It is common knowledge that the Internet is changing the way in which the property market operates although until recently this had focused more upon the buyer/seller market. The traditional method of finding a tenant has remained fairly unchanged for some time although new opportunities are now emerging which are disrupting the traditional market to the benefit of landlords and tenants.
Traditional costs
As house prices in the UK, as one example, continue to rise, and we see greater opportunities for employment mobility, the need for short, medium and long-term rental properties is growing. Matching suitable properties with suitable tenants has not always been easy using traditional methods and can often be costly with no guarantee of a successful outcome. Some of the pros and cons of more traditional landlord advertising methods include:-
Ad hoc advertising online/offline
There are many opportunities to advertise your property both online and off-line although there are a number of issues to be aware of:-
• Potentially expensive upfront advertising costs for focused listings
• Unfocused listings can be relatively cheap with often poor results
• Minimum advertising periods can lead to wasted expenditure
• Significant time wasted chasing unsuitable/general enquiries
Letting agents
It is fair to say that advertising through letting agents offers a more focused approach but there are other issues to take into consideration:-
• Relatively expensive listing fees – with no guarantee of success
• Relatively expensive success fees when agent finds a tenant
• Additional costs such as management fees and rent collection are sometimes part of the package
While there is no doubt that using traditional advertising methods, or going through more professional channels such as letting agents, can work for some landlords, the upfront fees can mount up before a tenant is found. As a consequence, companies such as Spotahome offer a more success-related method of locating suitable tenants – where there is security for all parties involved.
Reducing upfront costs
A system where landlords are able to list their properties in a professional manner using state-of-the-art video technology, property plans as well as managing tenant expectations with an honest and open listing, is for many the impossible dream. However, this is where Spotahome is disrupting the traditional letting market to the benefit of landlords and tenants.
The fact there are benefits for both landlords and tenants gives both parties confidence that they are not wasting their time. This has also led to greater success rates when matching rental properties with tenant requirements. Some of the main factors to consider as a landlord looking for a tenant via Spotahome include: –
• Free online listing of properties including state-of-the-art video, extensive online promotion and highly focused property and neighbourhood information
• Landlords only pay a modest fee when a tenant has been found for their property
• Tenant’s first payment to landlord (paid 48 hours after they move into property) is held by Spotahome giving both parties greater confidence in the system
• Spotahome guarantee covering rental arrears over and above the deposit
• Spotahome guarantee to cover damage to property over and above the tenant deposit
When you consider traditional methods of promoting property, such as online/offline advertising and letting agents, there can be significant upfront fees with no guarantee of ever finding a tenant.
It is worth noting that any successful tenancy agreement will be between the landlord and the tenant with rent, deposits and other charges to be arranged between the parties. Spotahome has no ongoing arrangement with either party thereby reducing ongoing costs.
Conclusion
The online market has literally changed the way we shop, search for information and match landlords and tenants in a timely manner. Very few property businesses are able to operate on a purely success fee basis as well as offering security/confidence to both landlords and tenants. To say this has disrupted the traditional market is an understatement. There is now significant pressure on the profit margins of traditional advertising/letting services, many of which are unable to cope with their online competitors.