Landlords need to wake up to the benefits of proptech, writes Arthur Online’s Rochelle Trup. It makes property management much easier – and more profitable
IT’S not easy being a landlord—particularly if you’re letting properties in the North of England. In 2018, the number of properties for sale decreased by 4.3%, driving prices up.
With government funding funnelled primarily to the South, affordability challenges have made it difficult to keep tenants in properties. And let’s not forget about rising costs for property owners, like the phasing out of mortgage interest relief and the addition of stamp tax on buy-to-let properties.
In an effort to increase home sales’ affordability, the Government has made it more difficult to let… and remain profitable. By raising the cost of owning rental properties, they had hoped that the average monthly rent would rise, increasing demand for affordable homes to buy. What has happened instead is a trend of short-term tenancies and empty rental properties.
In the North of England, the demand for affordable housing is much higher than the supply, leaving people desperate to buy properties (many of which are uninhabitable or unaffordable). Property investors are not fluent in the North’s housing challenges and policy makers are not listening to voices of reason in the region.
In the North of England, struggling renters have to pay more than one-third of their earnings for rent, and home-ownership hopefuls are in the same boat—they’ll have to pay more than one-third of their salaries to own a home.
Recent retirees are facing affordability issues as well. They can’t afford the rent they once did, and those who own their own homes are having trouble paying for maintenance and repairs.
While the Government subsidises to make properties more affordable in the South, Northerners continue to struggle.
All of this makes being a landlord more difficult than ever. Balancing the books, staying on top of tax legislation, offering housing that’s affordable enough for the economically burdened public, remaining profitable are all placing a major burden on today’s property owners.
Changing legislation outside of an election cycle is unlikely; so what’s a landlord (one who wants to stay in business) to do?
One thing that’s within every buy-to-let owner’s control is how they manage their properties. And with everything that’s currently cutting into their bottom line, streamlining administration processes seems to be one of the few things landlords can do to nurture their investments.
When we talk about streamlining property management, to make everything simpler and more profitable, one thing comes to mind: proptech.
What is it? It’s property management software that uses digital technology to manage, store, communicate and report all those things you used to do manually.
With good proptech, the property manager is directly connected with tenants, contractors, owners and agents. Financials are all in one place, with integrated software for accepting rent payments and filing taxes. Documents are shared over the app, eliminating the need for paper files. Filling units becomes simple, with the integration of everything from advertising, to references, to credit checks. Work orders are shared via the app and communication is open among tenants, contractors and managers.
That means landlords who are under tremendous pressure to fill units, stay on top of taxes, keep their tenants happy, make enough money to stay in business – and can do it all with the phone they have in their pocket.
What could a landlord do with the time saved by proptech? They could use that time to speak with lawmakers about the housing crisis in Northern England. They could analyse their KPIs, in order to scale their businesses and make them more profitable. And they can more effectively manage their tenancies, to increase the likelihood that tenants will stay, long-term.
And what about the cost savings? It’s up to each individual landlord how they will invest the money they save on petrol, advertising, botched repairs and maintenance due to poor communication, assistants’ salaries, and more.
There’s no arguing that the housing circumstances in the North of England are less than ideal. And if you’re a landlord in this area, you know the pressure that these conditions can put on your business.
But one thing we all know: If we want to improve something, we’ve got to free up some time to strategise and move forward with new plans of action. That takes time, and it takes money—two things that aren’t plentiful in the current environment.
So, we create that time and we reallocate that money. Proptech is a brilliant way to free up the resources you need to make a difference in your letting business – a difference that has the potential to reinvent the entire housing market.
Rochelle Trup is the co-founder of proptech firm Arthur Online