7 ways to get your landlords the best return on investment [+ podcast]
Letting agents have plenty of chances to help landlords get the best return on investment. Abs Hassan, Director and co-founder at Prime Living, shares his seven top tips.
Landlords look to agents to help them manage their properties in the best way, and agents can show their value by always keeping the landlord's return on investment (ROI) front of mind.
From getting the right rental price to advising on the best time to make property improvements, here are seven of my top tips to help your landlords make the most of their investment.
1. Choose a tenant to fit your landlord and their flatmates
We always look at the data that the tenant has sent in the referencing process, to see if there's anything alarming. You have to be very strict about it.
Even if it does take longer, even if it does push back the start date, you've got to make sure that your landlord's investment is protected - that's what referencing is all about.
A lot of agents may think about their commission first rather than the long-term impact of choosing the wrong tenant, but you have to invest the time - or choose a third-party provider such as Goodlord, to help.
Your landlords will love you for it, and we've never had a landlord leave us for poor service. Agents get to do hundreds of viewings and, with that sort of experience, you're able to gauge the right candidate for your landlords.
As well as ensuring prompt communication around any issues the tenants may have while in the property, we manage to keep most tenants in a property for a number of years - meaning limited void periods too.
2. Organise bulk viewings to generate a sense of urgency
When marketing our landlords' properties, we launch the advert and, about three days afterwards, organise a two to three hour viewing slot.
Conducting bulk viewings is obviously efficient, and it creates a bit more urgency for tenants when they see how many other people are viewing a property - especially if they're deciding between two places.
You can say to the tenant that you have multiple offers and they need to get back to you by X time with their maximum offer.
The conversion rate is better, and you'll get multiple candidates that you can pass on to the landlord, so they can select the most suitable candidate rather than saying yes to the first person to put down an offer.
3. Advise on when your landlords should market their property
Some landlords have tenancies that they renew in November or December. Not many people are looking to move at that time, so we advise landlords to align their tenancy contracts to end in August or September, at the peak of the market, when graduate jobs are starting.
If a tenancy starts in the beginning of December, let it for a shorter, nine-month period rather than the full 12 months, to align it with an August end date.
So, the following year then the landlord can run 12-month tenancies year on year, at the peak of the market - at least until the move to periodic tenancies under the Renters' Reform Bill comes into effect.
4. Suggest property improvements to boost the long-term attractiveness of the property
We always do an initial assessment of the property, to make sure everything's compliant - safety certificates, for example - but also checking for any extra work that may need to be done.
Is the fuse box outdated? Are the windows double or triple glazed if you're on a very busy road - and will upgrading those help your EPC rating? If you're going to do a refurb anyway, will adding some extras add value to your product overall?
If you can upgrade now, you may not have to make another big investment for another 10 years. Depending on what that needs to be done, it may be worth waiting for a transition between tenants to do the work too, to use that downtime wisely.
All of these changes can then be balanced against the rental income, to ensure it's all within their budget and is the right investment to make for the long-term attractiveness of the property.
5. Do your due diligence
A new landlord approached us once, needing help refurbishing and reletting his property that had been used as a weed farm.
I felt terrible for the landlord - who, oddly enough, had another managing agent, yet it still happened. That proves why you have to do your due diligence!
You need to make sure that you regularly inspect all your properties - particularly if a tenant pays you rent in advance for a long period, with a higher rent than normal.
This situation really highlights the importance of referencing and how much the choice you make at the start of the process can impact your landlord's ROI.
6. Aim to offer the best price on trade services
If you have any maintenance to organise, you should aim to balance the cost of trades with the quality of the work they do.
In most scenarios, we have a cap of how much we're allowed to spend per property issue so, in some instances, we can accept the quote without even asking a landlord - but a landlord needs to know that they're getting the right quality of work for the price they're paying.
When your landlords look at their monthly statement, they have to know that you're doing what's best for them, and negotiating with your tradespeople is part of that.
7. Offer a rent protection service
Sometimes you can take all the care in the world, but, with the cost of living crisis ongoing, some tenants may still struggle to pay their rent.
Rent protection is a bit of a no-brainer to protect your landlords' income and your own, for a minimal amount. We've always advised landlords to use rent protection - especially if it's the first tenancy for a tenant.
It's always best to be proactive and help make sure that the landlord doesn't have a break in income which could negatively affect their bottom line.