Singing Pig

sorry ... i'm also confused (.com) ... you are saying that the market rent is £1300, yet you can get more ... doesn't that higher value therefore become market rent?  doesn't that incentivise you to low-ball the rent estimate?  there's   alwasy a catch .... and it seems to have taken some probing and several post on your part before you mentioned this?

The "market rent" as we use is the figure that we pass on to the landlord and is Equivalent to that a standard letting agency would achieve on the property (as in the rent that they would receive) - hence essentially it is a 0% letting agency. We could low ball this figure, but ultimately that would negate the point of our concept: Higher returns for landlords (and less hassle). As for mentioning it earlier, I thought it was obvious, but I expect that's because I'm familiar with the concept rather than any fault of yours :)

how do you get the tenant to pay more than market rent ?

As I mentioned in an earlier post, we include a range of additional "value adds" such as Sky, Broadband etc. which we charge tenants a premium for.

It is clear that I haven't put this concept across in one post (as was hoped for), but I'm a little more familiar with explaining this in person. Forum advertising is rather new to me. Please excuse :)

aaron  - your attempts to explain this new concept of 0% management are laudable but still completely incomprehensible

you  will charge a premium to the tenant for your company to  install SKY and Broadband  etc  -    this premium is meant to be enough to pay you for (lets be kind here and say)  10% normal management fees ??   -  what tenant in their right mind would agree to that ?

btw - what is/are  the "etc" value added items ?  

i suspect that OFT Terms and conditions of fair contracts might have something to say about your refusing to allow a tenant to buy their SKY anywhere else .....

i still dont get it ...... 

Aaron if you cant explain it to us  - Landlords - how are you going to sell it to tenants ?  

clottie ..... the answer, of course, is that when something looks too good to be true ... it usually is!

every property has a market rent ... this will fluctuate over time .... if you happen to be letting out at a time where there are several similar props then the market rate can fall.  there is no way in the real world that a tenant will pay over the going rate ... and if they are having to, it is only a matter of time before they leave ..... landlord gets a void .... and so hasn;t gained anything!

aaron - i think you are being very naive.  most landlords are not numpty newbies ... they understand that no-one works for nothing ... even you!  if my tenants are being charged for things they would normally receive as part of the rent, they will leave. 

the other angle here is that if the tenant is paying for your charges directly, yuo are far less likely to have tenants applying to your agency ... becasue of the costs involved.  i really sell this to potential tenants upfront (I don't use agents ... too useless, unmotivated, passive, rude, expensive, clueless ... i'm sure you're different though!) ..... ZERO set-up fees ..... its on our business cards "cut out the letting agents ... save ££££s" ... tenants latch on to that ....... !

Aaron J:

sorry ... i'm also confused (.com) ... you are saying that the market rent is £1300, yet you can get more ... doesn't that higher value therefore become market rent?  doesn't that incentivise you to low-ball the rent estimate?  there's   alwasy a catch .... and it seems to have taken some probing and several post on your part before you mentioned this?

The "market rent" as we use is the figure that we pass on to the landlord and is Equivalent to that a standard letting agency would achieve on the property (as in the rent that they would receive) - hence essentially it is a 0% letting agency. We could low ball this figure, but ultimately that would negate the point of our concept: Higher returns for landlords (and less hassle). As for mentioning it earlier, I thought it was obvious, but I expect that's because I'm familiar with the concept rather than any fault of yours :)

how do you get the tenant to pay more than market rent ?

As I mentioned in an earlier post, we include a range of additional "value adds" such as Sky, Broadband etc. which we charge tenants a premium for.

It is clear that I haven't put this concept across in one post (as was hoped for), but I'm a little more familiar with explaining this in person. Forum advertising is rather new to me. Please excuse :)

 

 

The "market rent" as we use is the figure that we pass on to the landlord and is Equivalent to that a standard letting agency would achieve on the property (as in the rent that they would receive) - hence essentially it is a 0% letting agency

straight question ... is the rent that the landlord receives the same as the rent the tenant pays?  e.g. tenant pays £1300pcm, does the landlord receive £1300?  if not, then you are NOT a "0% letting agent". 

its like drawing teeth   -   aaron  -  i would use this experience here as a BEEEG pointer to go and find another business idea  - you clearly area a creative thinker, but this idea is potty  -  sorry - its  just plain daft -  everyone knows you dont get 'owt fer nowt  - and the tenants will sus you out very quickly and will leave for a cheaper property  -  then your landlords will leave  - and hey presto  - no business

Okay, I'm going to try a different approach. Numbers. These are of a property we got on our books 3 months ago in Elephant and Castle. 

Normal Agency

charges e.g. 10%

achieves £1300 on the property (thats what tenants pay)

Agency take their fee     £130

pass the landlord    £1170

Spaces 

add additional services e.g. broadband (tenants avoid hassle) 

let the property at £1500

pass landlord £1300 (what a normal agent would achieve - see above)

WIN WIN

spaces earns money (after deductions) £150

and here's the catch: the landlord boosts return on investment by £130 compared to standard agency and has no tenancy management hassle!

 
We've been running this concept for about a year and a half now - the longest period a property has been vacant is 3 weeks! It's London and if you can't get something let there you should really consider giving it over to a professional.  The majority of our tenants tend to renew contracts because they appreciate the lack of hassle DESPITE similar properties being available at a lower price!

As for the OFT - we've of course received legal council from the outset and certainly work within the letter of the law. 

Aaron J:

Okay, I'm going to try a different approach. Numbers. These are of a property we got on our books 3 months ago in Elephant and Castle. Normal Agencycharges e.g. 10%achieves £1300 on the property (thats what tenants pay)Agency take their fee     £130pass the landlord    £1170Spaces add additional services e.g. broadband (tenants avoid hassle) let the property at £1500pass landlord £1300 (what a normal agent would achieve - see above)WIN WINspaces earns money (after deductions) £150and here's the catch: the landlord boosts return on investment by £130 compared to standard agency and has no tenancy management hassle! We've been running this concept for about a year and a half now - the longest period a property has been vacant is 3 weeks! It's London and if you can't get something let there you should really consider giving it over to a professional.  The majority of our tenants tend to renew contracts because they appreciate the lack of hassle DESPITE similar properties being available at a lower price!As for the OFT - we've of course received legal council from the outset and certainly work within the letter of the law.