "05/11/2014 - 14:09":

Hi Steve,
You mentioned you bought a property lettings franchise, could you please be more explicit on this and how does it work?

Steve From Leicester

19:25 PM, 5th November 2014
About 4 years ago

Google "property lettings franchise" or "estate agency franchise" and you'll find links to all the major players.

Just to be clear, if someone has looked into and is seriously considering doing something similar to what I've done I'll happily give 15 minutes of my time to share my experiences, but I'm not promoting anything and I don't offer a consultancy service.

Colin Belton

15:52 PM, 6th November 2014
About 4 years ago

Hi Callie, I would like to reiterate Steve's point on what hard work it is being a letting agent. I bought a franchise, grew it to three shops and then closed, to move the the US. It was lucrative but harder work, than the buy-to-let properties I own, which are managed by agents, and I do a day job.

I am not sure how much money can be made from inventories, as a stand alone business. My landlords, were not keen to pay for anything over and above the basics.
Colin

Callie Cawley

15:59 PM, 6th November 2014
About 4 years ago

Hi

Thanks to everyone for your helpful contributions.

Ive looked online and seen letting agency startup support services that offer training, guidance and even services (eg maintenance & furniture providers) but what they dont offer is a franchise or license they show you hwo to set up a company, but its your own company not theres. Its a lot cheaper than buying franchise or license.

Has anyone got any experience or opinion on this type of service? Would this work in high demand areas like mine?

Mark Alexander

16:53 PM, 6th November 2014
About 4 years ago

Reply to the comment left by "Callie Cawley" at "06/11/2014 - 15:59":

Letting Supermarket do not charge for their franchises but you do have to have an inventory qualification from APIP or AIIC.
.

Julia Benham

10:30 AM, 8th November 2014
About 4 years ago

Hi Callie,

My advice to you as a landlord myself and a letting agent I would always advise someone to increase their property portfolio if you have money to invest. The stats are that most new businesses fail within the first 5 years - are you willing to take that chance? The lettings market it pretty much saturated (online and offline) and it takes a considerable amount of money to set up, (we put in ÂŁ100K in the first 18 months!) plus a lot of hard work. As you are no doubt aware this industry is changing (for the good) and becoming highly regulated too, which will ultimately cost money. For ROI, you'll be better off purchasing another property or two. Ultimately, as you build your portfolio and self manage, you'll be able to earn a good income from the capital growth. In terms of investment, I would also recommend learning about and getting involved in HMO's as the rental yields are excellent if you buy right and know what you're doing. Well worth investing time into this investment area. Another good investment area are flips. Hope this helps.

Julia Benham

10:37 AM, 8th November 2014
About 4 years ago

P.s. the only person making money within a franchise, is the franchisor! I would be very careful - if you really want to run a lettings agency, start your own brand - don't waste money giving it to someone else!. Also, unless HMRC have changed their rules (which I doubt very much), you'll have to be VAT registered, even if you don't meet the VAT threshold within the first year or so - which is highly unlikely that you will. I'm still not VAT registered after a year!

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Patrick Collinson has got it wrong yet again!

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More