Lettings agents come from all walks of life and business but it is a very natural step for a landlord to consider starting up their own lettings agency.
It is a way for them to scale up their property interests, reduce management costs on their own property portfolio, and develop another property related income stream, thereby reducing risk.
The vast majority of financial experts recommend that running a business and then using business profits to invest in assets is the most sustainable way of creating wealth in a low-risk manner. Much like property, a business generates cash flow and also possesses a capital value that can be realised on exit.
A landlord can start a lettings agency to manage their own properties, then bring in staff to manage other landlords' properties, and scale up from there.
Many landlords love propety and want to immerse themselves in the sector, so it is not surprising that many of our franchisees come from the landlord community, as Andy Smith explained to our colleagues at PropertyTribes:
Dorian Gonsalves, Director of Belvoir comments:
"Franchising isn't for everyone and it suits a certain types of business model and certain types of people. It can be also be very misunderstood. Some of our best known brands in the UK are franchises; MacDonalds and Dominos being two major brands who most of us have probably traded with at some point in our lives. Over 118,000 people are employed in or by franchised businesses in the UK.
For those who imagine they are going to dream up a unique new concept or product to offer their clients, it's unlikely franchising will appeal. Mature and experienced franchisors won't sell their brand and know-how to someone unless there's a really good fit. Similar to the best property agents, genuine franchise models belong to a type of redress scheme and adhere to a formal Code of Ethics.
The concept is simple. A group of people trade under one banner with shared thoughts, ideas, systems, expertise, clients, training, brand-recognition, buying power and funding in some cases. Franchisees benefit from the income of the business and the value of the asset when the business is sold. The Franchisor benefits from a small share of the income in return for the use of the brand and whatever the Franchisor is contracted to offer.
Similar to long term property investment it's not a get rich quick scheme. It's a long term and fairly predictable way of building an income and an asset within a sector you are passionate about. It's a lonely business being an independent trader. Being a franchisee isn't. Some of our offices are worth more than a million pounds. Nearly all Belvoir offices have been built from a standing start. Some make very healthy profit, others simply enable the franchise owner to make a living at the same time as having a working life they enjoy. Some are being built by parents and will be passed on to sons and daughters.
The vast majority of Belvoir franchise owners are also private landlords. Most were private landlords before they joined Belvoir and decided to make a living from property. Property may have previously been their passion but trying to make a living out of your passion isn't very easy. Hence, franchising appeals to some people and not others".
"Leveraging" is a concept that is well-understood by landlords, particularly in the concept of financing property deals. It means to multiply gains by exploiting the efforts or finances of others. In the context of becoming a lettings agent, landlords can leverage our 20 years experience in the business, as Martin Bunney explains:
We would be delighted to hear from any landlord who is interested in exploring the possibility of becoming a lettings agent.
With the property market showing positive signs of health and robustness, and news today that, even with £100K deposit and good credit rating, first time buyers cannot get a mortgage, the private rented sector in the U.K. is only going to grow and grow. There is major opportunity within the private rented sector, and Belvoir! is at the forefront of identifying new territories and getting franchisees off to a flying start with out award-winning training and support.
5 reasons to start a lettings business
Belvoir! awarded top lettings franchise for 5th year running
Belvoir! is an award-winning estate and lettings agency with 160 successful offices around the U.K. If you would like to talk about being our next success story, please call us on 01476 570000 or email us on firstname.lastname@example.org
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