If you like making lists, then this little known business plan could put £740 a week in your pocket!
So many opportunities make glowing claims about being easy to start, with little cash and lots of potential, but in this case it really is true. This little business is easy to start and needs very little cash. You can run it part or full time from home. It’s simple work, has good profit margins and operates in a virtually unexploited market.
So if you want to get into a great little business that’s basically very simple but with oodles of potential then read on…
So what does a Lettings inventory assistant do?
This opportunity is part of the property business. But it’s nothing to do with buying, selling or renovating. A lettings inventory assistant works specifically in the property letting business. I don’t know if you’ve ever rented a house or flat. Or let one to someone else. But here’s what happens at the start and end of the tenancy: The landlord (or letting agent) compiles an inventory stating what’s included in the property and its condition. The tenant signs it to say they agree. At the end of the tenancy another inventory is compiled. If anything has been lost, or any damage caused, the tenant is liable for the cost.
As an inventory assistant you simply prepare and check these inventories. In case you’re wondering, that’s all an inventory assistant does. You don’t get involved with leases, rent collecting or any other property problems.
Why I think this is a winner right now
You might have noticed but the property letting sector has skyrocketed over the last few years. Apparently over 2 million people have bought property to rent out over the last decade. Millions are renting a home, as houses and flats have become so expensive to buy. Official estimates suggest that up to 1.1 million people have arrived from the new European Union countries since 2004 alone!
Recently there has been a change in the law which really helps too: The new Tenancy Deposit Laws mean landlords must hold tenants’ deposits in a secure account. And must document everything carefully if they want to claim damage costs from the deposit. In short, landlords who don’t use a professional inventory service are asking for trouble.
Finally, this is a perfect little outsourcing niche. You see, the last thing most landlords and property letting agents and estate agents want to do is spend their time checking inventories. They’d much rather spend their time swanning around in their Porsches! Go back 20 years and estate agents used to put up their own ‘For Sale’ signs. Today, almost without exception, they have outsourced it to sign ‘planting’ services. An inventory assistant will appeal to them for just the same reasons. It can save them time and money. Offer them a good service at a good price and I think they will absolutely bite your hand off!
What you need to get started
You don’t need any experience or qualifications in estate agency or property to get started in this opportunity. If you are organised, methodical and have a good eye for detail you’ll make an ideal inventory assistant.
You won’t need an office or any staff, unless you want to expand later on. It really is a business you can work from home.
Unless you’re based in a city or large town where there is good public transport you will need some kind of transport to travel around the properties to be checked. If you have a laptop or PDA then this will help automate your business, and make inventory checking a real breeze. It’s not strictly essential to get started however.
Who are your customers?
This is one of the great things about this opportunity. Every company or organisation who is involved with letting out property is in the market for your service.
I think the main groups you need to target are estate agents and letting agents. (Some but not all estate agents let property as well as selling it so check before you approach them.) Letting agents can have anything between 50 and a thousand (or more) properties on their books at any one time. Another group you can offer this service to are private landlords – people who own houses and flats and let them out directly without using a letting agent. This might include people who just own one buy to let property, or companies who own thousands. (Obviously they could make much more lucrative customers!)
You can also offer inventory assistant services to housing associations. These are organisations who own and run social housing/council housing and who, again, often have thousands of properties to let out. One point, as these tend to be quite bureaucratic organisations, it is probably better to wait until you are established before approaching them.
Marketing your service
When you start I’d advise you to be pro-active about marketing so you can get up and running as soon as possible. Make a direct approach to all the estate agents, letting agents and professional landlords in your local area. You can track down letting and estate agents using local knowledge and your local Yellow Pages. There are also a few handy websites (listed later) where you can do a search to find all your local agents.
What I would suggest you do here is send a sales letter mailshot to potential customers. A few days later telephone them or call in and ask if they are interested.
This way you never have to do any tricky cold calling because, when you call, prospective clients should already know about you and what you can do for them.
Your letter should be short and simple: Tell prospects what you do and – most important of all – what the benefits to them of your inventory assistant service are. (More about this later.) As this is a fairly new concept I would also suggest you keep remailing them from time to time. As more and more agents find out what a great idea this is more will start to use it.
FREE SALES COPY!
I’ve had one of my copywriters put together a sales letter which you could use for generating leads. You’re welcome to adapt and use it for your own inventory assistant service. Download it now by going to www.canonburypublishing.com/inventory
Once you have been up and running for a while you can try some more passive methods of marketing. Run some ads in your local newspapers – and magazines which are read by agents and/or landlords. You might also find it a good idea to set up your own website and arrange ads or links on property websites. I’ve listed some useful contacts later.
Use these powerful sales arguments
Don’t worry, this isn’t going to be a hard sell: if a prospective client asks you to go and see them you will pretty much know that they’re seriously interested. But to maximise your success rate you need to strongly push the benefits of using this kind of service. Bear in mind that many of your prospective customers will be doing their own inventory checks at the moment, so you need to persuade them that outsourcing is a better alternative. Here are two good reasons:
It’s more economic. It’s much more expensive for a letting agent to hire an employee to do this, provide them with a car, have them sitting around idle when there are no inventories to check and taking up time from other duties etc. Using an inventory assistant can save them money.
It’s more efficient, and more accurate. Often, you’ll find the staff in letting agencies hate checking inventories and rush or skimp it, which can lead to big problems with tenants and landlords later. Because you specialise in inventories you can do it quicker and better –avoiding costly errors.
One last idea here: Although doing one-off inventory checks is perfectly profitably, ideally you want to sign your customers up on a regular agreement, to do all their inventory checks. So talk about how may checks they are likely to need over the course of a year and agree a price structure (more about this later) that gives them an incentive to do this.
All you need to know about inventories
Okay, now is a good time to tell you more about exactly what an inventory is, and how to do the checking.
After a rental application and letting agreement the inventory is perhaps the most important document in the letting process.
An inventory is very simply a listing of all the contents of a house or flat and a record of the condition of everything. This includes details of the condition of the fixtures and fittings, as well as decorating and floor coverings. Sometimes, an inventory is also known as a schedule of condition or a schedule of dilapidations.
The landlord, letting agent (or in this case the inventory assistant) should prepare the inventory which should be agreed with the tenant on the day they move in. This is known as the Check In Inventory. The landlord/agent and tenants sign the inventory to say that they agree with the contents and condition.
At the end of a tenancy the inventory must be checked and agreed with the tenant prior to the deposit being returned, preferably on move-out day. Again, it is very important that the inventory is checked in this way immediately prior to the tenant leaving. This way there can be no argument about any damage occurring after the tenant has gone. This is known as the Check Out Inventory. In most cases it is usual for landlords or agents to require regular inventory checks during a tenant’s period in residence. These might be required every six or twelve months. The frequency will depend on the type of property and type of tenants. This is known as an Intermediate Inspection or Inventory Check. and is a great extra profit earner for the inventory assistant!
If any damage has occurred, or anything is lost from the inventory, the tenant is liable to pay for this – excluding any fair wear and tear. However, this is always sorted out by the landlord/letting agent and the tenant themselves. As an inventory service you do not get involved with this at all. All you do is record what you see.
Furnished and unfurnished properties: important information
When offering an inventory service you will be involved with both furnished and unfurnished houses and flats. It is important to be aware of the differences.
A furnished rental property should include everything the tenant needs to live in the property. In theory at least, this should include all furniture and appliances and even the bedding and kitchen crockery/cutlery. An unfurnished property should, again in theory, be completely empty with no furniture, appliances or equipment. In reality few properties are either completely furnished or completely unfurnished but somewhere between the two extremes. So, for example, an unfurnished property may well have carpets, curtains and a cooker, fridge and washer.
As an inventory assistant it doesn’t matter exactly what a property includes. What is important is that you understand that every property is different and everything that is there is checked. (Unfurnished properties may just need a quick once over, while in furnished properties you might need to count the knives and forks!)
Step by step inventory checking system
Now you have an idea of what an inventory is let us take a look at how an inventory check should be undertaken.
I think the secret with this sort of service is to get well organised in advance. The better organised you are the quicker and more accurately you will be able to do the checks, and the more checks you will be able to do:
1. As soon as you get an order from your client arrange to carry out the inventory quickly.
Good Tip: Get a phone contact for the tenant so you can arrange a mutually convenient time. This is much easier than trying to arrange a time via the letting agent or landlord.
2. Automate everything as much as possible. While it is perfectly acceptable to prepare inventories on paper, using electronic inventories is a much better alternative. If you have a laptop or PDA create the inventory as a standard word processor or spreadsheet document. Once you’ve completed the check just e-mail it through to your client.
3. Use your own standardised inventory form (whether on paper or electronic) which you can simply adapt for every job. It’s more than likely that the letting agent or landlord will already have a form. However, try and persuade them to use yours if possible. If you use the same form for every job, even for different clients, you will be more familiar with it and be able to work quicker!
FREE INVENTORY FORMS:
I’ve asked one of my industry insiders to draft out a sample inventory form for you to use in this business. If you’d like a copy just go to www.canonburypublishing.com/inventory and download it free. All you need to do is tweak it and print it out or download it to your own laptop.
4. Work through the property methodically. It’s up to you how you do this, but use the same system every time so you can work more quickly and efficiently. For example, in a house, start with the upstairs before checking the downstairs. Or start by looking at the overall condition of the room before checking the contents.
5. Save time by using abbreviations when compiling the inventory. But ensure you use a clear system and explain what your abbreviations mean in the inventory to avoid misunderstandings. (The sample inventory form includes details of standard abbreviations.)
6. Be objective at all times. Don’t be swayed by whether you like/dislike the property personally, or the tenant, or the landlord. Just record what you see.
IMPORTANT: do not to enter into any discussion or negotiation with the tenant, or anybody else, about the condition of the property or what might or might not have been lost or damaged. This is not part of the inventory assistant’s job. Again, just record what you see.
7. Send a copy of the completed inventory to the client the same day if possible, and send a copy to the tenant. Keep a copy for yourself.
Add value by including photographic and video inventories
This is a great additional feature which you can offer your clients. It is a good feature to mention when marketing your service, in order to clinch the deal.
Modern technology makes it very easy and cheap to make a photographic or video record of the condition and contents of a rental property.
Almost any digital camera, digital camcorder or camera phone can be used for this. To create a photographic record simply take at least two overall pictures of each room in the property, together with close-up pics of anything of special concern, ie. anything that is dirty or damaged.
Good Tip: Even if you prepare your inventories on paper it is a good time and money saving idea to e-mail the photographs to the client.
What prices to charge?
There are no fixed rates for this kind of service. It is simply a matter of what you agree with the individual client. However, I have done some ringing around to get a feel for the market, and I have printed what seem to be average prices below. As you can see, we’re talking good money for providing this service. Bear in mind that your only investment in each job is your time and travel costs.
Remember that you should always charge more for a furnished property, since there will generally always be more to check.
One interesting thing is that each letting has a Check In Inventory, a Check Out Inventory and, probably, at least one Intermediate Inventory. So you could be earning at least three times the sum mentioned from each and every property!
I strongly recommend that you don’t have any fixed charges, nor publish a price list. It is far better to negotiate them individually with each customer. If it is a one-off inspection charge a little more. If you have a client who agrees to use you regularly offer a discount – for example 10% for at least 100 inspections each year, or 25% for 250 or more.
I think you can see from the figures above that the profit margins on this one are pretty good. But as to an overall figure of what you might make in a year, it’s difficult to say. It depends not only on how many checks you do, but what sort of clients and properties you have. Also, on whether you want a part time sideline or a much bigger full time business.
Let’s throw a few ideas around: Say you check two furnished flats in a week, making £320 and two unfurnished houses, making £420. That would be £740 a week, £2,960 in a month or £35,520 in a year. And remember, every ‘Check In’ you do will need a ‘Check Out’ at some point and possibly an Intermediate Inventory too. So £35,520 of business this year could be another £71,040 next year and so on. I won’t dwell on this as it’s fairly new and there are a lot of variables, but I think you get the idea!
More profitable add-ons
But wait, there’s more! Another thing I really like about this opportunity is that there is room for a number of profitable add-ons. Here are just a few possibilities I unearthed:
· Commercial lettings: Offices, factories and warehouses are often rented too. A great way to expand once you have a little experience.
· Retail sector: Another specialist area worth taking a look at. As well as condition/contents checks shops also need stocktaking services – a logical extension of this kind of service.
· Holiday properties: Holiday cottages, flats, chalets and caravans all need an inventory check weekly or fortnightly. Hotels also need occasional checks, to ensure the accommodation is up to standard. Great if you live in a tourist area.
Don’t forget that once you’re established you could also upscale your business by moving out of your area and going nationwide. Sell your service to letting agents and landlords all over the country and have local, self-employed agents in each area to do the checks for you. Pay them a commission for each check they do.
The Association Of Residential Letting Agents
ARLA is a professional body for letting agents. It has a handy website with useful information and also contacts for letting agents.
The UK Association Of Letting Agents
UKALA is another professional association for the letting industry. Again there is useful information and contacts for letting agents.
Great for background info. on property letting. There is also a list of existing inventory assistant (or inventory clerk) services on here so you can take a sneaky peak at what people who already offer this service are doing!
Another good site for background info. and property news.
Association of Independent Inventory Clerks (AIIC)
Professional association. Site has useful information. (Membership is not compulsory.)
Don’t forget to get your free Inventory sales copy and forms now by going to www.canonburypublishing.com/inventory