Tag Archives: Running A Business

29Jul 2011

Property Landlord advice: Professional Letting services cannot be watered down.

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By Steve Roulstone

In a recent release from the NFOPP in the form of an e-mail newsletter, the writer tried to infer that in this difficult market, prices will automatically come under pressure as Agents and Agencies try to compete with an ever increasing number of Letting Agents looking to take a share of what they describe as a ‘diluted market’ As usual when I read these articles (and no doubt just as people see when they read mine) several points jumped to mind, which could both explain the perceived problem and also the manner in which the writer fenced around the reasons why the matter was worthy of a newsletter from the NFOPP when in reality it was an advert for  inventory services!

Industry wide representation.

The main bodies covered under the NFOPP banner are National Association of Estate Agents and the Association of Residential Letting Agents. Therefore, the NFOPP cannot be seen to post a comment which actually states that the majority of new Agents are not from the Lettings Industry, as anybody in Franchising in this market will confirm, rather Estate Agents turning to our market as a way of earning income because of the lack of sales and as I have confirmed before, because the percentage of Private rental Property in the UK is now close to 20% they can no longer ignore what so many Estate Agents have treated as its poorer relation for so many years.

More should not equal less.

 

But no matter who the competition is, the very fact that we are seeing close to three times the normal increase in property coming to the rental market, would not in my book be described as a diluted market! It is my belief and the evidence I see from our National organisation, is that those offices that have a good profile and are readily visible on the High Street, are receiving good prospects and growing business because of this increase in available property. The problems occur because so many new Landlords are a captive audience with the Agent who has failed to secure a sale and stay with the same organisation, or because the Agency who is struggling to compete does not have high street presence.

Smaller can still be good.

 

That does not mean that smaller Agents are poorer Agents, far from it, but I do and would have reason to question any such agent who also pays for services that as a Professional Agent they should be able to undertake themselves, because as the evidence confirms, our potential customers are being very discerning about where they spend their hard earned money! This is why I believe, it is important to have as big a profile as possible and I would suggest that carrying out every aspect of Managing a property through the staff employed by the Agency itself, is important not only to the Agent, but more importantly, to the potential Landlord and cutting prices is not the way to deal with the needs of your Customer.

18May 2011

Current Property News: Buy to Let market grows in strength.

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By Steve Roulstone

Recent reports indicate that the Buy To Let market is, as I have been reporting for some time, growing in strength and therefore returning despite all the gloom and doom reports that the Financial Crisis would see an end to Private Landlords investing in property using this specialist mortgage.

Misrepresentation of Landlords.

This report raises several issues for me, the most glaring being the overall suggestion that Landlords buy property to get rich quick and that they will not do so ‘Under current circumstances’. Well excuse me for pointing out that this is obvious and the error in the unstated indication that ‘Getting rich quickly’ is why Landlords purchased property in the past. Well as one of these Landlords and as somebody who speaks to and knows many others, can I point out that by far the majority of Landlords chose and indeed choose property as an investment, because it has traditionally given a conservative return, but never actually lost money!

Markets will always dictate.

I have pointed out on these pages recently, that it is the market itself which will dictate both the number of properties available and the need for Landlords to supply that demand. We have seen Tenant demand rise steadily over the last three years and the % of rented UK housing stock confirms both the need and the ability for Property owners to supply the demand. What has happened however is that droves of new Landlords are being created by the inability of the Sales market to provide purchasers and the realisation that by renting property instead, they have been able to move on with their lives and plans. I myself now rent and have rented my main home for the next five years for the same reasons.

Rising rents, really?                     

The main push of this article is to concentrate on the amount of income generated from the rent and I find the statement that Landlords are being enticed because of the possibility of rising rents to be a little thin! Firstly, this totally ignores the more down to earth reasoning given above that owners are renting simply because they can, when they are finding it very difficult to sell, allowing them to get on with their lives, but the assumption still ignores the main reason for Landlords to buy or invest in bricks and mortar, which is historical, because property in the long term always gains in value and this is very much linked with the conservative expectation, set against the risk of either Currency or Stocks and Shares.

Tarred with the same brush.

It seems to me that the writer has looked at Property Landlords in a ‘one view take all’ approach, where the reality is so much different and far less simplistic. Is it my view alone that people who invest in property are more conservative than those who invest in more traditional methods? Either way, the market is driving this increase in new Landlords and what is not my belief alone is that it is both sustainable and shows no sign of decline for the foreseeable future!

06May 2011

Property Landlord advice: Rental horror story holds lessons for us all.

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By Steve Roulstone

Once in a while, and thankfully such occurrences’ are less common, a story comes along which encapsulates the problems that exist in our Industry all together. A story reported on in Letting Agent Today does just that. It is to the credit of the party concerned that they have viewed the incident in such a way that they are able to offer up the story to others as a lesson to be learnt.

Constant vigilance.

Within our own group, we have always ensured that our paperwork is constantly reviewed, even when problems occur and we can see we have done everything possible to carry out our responsibilities to the full, we still review processes and make changes if we believe we can further improve our service in carrying out our duty of Agency to the Landlord.  In this case it seems several essential services were not carried out correctly.

Referencing.

For me there is only one form of referencing and that is to use a professional referencing agency. So often we hear of Letting Agents who ask for references and proof of employment from Tenants and check them out themselves. The problem is clear for me, unless you have access to the information that a professional referencing agency does, there is no way you are able to investigate in full a Tenants history when problems would soon be found out. This is why Tenants with a poor history use independent Landlords fearing that referencing will find them out, so it is doubly disappointing in this case that the Landlord should suffer poor referencing.

Insurance.

Of course once a Tenant has passed professional referencing then Rent and Legal expenses insurance can be taken. It does not take a brain surgeon to understand why such Insurances are only available against Tenants that have passed such referencing in the first place. It has long been a recommendation of mine and I have written about the need for Landlords to take out Insurance recently.

Property visits.

As a Tenant I have just spent the last two months encouraging my Landlord (Privately Managed) to visit my Wife and I in our rented house, purely because of how important it is for Landlords to be confident that their property is in good hands. In the case of a managed property, the agent should carry out this work and when done correctly, and early enough, Tenants can be assessed in their property at a very early date, ensuring action can be taken earlier rather than later if they are failing to honour the agreement. Enabling notice to be issued at an early date if needed and always on an initial six month agreement, unless negotiated earlier, as for all practical reasons, a break clause after six months is the same as a six month agreement.

Professional management summed up!

It rather sounds as if this problem could have been dealt with cleaner and earlier on the Landlords behalf if all of the above had been followed correctly. At the end of the day you need to understand what the implications are of standing in the Landlord shoes, then and only then can you ensure you offer the best advice and service to your customer. After all, to do so is to carry out the role of agent in the correct manner, what other manner is their?

03May 2011

Franchise News: 5 Good Reasons to Choose a Franchise Opportunity

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By Joel Caws

Selecting a franchise business as a route to starting up a business can be a great choice. Like anything, there will always be two sides to the coin, but lets look at five important characteristics that a franchise can offer in contrast to a non-franchised business venture:-

1. The Franchise Business Formula

The heart of any franchise business is its franchise formula. This is primarily comprised of the business structures and processes that make the business happen and that make it a potentially profitable venture. These elements make up a core part of the franchise manual that becomes a new franchisees ‘bible’ to read and follow, in order to reproduce the achievement of the original franchise pilot businesses.

2. Proven Track Record

The good thing about a franchise is that you can often talk to other aspiring business people, just like yourself, who are already running the franchise opportunity you are considering as a business. The franchisor will usually be able to provide a list of franchisees that they are happy for you to contact which can act as references for the franchise venture. It can give you extra peace of mind to speak to people who have already travelled the road you are on and have already taken on, and are actually running day-by-day, the franchise business.

3. Training & Support

Unlike starting up business by yourself, franchise opportunities are usually provided with a level of training and on-going support. This is to enable you to run the business effectively and successfully by understanding the franchise formula and how to apply it to the day-to-day business activities.

4. Financing

The majority of high street banks have franchise sections that specialise in funding franchise business start-ups. You will still need to prepare your business plan, but having the weight of a franchise system behind you can give the bank some extra assurance that you are working with an already established and proven business concept. This may give you an edge in getting any funding you might need.

5. Franchise Association Support

There is plenty of help and support offered to those considering franchising as a route to starting a business. In the UK, the British Franchise Association (bfa) is an organisation of which many franchise businesses are members.  The Association helps to promote ethical franchising in the UK and it can therefore give some extra peace of mind if the franchise system you select is a member. Additionally, the bfa can be a resource for any other help you might need such as pointing you in the right direction for professional support such as for legal and financial issues. Other countries have similar franchise organisations in place to hope promote franchising in their respective countries.

Finally, its worth bearing in mind that, a franchise is a business like any other. A willingness to work hard, be determined and dedicated to the franchise system, are all essential to give you the best possible chance of success. A franchise in itself is no guarantee of success, but it does give you the chance to get out of the starting blocks running.

14Apr 2011

Property Landlord advice: Property Investment still stacks up.

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By Steve Roulstone

As a Landlord with several houses purchased through my time as a Letting Agent it is nice to know that my investment in bricks and mortar has been well spent and even taking the current down turn in sales and property value, the investment stands up well against other investment opportunities.

Presentation figures.

As part of a process that I undertake with potential Franchisees, I have put together figures from several sources to confirm how property has performed against its rivals. I chose figures from the last ten years; indeed the last decade 2000 through to 2010 inclusive. It is not that as agents we have to convince people to buy property in the first place, far from it, we enter the scene when owners are deciding if either the market is what they want for their property, or if having made the decision, they wish the property to be managed by Agents rather than themselves. As I point out, it does no harm to be aware of how much better bricks and mortar have performed against what some would perceive as the normal route for investment.

Property v Stocks

 Over the whole eleven year period, property produced 64% growth (National House price statistics) whilst stocks only gave a 6% return (Stock exchange growth figures) Now I am fully aware that the whole point of Stocks and Shares is to buy and sell but this is of course not needed for property so I believe it fair to directly compare one with the other. I am also aware that S&S pay dividends and the average return over the same period was an additional 20%, but then rent also counts and on average, Landlords make 10% of the rent after mortgages have been paid. When both are taken in too account property still looks ahead of the game by some way!

Not forgetting inflation.

I added inflation in (3% gain and 3% inflation = 0% growth) and then looked at information from the Barclays Capital Guilt study 2010 which did the same for Shares, Bonds and Cash. The outcome for property allowing inflation at 28.2% and after paying Tax at 25% gave property at a return of 38% and the best that either Bonds or Cash could offer after inflation was less than 3%, with shares actually losing money! Quite a result I am sure you would agree, as property outperforms its rivals to the power of 10 which all points to Money well invested!

07Apr 2011

Letting Agent News: To tweet or not to tweet?

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By Matthew Carter

Lots of letting agents are still questioning whether twitter is right for their business. The primary role of twitter for a letting agent is to connect with their local community, be more accessible to their potential client base, promote their latest properties and generate business leads. I started a twitter account for our business back in 2009, over the years I’ve picked up a few tips that you might find useful:

  • If you’re new to twitter you might want to follow lots of people to start with to inflate your own follower numbers – you follow them they might follow you back – simple (remember the more followers you have the more people there are to see your tweets – potentially).
  • But do your followers care what your business is saying? Possibly not, so after a few weeks start to be picky about who you follow and create you own niche/community this could include existing clients, potential clients, trade press, and competitors (why not keep an eye on them?).   
  • Make the most of lists – I utilise lists in twitter this way you can keep track of how many clients or potential clients are following you
  • Get it on your phone – it can be difficult to tweet when you’re busy, so register your business profile to a mobile twitter App this way you can do it on the move! (You don’t necessarily need an iPhone)
  • Keep it personable – relax a bit, use your tweets to get the more human side of your company or organisation across from time to time
  • Show of your knowledge every now and then – You want your customers to know that you’re a thought leader so, comment on the latest industry news, flex your grey matter – show your customers what you know and why they should chose you  
  • Get your twitter feed on your website (not just a link!) – this can be great for Search Engine Optimisation, the content is constantly changing and you’ll be using keywords in your tweets that could help you float up in the Google rankings     
  • Link twitter to your facebook page, this way any facebook updates go straight out as tweets! (I usually use twitterfeed.com)
  • You can also create a news feed in Google reader and link it to your twitter account, subscribe to stories and keywords that you customer base might find interesting in Google reader – ‘share’ a story and it appears on twitter (again you can use twitterfeed) 
  • Use tiny cc to shorten your links – more space to get across what you want to say! You can also chose the name of the link to make it more appealing 
  • Add a link on your email footers – let your customers and suppliers know that you’re contactable through twitter 
  • Make sure you link to any articles or PR that you might have been mentioned in to help spread the good word and give your PR more longevity (and hopefully more exposure)
  • Get some conversations going, take the time to comment on your clients tweets and strike up a conversation
  • Report the success of twitter – let your board know about twitter, don’t keep them in the dark! Who’s following you? How many referrals from twitter does your website have? How many people follow you? (You might also like twittergrader to keep track of your stats) 

 

04Apr 2011

Franchise News: A Franchise business as an investment choice

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By Joel Caws

Investing money into a new venture can be a good way of putting extra capital to work in order to make a profit. There are plenty of ways to invest capital from merely putting it in a high interest bank account or investing it into a business opportunity.

Generally, the more riskier the investment the bigger the pay back or loss. When you place an investment into a savings bank account you’re confident your capital is going to be safe, on the other hand the gain you will get from the invested capital is often low. It’s also associated directly to the interest rates at that time, hence if interest rates go down, the benefit from your investment may also be reduced.

Many people choose to make an investment into the stock market which can be an activity that carries much higher risk. The profits can be high for those who have taken the time to know the reasoning behind the way stocks and shares move, however for people who are uninitiated it could be a fast way to lose your money.

Property is another recognised investment preference having a pretty sturdy track record. Although property markets can go up and down in the short term, they have a tendency to rise gradually in the long term. As a result many investors put funds in property because they want to see a positive benefit in the future.

Investing capital into a business venture is a well-liked option. You will find a few methods to do this by means of either starting a new enterprise or looking for an established one that is already operating.

Opting for a franchise may improve the success rate further because a franchise business relies on a proven franchise formula. Quite a number of franchise business opportunities can be run as management franchises which are perfect for individuals who wish to put capital into a business venture but not be hampered with the actual every day running of the business. By employing staff to operate the franchise business, it is possible to manage the business without getting your hands soiled.

There are also franchise resales which are franchise businesses which have already been setup and have been trading for some time. Deciding on a franchise resale may help to further lower risk as you will benefit from a business history to look at prior to deciding to put your cash into it.

No investment is completely devoid of some risk, nevertheless a franchise system provides the extra support of a tried and tested business formula along with training and support. Generally speaking, the success rate of a franchise is good with nine out of ten franchisees each year turning a profit according to Natwest/BFA annual franchise industry surveys. Whether or not you choose to put money into a franchise opportunity or some other business venture, one point is for sure: the success of the business (and the return on your initial investment) will likely be measured by your commitment, hard work and dedication. If you don’t use a strong-minded and disciplined approach, any venture will most likely be doomed to fail.

01Apr 2011

Franchise News: Advertising against Google? A closer look.

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By Steve Roulstone

More often than not, I receive several requests to advertise in either the National press or a periodical associated with the Franchising Industry every week. Nothing new there! Indeed I take my hat off to the people charged with selling the advertising space for their continued persistence and enthusiasm for the task at hand.

How do they send the message?

But it has been very noticeable of late, that I am receiving less and less phone calls and more and more requests via e-mail. Not only that but we receive about an equal split between those who use a full page style of e-mail representative of a page from a magazine and those who send a personalised e-mail, no doubt designed to encourage the recipient to feel more at ease with the sender!

Bit of a contradiction!

I do not know if I am the only person to spot this, but what I perceive as a more concentrated effort to be successful, probably driven by the downturn in the Franchise market place, which we all know is out there, is pandering to its major competitor by utilising one of its most successful styles of communication introduced by the web, namely e-mail to get the message across, about the type of media, they wish to get the message across about, namely the written word!

They are not alone.

I think for the Lettings market to which my Franchise belongs, the clearest indication that web activity is more important than papers or magazine presence, is that nearly all local newspapers that derive an income from advertising property, for sale or for rent, are now running their own web site to ensure the income is not lost. Says it all really!

First page presence.

If I am bombarded by those wishing me to spend my hard earned income through the written word, I am equally bombarded by just as many (thankfully ALL by e-mail!) trying to do the same through web site optimisation. Now I think I made the correct decision on this front some time ago and the work undertaken by the Company I employ has ensured we are where we want to be (or getting their – if it were only that easy!) on page one of the most relevant searches, but let me ask you a question – what is the first page you open when on the internet? How many said Google?

First to be first!

This is one of those situations where the preacher preaches the gospel yet is already converted. There is no doubt that web presence and by that we all know I mean on Google is the Holy Grail (and if it is not it soon will be) for all advertisers. But how good that the very method by which we wish to achieve this presence is by a country mile, the most commonly used ‘first page’ we seek when starting our own regular thirst for knowledge. A case of proof being not just in the pudding, but in the starter, main course and coffee and biscuits as well!

15Mar 2011

Current Property News: Rental mortgage barrier not excusable.

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By Steve Roulstone

It was my misfortune to come across this very situation myself at the end of last year, when I rented my home out, not because I could not sell, but because I had an opportunity which made very good sense to me as a house owner. It seems to be the house owner piece of that statement that the mortgage companies are ignoring, for one aspect of my situation did not make sense any way that I look at the circumstances.

Confirmation I am not alone.

A recent report in Property drum (An excellent monthly magazine which I wholeheartedly endorse) confirms that this practise is still happening and for the same reasons! It seems that some mortgage companies are just taking the opportunity to make more money and others are just downright rejecting the possibility without giving the circumstances any consideration at all. It is the situation where the amount of risk to the mortgagor is low that gives me the most concern. In my case, I only owed at a most conservative valuation no more than 20% of the property value. In the reported case this figure was 30%.

Where’s the risk?

I am unable to confirm in the reported case, but in mine the return was twice the mortgage that I was due to pay at that time and yet the answer I received confirmed that it was not a matter of any circumstances fitting the bill, rather that they were unprepared to consider any rental situation at all. In the reported case it was that the owner (Look up the meaning of the word!) was charged 1% for the privilege, or take out a new buy to let Mortgage, which would of course result in more fees being paid. I can at least understand that, but why just say no, especially when we still had to go through the application system?

No understanding of the market?

It could just be that they do not understand what is happening out in the real world, or just that decisions have been made with no consideration to the market that they operate in, but isn’t that no better than giving mortgages and therefore money with such ease that was the cause of the problems we are living through in the first place? It does not sound right does it? But I would love some other explanation that did make sense because at present, the rental market is growing year on year, we have a shortage of housing for the number of Tenants approaching the market and for the first time in history, the private rental sector should overtake the public, this year.

No excuses that make sense.

The reasons listed above are not alone, indeed other reasons are given and can be found through a little research, but none of the reasons make sense to what is actually happening on the high street and in housing estates up and down the Country. This includes the statement that mortgage companies are ensuring the mortgagee can afford the re-payments. Excuse me for stating the obvious, but how can generating more income from the property put the mortgage at risk? Surely all such matters can be assessed using the standard application methods?

Stand alone.

In my humble little way, I just ask that Companies make decisions because they make sense are considered and have the best interest of us all at the heart of the process. So please stop making mass decisions when it seems that they are not needed that do exactly the opposite and cause upset to people’s lives which are hard enough at the moment, especially using excuses that just do not hold water!

07Mar 2011

Rental issues: Avoiding Rental Voids can be a problem.

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By Steve Roulstone

The Tenant deposit scheme has on the whole been well received and there is no doubt that it has done exactly what it was meant to do when introduced. Namely, to ensure Tenants and Landlords communicate and negotiate with each other over dilapidations. It has however had other effects which were not foreseen and when Tenants do not act in a reasonable manner, causing a dispute and creating a situation which can add further problems when the next Tenant is due to move in for example, the next day.

New Tenants expect the best.

When any Tenant moves in, they do not expect to be faced with a situation where damage to the carpets, decoration or appliance for example, has to be left until such time as proper negotiations have been undertaken with the leaving Tenant over where responsibility for carrying out repairs should lie! It is not a new problem, but prior to the scheme, we could make an experienced judgement over who created and therefore who should pay for the issue to hand. Now we can no longer do this and according to the TDS procedure, must even take time to gather estimates before getting agreement and starting the work.

Why not avoid the situation.

Avoidance would be the easiest solution, always ensure a week between Tenants, but the reason so many Tenants follow hot on the heels of the last occupier is at the new Tenants request. Most Landlords can see the potential issue and rather than risk upsetting the new Tenant, will agree that a void period has to be accepted between Tenants. Of course as Agents, especially those carrying out the viewings, the ability to change Tenants without any void is difficult to avoid, after all, we are doing the best we can by our Landlords and when the new Tenant states they have to be in sooner rather than later it is difficult to risk them going elsewhere by saying no!

Best advice and best practise.

So our advice to avoid the complaint from the new Tenant, which is bound to happen no matter that it was they who HAD to be in the property without delay, when they move in to find the cooker door glass broken, has to be to always build that extra week to the availability date and even though void periods are created by this practise and it goes against our intentions as Letting Agents, it is better to avoid problems for new occupants and give their Tenancy the start we would all wish for.