Despite the many positive developments in modern residential management, a major and long-term industry issue remains largely unaddressed. Today, residential landlords are still having to pay exorbitant lettings fees charged by many property agents. These can be as high as twenty percent once tenant finding, management, contract and referencing fees are taken into account. It is time to champion the needs of the landlord in a market where many high street agents are still hiding their fees and often double-charging on costs.
When double-dipping is rife
Historic research* bears this out, revealing that letting agents often ‘double dip’ by charging both tenants and landlords for services such as checking references or alterations to contract extension agreements, including simple revisions such as a change of date. Also the fee landlords pay when they rent out their property through an agent varies widely, ranging from a low of five per cent to a high of seventeen percent or more - indicating a poorly regulated industry.
Additional charges incurred when renting out a property are common, and increasing onerous for landlords, reducing the yield on any rental property. Those charges can include inventory completion, property visits and checkout management. Other charges landlords face include paying for the cost of running credit checks on prospective tenants, reviewing references and checking tenants into a property.
Using tech to drive down costs: will this become the new normal?
It is time to address the problem. Luckily, new solutions are emerging that deploy technology to drive down residential management costs to as low as five percent, increasing efficiencies and generating savings with more and better system information. This so-called landlord platform technology leverages day-to-day operations data to generate intelligence that can be used to optimize the performance and profitability of the operation.
The emerging impact of technology on residential property management should not be underestimated. Landlord platforms optimize quality of service and operational performance. The benefits of such a platform are many. A typical tenancy has 200 tasks, all of which can be automated – and with a system of this kind everything can be made to run like clockwork. The landlord is provided with a real-time view of unit status. Shared data provision, filtered by type of user makes both landlord and tenant reporting fast and efficient. Shortcomings and problems within the unit are highlighted, while expiring licences, upcoming vacancies and other administration essentials are flagged continuously.
Importantly a landlord platform can also be integrated with local authority, utilities and other third party applications.
Finally, for reporting purposes all information is exportable in an easy-to-read file at year end.
Roger Southam is Chairman of lettings and management disruptor agency Cohab
