Last time we looked at Market research and one of the topics to be researched was properties that are currently available to rent in your locality. You can find these on your competitor's web sites and listed in the local press. Make a list of ALL the property available near you. It's an excellent exercise to type them out on your word processor and list them in order of price. Most property letting agencies list prices as PCM. That's price Per Calendar Month, though in some areas prices are listed on a per week basis, especially in and around London. Make sure when you compare prices, you are comparing like with like. You'll need to double check to see how the agencies list properties in your country, in your area.
As each newspaper ad appears, enter the new prices on your list in the correct position, cheapest first, most expensive last. What's the point of this? You are soaking up almost without noticing what a detached bungalow might be worth (rental wise) in one area of your town or district, or a two bedroom apartment in another. It's all part of building your knowledge into becoming THE local expert in property rentals. And when it comes to valuing properties for rental for real, you will already have a comprehensive register to refer to. True, these properties are not yours, not yet, but that doesn't matter, you can go to school on these valuations, and they will teach you a great deal.
But of course you need properties to let yourself, so let's get them. But where are you going to find them? They are out there and they are waiting for you, believe me, more than ever before. Here's where. 1. Do you or any of your friends or relatives have any property sitting empty? Has anyone you know passed away recently? If so what has happened to the house? Do you know of any property that has been up for sale for months and hasn't sold? Any of these could be your first instruction. Check out with the owners and casually ask them if they have considered letting. If a property is standing empty it is costing money. If it is let, it is producing money, and that's a big difference. And think about this. When people inherit property why are they always in such a hurry to sell anyway? The answer of course is money, they have probably never seen so much cash before, and can't wait to spend it on a world cruise and a German sports car. But what happens in a year or two when the money has gone? They are back to square one. Stoney broke.
But if the house is rented out, that property will generate money forever, not counting the fact that over time it will increase in value too. You can only sell a house once, you can rent it forever, and like everything else over time those rents will increase. If you know someone who is desperate to sell a house they have inherited, have a word with them. Point that out to them. Why Sell? Why do people sell? It is a mistake. If they are desperate for some cash they could always see the bank manager and take out a loan, but keep the house. It is a cash cow, always has been and always will be.
Secondly, why not rent out the house you live in now? What! Yes, I'm serious, you want property to let don't you? Why not start with your own? Perhaps the kids have grown up and left home and you are now bouncing round in a large 4 bedroom home. Do you really need all that space? You probably don't. So why not rent a smaller cheaper two bedroom bungalow to live in for a year or two, and rent out your house? You're not selling your home after all, and if you miss it that much you can always move back into it when the tenancy agreement expires. And if you are going to rent out your own home, make sure you value it highly, because there is no point in going to all that expense and trouble unless you are making money doing it. Right? Value it highly and if it lets, you make money, if it doesn't let, so what, you have lost nothing. I have done this twice and it worked very well for me.
But we want more, of course we do. Put on your walking shoes and get out and take a trip round the area. Take a notebook and visit all the sites where postcard ads are displayed. This might be at the post office, a works canteen, a supermarket, shopping malls, the newsstands, anywhere where small ads await you. It's common to find properties listed there. May be two or three on each site on a good day. Jot down the details and especially the telephone numbers and return home. Of course these properties are not yours either, but with a little effort they could be. How? By ringing the owners of course.
Cold telephone calling is not an easy thing to do, and should only be done when you are feeling at your brightest. Make a couple of notes of what you have to say before you call anyone, as we can all dry up on the spur of the moment. Smile, and ring them up. You don't have to see a person to know if they are smiling, you can hear it in their voice, and don't we all prefer to deal with cheerful attractive people? Everyone's attractive on the telephone! You ring, and the person answers. Imagine it is someone advertising an apartment to let for £500 per month. Be polite, say good morning, be honest and upfront and tell them that you have recently started a new lettings agency, that you have good tenants waiting, (you will have the moment you begin to advertise, and I'll come back to that.) and that you might be able to let their flat. Sit back and wait for their response!
Some landlords will not speak to agents under any circumstances. Some landlords would not do business with an agent even if you offered them £10,000 per month and free beer forever. Life's like that. Landlords are the same as the rest of us, some are open-minded and will consider any reasonable suggestions, others are closed minded and stupid, some are downright rude, abusive even. Good luck to them. All you were trying to do was help them let their property, and if they couldn't see that, it's their loss.
Some landlords might say "no I need £500 just to cover the mortgage so I couldn't afford to pay an agent fee on top." That's OK, you could pay them that £500 per month, if you let the property for £550 per month, (allowing for your 10% commission)and that's so close to their price as makes no difference. Suggest putting the flat on your books for £550. At this stage all you want is the instruction. In the initial period price is secondary. Get the instruction first, and then worry about letting the property afterwards. Tell the landlord you would be happy to put it on for £550, and as it will be on the basis of no let - no fee, what has the landlord got to lose? Nothing, in effect they are employing you for FREE, they only pay you anything if you succeed. Most intelligent people could see the merits in that.
And then there are the amateur landlords who have no idea what they are doing. Perhaps they have inherited granny's house, and they really don't want to sell it, but on the other hand they are too busy to be chasing round after tenants all day. Perhaps they don't know how to find tenants, or how to reference tenants. Not everyone knows this, don't imagine they do. These landlords are precisely the kind of people you are looking for. They are the perfect client for you and when you come across them, court them furiously. You could solve all their property problems for them, and make some money for yourself. Suggest they might like to meet you at the property that is to be let.
If they show any inclination to do this, make an appointment to go and see them as soon as possible. Don't make the appointment for next week; don't make the appointment for tomorrow, what about this afternoon? What about in twenty minutes? Enthusiasm is everything. Huge & Impressive probably couldn't meet them in half an hour, but you could. Take your camera and ask if it is OK to photograph the house. Take your diary and note everything that needs noting. You don't need to measure the rooms, no letting agency does that, don't even consider it, as it would be a waste of time and could cause you headaches in the future if you made a mistake.
Remember, you will do anything within reason to land that property, and if it includes going out in the rain in ten minutes time, then do it. You can do exactly the same thing by ringing private small ads you see for property to let in the local paper. Ring them up, introduce yourself and offer your services. Offer them a small discount if need be. But remember this, you will be backheeled many times, rejected, but hey so what? You will also be invited to take it further plenty of times too, I guarantee it. Why? Simple, because there are so many new and amateur landlords out there, many of whom have property standing empty, and many of whom simply cannot afford to have no revenue. If they do, they run the real risk of the house being repossessed if the mortgage isn't paid. Not all landlords are rolling in cash, it's very easy to get into buy-to-let property, but sometimes very difficult to get out of it. These landlords are trapped, they HAVE to let the property and that is why many will be only too pleased to hear from a cheery character (You!) who might solve all their problems. Be persistent, keep at it, and once you have put together three or four properties you will be a step closer to truly launching your business.
It is important that from day one that you include actual properties to let in your initial ads, because that is the main reason most of your potential customers will read your ad, to see what you have available. Be creative, be enthusiastic, be clued up and confident, and you will attract properties and you will let them. Believe me, there are many desperate landlords out there and they will instruct you if they think you might shift their empty houses and apartments.
Take another look at the other agent's ads that run week-in-week-out in the local papers. They can only afford to pay for these ads because they are producing the business. But a word of caution here. All property advertising always produces less response than you optimistically imagined. But that's OK, because every property you sign up and rent out will produce for you around a £1,000, up towards $2,000 in revenue over the year, some more, some less. So you don't need to sign up and let tens and dozens from each ad, nice though that would be. If you can sign up two or three in a week, and let one or two of them when you are starting out, then you are doing very well, and your business will grow surprising quickly.
If you rent just one property a week you'd be on target for more than fifty successful lets by the end of the year. If you do that you are on target for a £50,000 per year income, (almost $90,000) and that is before all the other revenue streams that you can tag on that we will look at a little later. Yes I know you will have expenses, but what business doesn't? I let twelve properties in one month during my first year, and you can imagine how delighted I was with that, and there is absolutely nothing to stop you doing the same.
Just the opposite in fact, because as I said earlier, there are more properties to rent around the world today than there has ever been before, and more people seemingly wanting to rent them. Yes there is competition, of course there is, but you are on the way to becoming THE expert on rental property in your area because you are studying everything there is to know, and because YOU are far more enthusiastic than your tired rivals who don't really care whether they miss a particular property or not.
Look out for the next article in this series entitled "Finding Tenants For Your Property Business" and good luck with your business in the future.