Financial Use Case: Achieving a 40% Profit Margin
It might not be an easy decision for an agent to make – to outsource your client accounting and property management services but when executed effectively and professionally, it can be a great strategy for saving time and increasing your profit margin, especially in a more challenging financial climate.
What do we do?
Rentancy provides bookkeeping, client accounting and property management services to letting agents, landlords and propcos – assisting with rent collection, daily reconciliation, landlord and contractor payments, day-to-day maintenance and reporting and more. These services are delivered by qualified professionals and at a cost-effective rate helping you increase your profit margin as you scale your business.
Rentancy offers both the ability to utilise your existing software technology or you can use our developed all-in-one back-office PMS solution orientated around Xero. This is ideal for agents, landlords and propcos already using Xero as it removes the invoice duplication and reconciliation headaches that often arise when operating multiple software systems.
Rentancy vs In-house team?
There are advantages to hiring a full in-house team for property management and client accounting. However, as seen in the Plimsol report 2022, the average profit margin of an agency is only around 11.9% which all things considered, is low especially when you compare this to other service sectors or the US market, where the average property agency earns 30%-40% profit margins.
So, the question is: how can UK agencies increase their profit margins? There are two paths available; either increase revenue or cut costs.
With Rentancy, you can achieve both of these outcomes. When we look at the traditional setup of an agency, with for example a 200-unit portfolio, this will often consist of an Owner or Director and a combination of full-time and part-time property managers and accounts assistants.
1. Owner / Director
2. Accounts Administrator
3. Property Manager(s)
We have benchmarked the cost of 2 full-time in-house employees vs our team to give an insight into the financial benefits of utilising Rentancy.
While there are more factors than purely financial to consider, 39.1% is an attractive saving.
Plus managing in-house staff also brings additional responsibilities of hiring, training and managing staff. And the challenge of keeping staff productivity and fully utilised.
It’s always interesting to see the financial figures. With every client we serve, we run their business through our ROI calculator to demonstrate the financial benefits of scaling with Rentancy.
So what else does Rentancy bring to the table?
Gain access to talent
Finding talented accounts and property management professionals in your local area can be tough. Instead, we bring friendly accredited professionals with experience using all the leading property software solutions and familiar with industry best practices.
Our teams are familiar with working with the leading property software packages. We can help you find automation savings and productivity improvements.
Rentancy brings fresh air to your business and gives you time back to invest in finding new clients or to look for the next project opportunity. You still have your finger on the pulse of your portfolio, but without being stuck in the office.
Scale with ease
With Rentancy, our cost structure allows you to scale without fixed cost risk, you effectively pay based on your portfolio size which is very valuable and reduces operational risk as you scale in either direction.
Rentancy is registered under the Client Money Protection scheme, which provides peace of mind to landlords and tenants throughout the UK that their money is safe in any case of misappropriation of the rent, deposit or other client funds.
Accounting Records kept safe
We have excellent knowledge of the property industry and consistently provide the customers with sound guidance with client monies and ensure our clients are totally safeguarded.
Your Client Accounts
We keep our customers up to date with the regular changes and keep them informed of what they need to know to keep their clients and businesses protected.