Revealed – how agents can offer landlords up to a year’s rent in advance
The lettings world, like all forms of business, is competitive, with agents battling to capture the interest of available landlords.
To get ahead, though, many agents will offer the same services and benefits – meaning they no longer have a USP.
As an agent, you will need to truly differentiate yourself from the crowd when trying to win the business of landlords, and using the Advanced Rent Option (ARO) is the perfect way to do so.
Below, we explain what the ARO is, its benefits, and how agents can offer this unique option to secure business from landlords.
What is the Advanced Rent Option?
The ARO is a rental service which allows letting agents to provide their landlords with a year’s rent in advance – even if the tenant continues to pay monthly.
By providing a lump sum, landlords are able to manage their buy-to-let mortgage payments more efficiently and grow their property portfolio.
As an example, in monetary terms, with a property that has a monthly rent of £1,200, landlords could receive an upfront lump sum of £10,231 by signing up to an ARO.
The final figure is calculated by discounting standard annual agent fees costs (£2,592), new tenancy setup fees (£395), a rent guarantee (£432) and an emergency maintenance float (£750) from the total annual rent of £14,400.
In short, the ARO tool provides landlords with flexibility and financial freedom, allowing them to pay off debts and improve their credit score.
Offering landlords peace of mind
In a market of serious buy-to-let investors, being able to offer a lump sum to landlords is a real advantage. This means they will no longer have to settle for monthly rental payments that prohibit them from making further purchases.
This is especially crucial in the current climate where the rise in unemployed and furloughed tenants has had a knock-on effect for landlords when it comes to rental payments.
What’s more, many landlords want to expand their portfolios quickly. With a year’s rent in their account, they can pay deposits much sooner and start building a larger, long-term portfolio.
Alternatively, they can put the money back into improving the property or use the advanced rent for a more personal reason, such as a holiday or a new car.
Should you consider the Advanced Rent Option?
Having been in play since 2018 – trialled by Choices Estate Agents and rolled out nationally in November 2020 – the Advanced Rent Option is a brilliant way to generate interest in your services.
Subject to an application process, the revolutionary tool is available for new and existing tenancies provided the property is compliant and the tenants pass a professional referencing check.
In such a busy market, promising freedom and flexibility through the ARO could prove the difference between signing up a landlord today and missing out on them entirely.
By selling the ARO’s many benefits, you stand a great chance of improving landlord satisfaction and generating more instructions – helping to give you the edge over your competition.
For more information about the ARO and to find out about exclusivity in your area, call us on: 020 8663 4930