A bright future for smaller letting agents
In the February 2014 edition of Propertydrum, Adam Walker, a trainer, management consultant and business broker, wrote an article entitled “Go big or go bust”. The article looked at the current property market and showcased the main reasons why the big letting agents are driving small and medium sized agents out of business.
While the article made some relevant points and revealed some valuable insights, as a medium sized independent letting and estate agent, we feel that it wasn’t a completely accurate reflection of the industry.
It’s better to be small when dealing with HMOs!
The article touches on the issue of smaller firms not having the same financial clout and pull compared to bigger firms, and as a result many small and medium sized letting agents could suffer from a lack of high quality stock. While this may be true, the article fails to mention HMOs (Houses in Multiple Occupation), which operate in microclimates. Around 25% of HMOs are part of the portfolios of small agents, and we feel that big letting agents with branches across the country will struggle to keep up-to-speed with the different rules and regulations each local authority is allowed to impose. As a smaller agent, we’re able to focus our efforts on understanding and implementing the HMO standards set by Cardiff County Council, meaning we can offer unrivalled, expert advice to landlords.
You don’t need a massive team
In the article, the author mentions that large letting agents are successful because they have separate staff members covering everything from inventory checks to maintenance management. While we agree that a large staff base will help an agency run smoothly, we don’t agree with the suggestion that smaller firms (where staff regularly do more than 1 job) can’t run a successful business. We have a reasonably small but productive staff level which has allowed us to grow year on year for the last 10 years, opening three branches. We’re still reasonably sized, and yet we regularly receive high praise from our landlords, buyers and tenants for our customer service.
Small scale marketing is just as effective
In the article, it’s pointed out that bigger firms can spend more money on marketing strategies and CRM systems. While this is true, suggesting that smaller firms have a “box of mouldy files in a basement” is totally inaccurate. There are, of course, small agents out there who do not engage in marketing, but there are plenty of others that do – and you don’t need to spend £500,000 (as the article suggests) to be successful. While we can’t speak for other agents, we feel our CRM system and marketing strategies make us an attractive letting agent in landlords’ eyes. Instead of throwing money at traditional marketing strategies, small and medium sized agents need to be creative and think outside of the box.
At CPS Homes, we pride ourselves on integrating ourselves within the Cardiff community, as demonstrated by our sponsorship of Cardiff Blues. Using our connections, we recently took a group of Blues players, as well as their mascot Bruiser the Bear, to Marlborough Primary School’s annual fete, helping them raise vital funds in their quest for a new playground. Not forgetting our student roots, we regularly host competitions for the academic type, and last year held a Fresher’s BBQ, where we gave away free burgers and welcomed new students to Cardiff.
We feel that the larger letting and estate agents would struggle to match these smaller but invaluable marketing activities.
The main point to come out of the article is that the “smallest and weakest independent agents don’t have a long term future”. We agree that unregulated, unprepared and unprofessional agents will struggle to stay in business – especially now that the economy is picking up – but the future isn’t bleak for regulated agents that work above board, provide excellent customer service and innovate their services – even if you’re the smallest in the market.
Are you a landlord looking to rent out Cardiff property? Contact the team at CPS Homes today, to benefit from our comprehensive marketing services. We can help rent out properties in Cardiff Bay, Cathays, Roath and many other Cardiff areas.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
