Property agents are seeing a decline in their business as customers are cutting out these “middlemen” and doing everything directly thanks to the development of the Internet. They are finding their own clients and avoiding the payment of commissions to property agents. So where does this leave the property agent?
Property Agents Added Value
There is a general misconception that property agents have made large commissions in the past by doing nothing more than contacting their existing base of customers. But this is quite unfair, as it would have taken a long time and a lot of experience and knowhow to build up a substantial customer base.
People were more than happy to use the services of a property agent before the Internet really took hold and saw the services that they provided as valuable. Landlords and property developers knew that they would have a much better chance at finding the customers that they needed using an agent rather than trying to do this themselves.
A Transformation is taking place in the Property Agent world
A lot of property agents that have found their revenues diminishing are making a significant transformation into property management companies. This is not that difficult a transformation as the agents are able to bring their experience in the property market to the table. Property management is a good business that offers recurring income long term.
There will be a lot of opportunities in the property management sector as the growth of the domestic and commercial markets continues. This will mean increased competition in the sector as well. The property agents like property management because of the residual income that it brings. They can rely on this income instead of having to fight for one off commissions as they did in the past.
There are still Large Transactions to fight for
There will still be larger commissions for property agents to contend for. At the lower end of the market there is a lot of pressure on the small to medium end, but there are markets at the top end where very big transactions in the millions or even billions of pounds are still going on.
Experience counts a great deal at this top end of the market. If a company wants to rent out very large property portfolios then it is very likely to turn to experienced property agents to do this. It is too much of a risk for these companies to try and find the customers that they need on their own.
How long these tope end opportunities will exist for is anybody’s guess. Property agents are still favoured at this time but the big companies may find it more cost effective to take this role in house to avoid paying out significant commissions.
Do you want to go Hands Off with your Property Investment?
Time is a problem for most people these days and successful property investment requires a lot of time. You will need to place close attention to many details to avoid making costly mistakes. One slip up could mean the difference between profit or loss in the property investment world.
Just as property agents are evaluating their options why don’t you do the same? Leave all of the details and the associated stress to the experienced property investors at CPI. For a small number of the right people we can offer a “hands off” property investment partnership. Contact us here now for more information.