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View Full Version : buying a letting agents - advice



apope
21-05-2007, 14:27 PM
I am looking to buy an established letting agents in the south east of england - home based or shop based. Can anyone offer advice on where the first port of call should be? I have tried loads of business transfer agents and there seems to be a dearth of these businesses for sale. Surely at some point even letting agents want to retire or have a career change?

jeffrey
21-05-2007, 14:49 PM
I am looking to buy an established letting agents in the south east of england - home based or shop based. Can anyone offer advice on where the first port of call should be? I have tried loads of business transfer agents and there seems to be a dearth of these businesses for sale. Surely at some point even letting agents want to retire or have a career change?

Is there a trade association of Business Transfer Agents, perhaps, with a magazine/newsletter circulating to them?
If not, start one -that could be your new business!

apope
22-05-2007, 18:39 PM
mmmmm Thanks Jeffrey. Thats not quite what I had in mind. I have heard of people buying already established businesses so I'm sure my request is not unusual.

J4L
22-05-2007, 18:59 PM
mmmmm Thanks Jeffrey. Thats not quite what I had in mind. I have heard of people buying already established businesses so I'm sure my request is not unusual.

I think you'll find that a Franchise may be your best bet but this can cost you up to £40k. And that's starting from afresh, no Landlords OR tenants.

I've not seen many if ANY agents selling with a portfolio of properties at all. If you DO find one I'm sure it's going to cost you way in excess of £100k.

As I said in another post you'd be better off putting your money into a bit of research, marketing and a kool website and starting afresh on your own.

We have a brand, stationery and a website that you could 'franchise' if you fancy. Give me a PM.

Tiered EA
22-05-2007, 20:51 PM
If you are serious I could be interested.

Business served it purpose. Possibly leaving the Capital.

J4L
22-05-2007, 20:56 PM
If you are serious I could be interested.

Business served it purpose. Possibly leaving the Capital.

I'd pm them if you are looking to sell

Esio Trot
23-05-2007, 09:38 AM
I have tried loads of business transfer agents and there seems to be a dearth of these businesses for sale. Surely at some point even letting agents want to retire or have a career change?

You don't find many offered for one good reason: the figures don't add up for a successful business. Hence any transfer agent will find it problematical in arriving at a "goodwill" figure.

There is a formula for the sale of a portfolio only, and if you got the names of the proprietor of all the local agents and wrote a personal letter you might get a taker for selling either their business or just the portfolio.

Another poster has mentioned a franchise. The greatest difficulty if you get sucked into this is when you decide to sell. There are huge restrictions (like any purchaser being deemed suitable to the franchisor - and who is to know if they just don't like you and as a result will just stonewall and obfuscate with any prospective purchaser you obtain) and they also want a significant cut of the "worth" of the business.

AFAIK, the major franchisors do offer a re-sell service. Thus you might be able to "buy" a franchise from an existing franchisee through the franchisor.

I am involved in lettings, and I have other business ventures that are significantly more profitable than lettings. It is cut-throat with no loyalty from landlords, many of whom are just looking for the cheapest price regardless of service standard. Another agent has gone to the wall in our town - usual thing, there one day taking rent and deposits and the next day gone. I then get calls from former landlord clients bleating about how they haven't been paid for 2 or 3 months but have discovered the rent was paid on time to the agent; or tenants have moved in and there is no TA but the tenants have paid their rent and deposit which has disappeared; also that they discover that almost no reference checks were made and as a result they have poor quality tenants in occupation. When I ask why did you go with them, the normal answer is they were cheaper or had tenants ready to move in.

I would not recommend this business to anyone as a means of providing a decent income.

lorenzo
23-05-2007, 15:02 PM
Interesting post Esio,

At once I can see that the things you say ring true regarding this business. The manifestations of the problems with lettings business are dotted throughout this board. Muppet landlords would be the bane of any agent and muppet agents the bane of any landlord. lol

But running a few back of envelope calcs (and I'm no muppet, I've run businesses all my life) indicate it would be a tidy earner for an efficient owner-operator with staff.

Perhaps it would be the purchase of a job in actuality and not really suitable for a business investor... and perhaps not something to make you a millionaire.

But haven't looked too deeply, would be interested in the experiences of others.

Anyone?

J4L
23-05-2007, 15:47 PM
I think the most important thing here is communication. We have spent months researching this and (along with lorenzo) i've been in business for years. The major problem people have with estate/letting agents is that they don't communicate well enough. Quite frankly our research has backed this up tenfold.
I have been an agent (nursing and not lettings) and my overall view of business is that if you can be an agent with excellent service and communication skills you will almost definitely prosper.
Yes the demand has to be there but you can go get it yourself if you offer the correct service. It's just a case of waiting a little while whilst your reputation spreads via word of mouth.
By offering a service rather than a commodity you don't get tied up with the buying and selling issues or get left with a load of unwanted items.

agencies rule ok!!!

apope
27-05-2007, 13:20 PM
I was looking at it from the point of view of an owner operator. I do realise that it is possibly not the most lucrative of careers but my experience of it would lead me to suggest that it can be a 'tidy earner.' I have experience of dealing with several agents and have found them wanting in many areas but would agree that communication is often not the strong point. Poor communication has often led to problems in the past with frustration on the part of the tenant and myself. I have found it to be far more effective to speak to the tenants myself and usually tradesmen too.

Poppy35
29-05-2007, 17:11 PM
I think the most important thing here is communication. We have spent months researching this and (along with lorenzo) i've been in business for years. The major problem people have with estate/letting agents is that they don't communicate well enough. Quite frankly our research has backed this up tenfold.
I have been an agent (nursing and not lettings) and my overall view of business is that if you can be an agent with excellent service and communication skills you will almost definitely prosper.
Yes the demand has to be there but you can go get it yourself if you offer the correct service. It's just a case of waiting a little while whilst your reputation spreads via word of mouth.
By offering a service rather than a commodity you don't get tied up with the buying and selling issues or get left with a load of unwanted items.

agencies rule ok!!!

i agree. I have been running my own LA for 6 years now, set up from scratch, lots of loyal landlords followed me which was good so got an income within a few months but it still took a long time so be making a profit as of course the more properties you gain the higher your expenditure also (advertising etc), thats why most corporates trade in lettings as they already have offices/staff etc and still continue to do lettings even though it may not be financially viable. I've had many offers of going to work for other companies and selling them my portfolio but to be honest what they offer me financially would never be enough the compensate me for lack of quality of life by not working for myself.

hope you find what you are looking for