Local Lettings Agency Presentation January 2012
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Transcript Local Lettings Agency Presentation January 2012
The complete guide to
setting up a Local Lettings
Agency (LLA2)
Agenda
What stage are you at?
Introducing our LLA Creation Triangle
The landlord product
Staff skillset
Power, autonomy & flexibility
Business planning
You have……
Decided to go ahead with a LLA but not
sure where to start….
Decided that your PRS Access Scheme is
good enough to introduce charging & want
to know how
Been told by senior management that your
PRS Access Scheme needs to make some money
Decided you want to know more about LLA but
are so far un-decided whether it’s right for you
Running LLA, but not hitting targets / have concerns
Bust a couple of myths?
DO IT NOW!
If Letting Agents can do it, why can’t we?
Landlords won’t pay for something they
currently get for free
Money making in the first year
Marketing – is it important?
Staff skillset and freedom to operate
What about rent?
Procurement of rental property
in the current climate is tough
What do landlords need in a LLA service?
Low risk of rent arrears
Low risk of property damage
Long term tenants
Ongoing assistance/help with problems
“Slick” back office
Consistent transparent professional service
Payments that arrive on time
Procurement of rental property
in the current climate is tough
What stops landlords working with us?
Poor marketing – don’t know you exist
Hassle
•
•
•
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HB
Rent arrears
Property damage
The tenant is ill-equipped to manage the
tenancy
Bureaucracy
Better deals in the private market
Procurement of rental property
in the current climate is tough
Things to remember:
You will not create a service that every
landlord wants to use
Decide on your “landlord type” & create
services that will appeal to that type
To those landlords that do decide they can
get a better rent in the private market,
what can we HIGHLIGHT?
Procurement of rental property
in the current climate is tough
Their private tenant may end up on housing
benefit in the current economic climate
Their private tenant may fall into rent arrears
Their private tenant may damage the property
Their private tenant may only wish to live in the
property for 6 months & then they have a void
& new agency costs
They don’t know much about their PS tenant
Introducing our LLA
Creation Triangle
LANDLORD
PRODUCT
BUSINESS
PLAN/ FUNDING
STAFF
SKILLSET
POWER
AUTONOMY
FLEXIBILITY
Landlord product
What constitutes the landlord product?
Market research
The services provided to the landlord
Service unique selling points (USPs)
Customer service
Lettings pack
The pricing structure
Landlord payments
How the service is communicated to landlord
Market research
Consultation with local landlords/agents
Phone, e-mail, landlords’ forum, survey
surveymonkey
What services do they want?
What services would they pay for?
What are the positive/negative aspects of the
current service (USPs)?
How much would they be willing to pay?
Ongoing consultation
Develop a landlord business club
Use the business club for ongoing LLA
consultation
Use the business club as a marketing tool
Tackle ongoing issues as they arise
LLA service development
Market research informs service development
So what services are you going to offer?
Can these services be “hassle free” for landlords
– e.g. could you offer guaranteed rent or a
leasing style product?
Review all potential LLA services from a “What
added value do they bring to landlords” point of
view?
In the landlord’s shoes
Ashford LHA Rates Shared 1 bed 2 bed 3 bed 4 bed
Mar 2011 rate
£292
£515
£625
£725
£995
Jan 2012 rate
£270
£495
£600
£695
£975
£20
£25
£30
£20
£52
£63
£73
£100
£72
£88
£103
£120
Mthly loss from LHA £22
rate change
LLA 10% “mgmt
£29
charge”
Landlord “perceived” £51
mthly loss
Unique selling points
What services do you provide that make your
LLA unique?
Tenants are “tenancy ready”/prepared
Long term lets
Your volunteers?/Mentors?
More attractive/innovative bond scheme?
You simplify the HB system for landlords?
You provide “hassle free” lettings?
You minimise voids?
Customer service
“Assistance” policy – exactly what assistance
the landlord will receive in event of any issues
Lettings pack
“Terms of business”
Service standards
“Tenancy Manager”
Out of hours emergency assistance
Pricing structure
Must be transparent
Featured in the “lettings pack”
Must bear in mind LHA rates vs. market rates
Must bear in mind what competitors are
offering
Landlords must be able to associate tangible
benefits in paying the fees
Considering your expenses, resources &
financial goals
Marketing
Branding
Literature must look “professional”
Dedicated website
Where will you advertise your service to
landlords? Newspapers? Radio?
Launch event?
Staff Skillset
What are the considerations with regards to
the staff skillset?
Staff training & development
Consistent, professional, transparent service
Strategic vision/business development
Transition from existing schemes
Working relationship with other departments
& partners
Staff training & development
What are the objectives of your scheme?
What are the posts & job descriptions required
to deliver your objectives?
Essential skills? Knowledge of PRS & local
market? Experience of working with landlords
or landlord groups? Leadership skills
(co-ordinate with partners)? Negotiation skills?
What are the skills gaps in current staff?
Identification of training opportunities
Consistent, professional,
transparent service
Robust, regular inspection procedures
Robust end of tenancy & void procedures
“Tenancy Manager” for landlord & tenant with
direct contact information
Out of hours service?
Regular communications with landlord – (ie
what have you done that month to deserve
their fee?)
Strategic Vision/Business
Development
Does your scheme have a long term vision?
Do you have plans for how your service will
develop?
How many properties do you need to procure
per month to support your development?
Void strategy?
Rent arrears strategy?
Tenancy sustainment strategy?
Transition from existing scheme
Pilot with a selected group of landlords
Separate services
Straight to full charging
Strategy & incentives to transfer properties
Incremental fees
No sign up fees
Working relationship with other
Departments/Partners
Identification of other Departments/Partners
who have an impact on service delivery
What is the severity on the service delivery of
poor performance & how can this be managed?
Partners? Service level agreements
HB
Floating support
Repairs & maintenance contractors
Power Autonomy Flexibility
What do we mean by power autonomy
flexibility?
Back office monitoring & management
Managing conflict of interest
LHA rates & rent collection
Model/structure
Senior management support
Back office monitoring &
management
Better use of IT
Robust systems for administration, monitoring
& management of the scheme
Accounts facility & robust financial monitoring
“Officer notes” to ensure consistent approach
to landlords & tenants even when staff absent
“Slick”/minimum paperwork
Managing conflict of interest
For local authorities developing in-house
Property inspections & Environmental Health
enforcement function
Serving notices & Housing Advice stay-put
advice
LHA rates & rent collection
LHA rates vs. market rates
Negotiations on rent with landlords
Access to discretionary housing payments?
Tenant top ups – how will this be managed/
collected?
Direct payments
Rent arrears strategy
Model/structure
Built in flexibility so that staff can negotiate
and resolve issues effectively & efficiently
Reduction in bureaucracy
Reporting structure
Management structure
Senior management support
Are senior management committed to the
project?
Degree of involvement in the project?
What are their reporting requirements?
What do they want to know about the project
performance?
The business plan
A business plan describes the complete
operation of the LLA and typically includes:
Vision for the business
Marketing plan
Running the business
Financial projections
Short/long term goals & regular review stages
Financial projections
How many tenancies will be created/month?
How many do you need to procure? What is
your worst case scenario? And best case?
Base financial projections on worst case
Assumptions to be made:
Average rent
Tenancies created/month
Charges
How many tenancies will end per year?
Costing the “unknown costs”
Financial considerations
What do you currently spend on PRS
procurement?
Existing staffing costs?
Cost of administering bond/claim processing?
What are the costs to your organisation of
doing nothing?
Identify source, sustainability, quantity of start
up & ongoing funding
Financial considerations
When will the service break-even? What year?
What is the portfolio of properties that needs
to be maintained to cover costs? Tenant find
vs. full management
What mix of properties is required? Smaller
properties generate less income
LLA’s – what’s important
Market research conducted is able to demonstrate a
demand / gap for such a service (Viability Study)
Good communication / consultation with Landlords
Excellent initial and sustained marketing of service
The focus of the customer service is on Landlords
Good working relationship with Council Departments
Local Housing Allowance and average market rents
are close
Back Office
Launch Event
Senior Officer / Member support
LLA’s – what’s vital!
Identified start up funding for the medium term
(2-3 years) to allow service to establish (Business
Plan)
The right model (reduce your weaknesses)
A product / service Landlords want
Guaranteed rent or another USP
Staff skills, passion, knowledge (‘can do’ people)
Staff freedom to operate in a commercial
environment
Ongoing strategic vision / development
Conclusions
DON’T PANIC – steady approach!
Investigate the best way forward, viability study
(baby & bathwater)
Need to develop Landlord relationships and start to
develop a ‘product’ that works
Work more like a business (make sure you
have a long term plan, it stacks up financially & you can be
flexible to changes as they happen / before they happen)
Staff & freedom
Don’t be afraid to ask for help, this is outside of what
you have had to do before
Contact details
Inside Housing Solutions Ltd
South Barn, Capel Road
Rusper, Horsham
West Sussex
RH12 4PY
T/F: (01293) 871107
E: [email protected]
W: www.insidehousingsolutions.com