In the last article we looked at how a 21st Century Agency can ensure the security of a landlord’s portfolio even against its own default, and how in the process it could increase income year on year as well as minimise voids and arrears.
I would like to deal with the cancer that is the scourge of all portfolios – VOIDS. The best way of course is to have long term tenants who stay in the property for years on end which should always be the goal of the agent. Only charging one finders fee of half the first months rent in any one period of 18 months is a great incentive for the agency to find long term tenants. It also acts as an incentive to keep tenants in the property by ensuring they do not get into arrears, but if they do they are helped out of arrears as soon as possible thus maximising landlord income.
However, tenants do leave and re-letting the property without delay is essential to minimise the void period, the 21st Century Agency should be set up to find the right tenant by maximising the number of tenants applying to let the property before the old tenant ever leaves.
Letting/Re-letting the Property
- Firstly, all the property details, floor plans, photographs and videos should be on file so that the moment a tenant hands in their notice, the property can be on the market on ALL the major internet portals including video on YouTube and links to all the major social media within an hour of the tenants notifying their intention to leave.
- Viewing days should be booked immediately with the current tenant so that viewings can be set up for groups, this creates a competitive element between prospective tenants.
- 95% of prospective tenants are using the internet to find their next home to rent, because of this most of the discussions a prospective tenant will have with their family will be outside the normal business hours. Good tenants are often lost because they cannot call to get an appointment there and then. A 21st Century Letting Agent will provide them with the opportunity to book their own viewing on allocated viewing days online, 24hrs a day. Or alternatively a 7 days per week, 24hr Booking Line so that they can call to book a viewing slot at any time of the day or night. As a result, the ease of declaring interest means more tenants to choose from.
- All viewings should be escorted by a representative of the agency who is thoroughly familiar with the property and the terms of the tenancy. Prospective tenants should be encouraged to fill in a full application and other appropriate forms on the day to avoid delays and to allow immediate vetting of them to commence.
- Thorough tenant vetting should be a given (not always the case by any means) and must include full reference checking and credit scoring of each applicant, requiring and checking out of property owning guarantors, and taking one months rent in advance. Wherever possible, a visit to a prospective tenant current residence will indicate how well they are likely to look after the new property.
- In these days of digital technology there should be full video exit and induction record and inventory as standard with a copy being provided to both the exiting and inducting tenants and also to the landlord.
- The switched on reader may realise no mention is made of taking a deposit. In the event of dispute the landlord invariably loses at least some of their costs and it takes time and hassle to resolve as well as the inherent costs of obtaining and securing the deposit. With proper tenant management and a Property Owning Guarantor most claims can be settled very quickly without using a deposit system and reduces the risk to the landlord.
By employing the technologies available today, the sourcing, selection and installation of reliable and secure tenants can be accomplished with a minimum of delays and void periods. As the Letting Agent should not benefit each time they source a new tenant (except tenant find only), the only way an Agent should benefit is when the property is let and the agent is earning commission fees, thus aligning their goals with those of the landlord.
Next time we will look at the ways in which the application of 21st Century techniques and levels of service can benefit both the tenant and the landlord in the day to day management of the portfolio.