Shawn Brown, director at PayProp, looks at how to increase growth and profit in the letting industry with automation.
In times gone by, growing your rental portfolio presented you with the problem of working out how many more staff you’d need and what skills they’d need in order to grow your business.
Fortunately, with PayProp you won’t face this issue, because of the amount of automation it brings to routine work, leaving your staff to concentrate on serving customers and growing your business.
Automation drives down costs
“Payment administration can be extremely process-intensive and yield comparatively small commissions. Therefore the need to achieve economies of scale while keeping administrative costs down is front-of-mind with forward-thinking letting agents,” says Shawn Brown, director of PayProp UK.
“The use of technology to automate and reduce manual processing has become even more important to letting agents, in what is now a very competitive market. The need to drive down costs while maintaining a professional image is a must. More and more agents are looking at ways to differentiate themselves in the market with service and faster payments.”
Managing risk of non-payment
In an economy where tenants are under increasing financial pressure, the risk of rental default is very real, Brown adds. Considering the catastrophic effect that non-payment can have on the returns generated by landlords, agencies need to implement efficient and automated procedures to avoid bad debt.
The most successful agencies use sophisticated tools that create an automated, trusted environment, reducing unnecessary effort and stress for their staff. With more time, they can afford to make the mental shift from processor to front-of-house administrator. In adopting this approach agents , because they offer a service that is transparent and that a landlord is unlikely to replicate himself, he adds.
In a recent review of portfolio profitability PayProp found that rental agencies with 30 or more properties can benefit from implementing the platform, with larger agencies seeing even greater cost reductions and visibility of their business.
There appears to be some consolidation in the market place with smaller agencies being snapped up by forward-looking agencies. The ‘super agencies’ that equip themselves with automated systems and procedures such as those offered by PayProp, are realising a key benefit – operational efficiency. They are able to absorb new portfolios without having to add resources to the team. Those that haven’t done so soon realise they can no longer afford to spend time on the manual administration of rental portfolios, Brown says.
PayProp – growth without the cost
A service like PayProp, which automates property management, banking and accounting into a single safe and seamless platform, is the only way to grow without adding cost to the business.
- PayProp automatically and securely collects payments from tenants, pays all beneficiaries and transfers commissions directly into agencies’ bank accounts – in real time. In addition, tenant invoices, landlord statements and payment reminders can all be auto-generated and dispatched with PayProp, Brown says.
- PayProp also recently introduced automated payment reminders, using SMS and email. “Some 61% of customers in arrears settled their outstanding amounts within 48 hours of being reminded!” he comments.
- PayProp’s smart digitisation of business processes further allows property businesses to gain better insight across their entire portfolio, revealing who has been paid and who still needs to be.
- And due to the faster payment network that PayProp uses, agents receive their commissions faster than ever – PayProp ALWAYS pays its agents their commission first.
All these factors help improve the agent’s cash flow, Brown says. “As a result, the average PayProp client has grown portfolio turnover by 23% year on year, because PayProp does the legwork, leaving agents free to do what they love.”