Hot Tips for Launching a Successful Property Sourcing Business on a Low Budget
Property sourcing is a highly competitive industry and getting your business up and running isn’t easy, especially if finances are limited. Fortunately, here are some solutions to start property sourcing on a budget.
Generally speaking, the more effort and money that goes into marketing, the more success you will see. However, when you don’t have a huge marketing budget at your disposal, you need to concentrate on targeting the right people to get better results.
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Our first piece of advice is to decide on the sourcing strategy that you want to get. Stick to that strategy so that your marketing message is very specific to the type of deal that you are going after. So decide early on whether it is a landlords’ guaranteed rental service or a BMV deal that you want to do a deal for.
Look for easy deals
Don’t make life hard for yourself by going after a deal type that is hard to do. You want to find one that is going to be quick and easy to sell on. For example, if you were going for a BMV deal at £900,000 you will restrict the market that you can sell that deal to. On the flip side, if you go for a rent-to-rent property with net cash flow of £500-600 then you have a better chance of selling that deal on quickly.
Other factors can slow down deals such as conveyancing, so again in the case of the BMV you would need to go through conveyancing but you wouldn’t with rent-to-rent. Anything that doesn’t involve a purchase will make the transaction quicker. So target those quick deals, especially if you are still working full time whilst trying to start up a property sourcing business. Some deal types will require your availability five days a week, 40 hours a week but the more simplistic deals will not.
At the moment rent to rent is probably the easiest strategy to source for right now when you are working to a low budget. So if you decide on this type of strategy, the next part of the process is your marketing approach.
For good results, the key is to build a very specific, targeted list for the type of deal you are putting together. So instead of sending out information to a long list of people on the land registry database, you want to send to a smaller selection of more qualified recipients. This way you will get more results in terms of the ‘responses vs number of letters sent out’ ratio.
Here are four free or low cost techniques for you to use to build your targeted lists:
1. Private ads
Private ads like the ones on Gumtree, Preloved, UKClassifieds, Spareroom.com.uk websites are a good way of finding private landlords who are trying (and often struggling) to fill the properties themselves. You can contact them directly to offer a guaranteed rent service and then move onto packaging and selling the deal. Because this is a technique that costs you no money, there will of course be many others out there doing the same thing. The key is to be quick off the mark and pick up the phone and call them rather than emailing back and forth and wasting crucial time. You are giving them a great offer so they are likely to be happy to hear from you.
2. Social media leads
Another method of property sourcing on a budget is to get onto Facebook and other social media platforms to find qualified leads. So people that belong to specific area groups i.e. properties to rent in your local town or city. Just contact the landlords directly and post in the Facebook group that you offer a guaranteed rent service. Post in as many groups as you can.
LinkedIn is another good place to find landlords that are looking for help. You are less likely to find people advertising property on LinkedIn but they may be looking for help and advice from groups, or you might find property investors looking for deals.
Okay so eBay doesn’t have loads of properties for sale but some people do use this channel. So take a look at what is being advertised and see if they are open to guaranteed rent service by contacting them directly.
4. Direct mail
The more traditional method of direct mail will come at a cost but usually has great returns. Now remember what we said about targeted lists, we don’t want to just send out direct mail to every house on every street in hope. Go onto Rightmove and other portals to find properties that have been up for more than three months, or rentals that have been on for over six weeks. In your letter, include an incentive for the tenants to pass on your details to their landlord or they will just bin it.
Direct mail costs around 45p to print, pack and send each letter. So for £100 you can send 222 letters that should deliver a decent ROI. With the free methods, you really have to work harder as everyone will be trying to do the same. Another way of property sourcing on a budget is by getting the HMO list from your local council and your direct mail should see even better results. Remember to send them a freedom of information request and feel free to use use the email template we’ve provided as a free download below.
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