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Why Would An Agent Consider Outsourcing In The Current Market?

05 September 2016

Fees are being squeezed, Agents need to chase all the business they can, as we said before employing an extra member of staff for less than 70 properties is uneconomical.  Letting and management requires so many skills: marketing; advertising; sales .. you need to be an accountant, a legal advisor, a repairs clerk, a property visitor, an inventory clerk, an inspector of works, a counsellor - the list goes on and on!  So how can an agency that needs to compete with the multinationals in their area afford all the skills required to provide the same level of service?  Collecting rent and deposits, chasing arrears, running a client bank account, why would you if you had other options?

It may seem easy to dismiss as too complicated or too expensive but in reality when you look at your staffing costs, why would you do all the administration in house?

Outsourcing is a concept that has allowed many large businesses in other sectors to grow; it is not common to see human resources, expense management, office buildings maintenance, security and many other non-core areas outsourced.

So when and why does it work? No business should outsource its core services. In the case of most estate agents. they would see Sales and Lettings as their core business with management running in support.

Outsourcing is like a marriage;  it has to be entered into with great thought but once it works it is marvellous.  In the case of Agents, it frees their staff up to go out finding new business and bringing in new offers/ It means that Agencies can concentrate their staff costs on earners and not administrators. They don’t need to run a client account, saving them the cost of an accounts clerk. They benefit from the financial security by outsourcing their rent collection to a company that has spent years working towards the highest professional standards and has achieved membership of ARLA, NALS, The Property Ombudsmen and Safeagent.  So the negotiators can confidently tell prospective Landlords and Tenants that their money will be safe and properly accounted for. The agent can still take holding deposits via a facility provided by their property management company, but they no longer have to worry about accounting for a penny of tenant or Landlord’s money - that is all done for them.  They also get the benefit of a sophisticated software system that allows the payment of rents without any delays.

With regard to the legal side, every month we hear of more legislation that is being loaded onto the agent and the landlord.  By signing up with a competent partner, agents can show their properties, get in offers and then send them online to their partner managing agent - who takes over and deals with references, tenancy agreements, inventories, check ins etc.  Even if the agent is providing an introduction only service he can pass all this work onto a specialist partner.

Does it cost? Of course it does, but not as much as you may think. In this time of shrinking fees, we can only assume that Landlords are receiving shrinking services, you won’t get many hours work for £50 a month.

It can’t hurt any agent to take the time to consider and investigate all their options. As the letting market grows, the big guys (multinationals) will work to force the smaller independent operators out of the market. and we have seen that happening already.  Isn’t it time to band together to create a network of agents working independently but using the services of a central management resource, less overheads more varied experience?

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