Our recent roundtable on the government’s proposed ban on tenant fees generated a range of tips for growing your business.
We recently discussed how you can review you cost base and this week, we’re examining how to review the fees you charge.
Here's five tips to get you started...
Review alignment with your business values
A great place to start your review is by ensuring that your fee structure is aligned to your business values, as this will help you to build client trust.
For example, there’s no point in claiming to offer the most competitive fees in your area if you charge way beyond those of your closest rival.
Equally, if transparency is at the heart of your business ethos, you must take care to create a simple and clear fee structure that reflects this value.
Remember, your starting point should always be an assessment of your business values and never simply an aim to undercut your competitors, particularly if they operate in a completely different market place.
Consider your market position
There is a very good reason why you should avoid becoming preoccupied with undercutting your rivals’ fees: it’s rarely sustainable.
You must first assess whether your fees suit the market place in which you operate.
Yes, an 18.5% property management fee sounds great, but if you’re operating in a market in which rents average, say, £300 per calendar month, they’re unlikely to win you any business. Even if they do, you’re unlikely to be able to retain these clients for long.
This may sound obvious to many of you, but it’s surprising just how many agents set unsustainable fees as a result of becoming blindsided by an obsession to undercut their rivals.
Review your business expenses
Your business expenses will fluctuate over time, which is why you should regularly review your fee structure.
You need to ensure that you build into your fees any increase in your expenses.