Blog → Relets – how to maintain landlord relationships and grow your letting agency profitably

Relets – how to maintain landlord relationships and grow your letting agency profitably

1st July 2020     William Moule     Letting Agency

Reading Time: 8 minutes

In a recent poll Landlords cited issues with contractors as the second biggest reason why they decided not to relet. There were two elements to this – poor quality work and overcharging.

I’m sure you are all wondering what the number one reason was… keep reading and I’ll tell you at the end.

landlords

Before we get on to that, I want to just set out a couple of important points

1 – Landlords judge YOU based on the performance of your suppliers. Even though they are a separate company and you might think they are totally unrelated, this is not how landlords see it. They will hold you accountable.

2 – Relets and Management are the easiest money you can make. I’m not saying they are easy, but from talking to hundreds of agents over the years they have all told me that getting a landlord on board and signed up to management in the first place is hard and costly.

Once it’s done, if you can keep the relationship then future lets and the ongoing management fees are much easier. One agent I recently spoke to said they make virtually no profit at all on the first let and they are entirely reliant on relets and management to make money.

So… we’ve framed the problem… you make most of your profit and your easiest money from relets and one of the main risks to you actually getting that money is your own suppliers.

So suppliers are the problem but they are, I believe, where you are going to find your solutions… your Preferred Suppliers List and more specifically how you manage it.

The top agents that we work with are all absolutely vigilant about their PSLs. They treat them for what they are – major business assets that hold the key to maximising the profit they make from each landlord.


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Ok.. so I’m going to set out what I think are the 4 most important things you can do right now to improve your PSL.

1 – Lets start with the basics. If you don’t have one you absolutely must set up a proper Preferred Suppliers List. It doesn’t matter how big or small your agency is this is essential.

preferred suppliers list

You should have a fully vetted,  reliable, good quality panel of contractors for all the main trades.

Nobody in your company should ever recommend companies to landlords who are not on this list. We all know this happens, people recommend their friend who owns a plumbing company. Or maybe there are contractors who pay commissions directly to your negs or property managers for referrals.

I’m not saying there is anything wrong with that, that’s your judgment call to make. But if the contractor is being used solely because of the money and the quality of their work is not good. This will lose you to relets and management in the medium and long term.

You should meet all contractors before referring work to them. These are the people who are going to be going to site to meet your landlords, possibly to do many thousands of pounds of work. You would not hire a new neg or property manager without an interview and your contractors should be the same.

  • How do they look?
  • Are they professional enough?
  • Remember your landlords will judge YOU by their standards.
  • Do you want your contractors turning up in trackies with a builders bum hanging out?

How do they communicate -are they able to explain themselves well – this is important, especially for the more technical trades who may have to explain the intricacies of, for example, a boiler repair, to your landlord.

As part of this interview ask for testimonials from other Letting Agents that they work with. This is important, don’t accept testimonials from Mr and Mrs Smith for some private work they have done. You want to know that they have experience working with agents.. if they do they will understand the principles that apply to trying to secure repeat business rather than one off jobs.

Make sure you ask how they manage and monitor the quality of their work. If the owner of the company does all the work themselves then it’s fair for them to say that as an answer. However, anyone who employs people or subcontracts work must have a good answer to this question. For example, we have a quality control manager who visits each team at least twice per month to assess their work… including how they are interacting with landlords on site. Smaller companies may not be able to do this but they should have at least some basic quality control measures in place

If you are happy with them during your interview the next stage is a trial. You will be amazed at how many contractors who can’t even be bothered to do a job properly when they know they are being checked. For example, all of our cleaning teams are subcontracted and we trial all of them and only around 25% make it through.

So that’s point 1 – set up and maintain a proper Preferred Supplier List. All the agents that I work with who have the best relet success and management retention are all over this.

Point 2 – Build Strong Relationships with you Suppliers

relationship

Ok, so you’ve got a solid list of contractors and you are happy with their work so you can now leave it right?

Nope. The best agents we work with have an individual who is responsible for maintain the relationship with the supplier.

You will also find that the contractor themselves is also motivated to build the relationship with your company so it takes little effort to build strong and lasting bonds.

There are a few major reasons why this is important

Firstly although there are  lot of contractors out there for you to use, there are also a lot of agents out there for the contractors to work with. If you have got a good contractor you do not want to lose them. Managing the relationship proactively is a good way to avoid this.

Secondly, even when using good quality contractors there are going to be times where the shit hits the fan. Mistakes can happen that impact the landlord and leave them with a bad impression. Your chances of getting the contractor to resolve them in a way that the landlord finds acceptable are a million times higher if you have shared a drink with them or at least checked in with them regularly on the phone.

We at Agents Army have a mantra – we see ourselves not as a third party contractor but as a department within our clients organisations. I recommend you try the same.. value your contractors, they are an essential part of the service you offer landlords, treat them like you treat your colleagues.

Point 3 Quality Control

quality-control

I touched on how your contactors manage their own quality before but this section is about how you assess your contractors performance.

The vast majority of agents rely on complaints.

If a lot of complaints come in about a particular contractor they deal with it.

This is a not a good system… it’s something that in the software world they called Failure Demand and this concept is central to correct management of quality.

Failure Demand is where your system has failed and this has created a demand on your resources, normally your time.

It doesn’t tell you anything about the quality of the work being done, it just tells you about who is complaining about it. What if, for example, every landlord thought ABC plumbing was terrible but only 5% of them complained? You would probably think they were pretty good.

To properly manage quality you must be proactive.

As I mentioned previously we have a quality control manager. His role is to visit all teams and assess the quality of their work and landlord interactions. This allows us to assess them based on what we believe are the correct standards. This means we pick up on problems BEFORE we get complaints and this should be your goal too and is key to increasing management retention and relets.

Find and solve the problem before your landlords even know there is one.

You are obviously not going to be able to do this to the same level but I recommend that someone from your company is at least sporadically checking works to ensure they have been done properly.

Another way to get valuable information that a lot of the bigger agents use is introducing a process of mandatory contractor feedback from your staff. Ie.. whenever someone from your company books works in, they have to rate the experience from 1 to 5. You will soon see which contractors are doing well and which aren’t and can jump on this before it’s too late

Last point -Standard Pricing

So this is probably the most important point which I why I left it to last.

Do you let your contractors charge what they want? Or do you make some effort to control this?

Most agents do the former.

Let me ask you this question – if you are a landlord and your agent refers 2 different cleaning companies to you and they both charge different amounts who would you feel? It leaves a bad taste.

How about Gas Safety Tests etc?

I very strongly believe that as part of your preferred supplier list your contractors should sign up to a standard pricing model.

This achieves 2 very important things.

1 -your landlords get charged the same amount for the same job. There is a certainty and reliability in this that they appreciate.

2 – most importantly – it forces your suppliers to compete on quality rather than cost. If they want to get work referred from your company then they have to be good. If they are not then your staff will book another company from  the list. It takes away the possibility of poor quality companies winning work by being cheap.

Now you may say, but our landlords want the work to be cheap and I’m sure that’s true. But what is also true is that no matter how cheap it is, if it’s not done right your landlords are going to complain.

So, set a fee that is tolerable to your landlords and fair to your contractors. There is a sweet spot here that you will be able to find.

This is the biggest change you can make to improve the quality of work of your contractors in a short space of time.


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So, in summary, landlord’s judge you by the performance of your suppliers. They will not relet with you if your suppliers are not up to scratch. Hopefully the tips and ideas I have put forward in this blog will help you to improve your processes around your suppliers and in turn lead to a much better relet rate in future.

Oh… and the number one reason why landlords don’t relet? It’s simple – they did not perceive they were getting value for money. There’s a whole other blog topic to be written about that one…

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