Business relationships are often compared to dating; and the world of property investment and rentals management is just the same.
On one hand you have the long-term relationships (or the long-term tenants): you’re comfortable, happy and in a routine. It just works – and everyone’s content. Yes, things might get a bit too settled or taken for granted, but that isn’t necessarily a bad thing… especially in the property world.
But on the other hand, you have the short-term relationships – dating if you like, which is akin to having short-term tenants. It’s exciting but high-maintenance. You have no idea if it’s going to work out. Things (e.g. your heart or your house) might get broken. It might be fun for a bit, but it gets mighty tiring after a while, and you yearn to settle down.
How to attract those desirable, long-term tenants
If you’re at a point where you’d like to attract (and keep hold of) some stable tenants that are in it for the long haul, how do you do that?
The answer is surprisingly simple: you make sure that your property manager doesn’t charge a letting fee.
Why do letting fees often equal short term tenancies?
If your property manager is charging a letting fee, they are profiting from short term tenancies. Therefore, many property managers will actually seek these out!
You see, many property managers actually view the letting fee as an integral part of their annual income. Many will expect to receive at least one letting fee per property per year.
If this average were reduced by having long-term tenancies (say five years), then the property manager’s income would be reduced to 80% of the income for annual re-letting.
Letting fees = a get-rich-quick scheme
Here’s why letting fees are a bit of a get rich quick scheme for some property managers…
If the property manager receives a letting fee, they only have to work four years to receive the same income that another property manager (who doesn’t receive letting fees) receives in five years.
The letting fee creates a significant financial inducement that’s funded by their tenants – and also eventually you, for having the wear-and-tear of short-term tenants.
With letting fees, there’s absolutely no incentive for property managers to look for long-term tenants… quite the opposite in fact.
Don’t put up with the expensive, high-maintenance, short-term tenants! If you choose a property manager who doesn’t charge letting fees, chances are you’ll enjoy a far better relationship with your property manager, and with your investment portfolio.
Bridgman Property Management does not charge letting fees. Switching to us is as simple as filling in a form – you don’t have to speak to your current property manager ever again (if you don’t want to). Just make sure we’re taking on new properties: in order to give you a first-class service, we only take on a maximum of 60 properties at any time. Contact us →
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