The rental market has moved on since Peter Rachman’s day so why are tenants still so undervalued?
Perec ‘Peter’ Rachman was a post-WW2 estate agent and lettings agent who had a huge personal portfolio of slum tenancies in West London. The term ‘Rachmanism’ continues to be used to this day, referring to all landlord practices that are at odds with the rights and wellbeing of tenants.
Think overcrowding; uninhabitable rented accommodation; dilapidations. Think intimidation and sharp practice and you are about there. Throw in some underworld activity, including a brush with the Krays, and you are definitely in Mr Rachman’s world.
It’s clear that, in the years since Rachman was operating, there have been oodles of regulation and reform. So, while it’s also clear that, in every market-place, tiny pockets of slum-type housing continue to be rented out to tenants, on the whole, things have progressed. But, to my mind the rental sector has, and will forever have, a bad reputation because of the economic model it is based upon.
Consider this: Mr Landlord provides accommodation to the tenant, maybe a brand new build-to-rent semi-detached residence. The tenant pays the rent, month after month, until, at some point, the tenant thinks: ‘I am in a continuous loop! Mr Landlord is getting rich, I am living in a residence which I do not own and, month by month, gets a little more scrappy’.
Over time, this ‘relationship’ fractures, especially as the rent seems to be forever increasing. The tenant may have four walls and a roof, but they’re caught up in groundhog day, no advancement, no emerging benefits to the rental experience.
This niggling tension will fester and, eventually, something will break the camel’s back. Maybe the boiler goes on the blink, or the electrics go ‘sparky’, or the roof leaks with rainfall. External factors, too, can be the final straw. This might be a change of circumstance for the tenant, such a redundancy or a relationship break up, or it might be caused by changes in the economic landscape.
But, if property is rented via a reputable Lettings agent, might this friction be minimised or, at least, mitigated? Unfortunately, no, this is rarely the case.
We can look at a medium-sized Lettings agency in a medium-sized town. Do they truly look after their tenants/their landlord’s tenants in a proactive, nurturing manner? Rarely.
Am I being too harsh? Am I saying that Rachmanism is at play, naughty henchmen, unscrewing front doors and evicting tenants in the dead of night? No, what I’m saying is that professional Lettings staff who are highly trained are too thinly stretched to nurture tenant relationships and continue engaging with them once in situ.
Let me explain. The Landlord wants a property let, the Letting agent has to perform several key tasks prior to the tenancy coming into being - this is labour intensive. Once the tenant is in, there is rarely any time for after-sales service. The only catalyst for further contact from the Letting agent who is forever on the hamster wheel of front-end service, is when the tenant has a ‘problem’ or wants to move out.
If only there was some way to end this ‘schism’, the terrible blanket of perceived indifference, which, in fact, is not that at all but instead a simple case of the Letting agent lacking the time and capacity to care. If only there was a way...
I created my own solution
I have been a private landlord for years, longer than I’ve been in PropTech. In fact, it was being a landlord which led me to PropTech. You see, there was a period of time when I was suddenly having lots of issues with tenants, most notably they were falling behind on their rent. When I asked my letting agent why, they had no answer for me, no insight.
Why? Because they hadn’t engaged with my tenants since they’d moved in. And neither had I because I was paying the agent to do it for me. So I took control and worked to address the problem myself. In the process, and almost by accident, I created Vaboo, a smart, rewarding, and cost effective way for landlords and agents to enter ongoing and rewarding engagement with their tenants.
When I spoke to my trouble tenants to find out why they weren’t paying their rent, I was struck by the lack of autonomy that so many renters have over their lives. They are at the mercy of so many uncontrollable factors, just one of which can mean they can’t afford that month’s rent.
But, instead of shouting at them and kicking them out, I worked to help them. Together, we worked out ways of catching up with arrears and ensuring future rent payments aren’t a problem. As soon as I did this, the trouble all but disappeared but, more than that, my turnover rates evaporated! My tenants felt cared for, felt like they had at least a little control over their lives. This is vital for everyone, and the least we deserve!
The only thing I had really done was engage with them. Talk to them on a human level. Get to know their wants and needs. It’s basic customer relations. But so many landlords ignore it, seeing tenants as a necessary evil, not valued customers.
This initial idea grew into Vaboo which, today, provides letting agents and landlords with a tenant engagement and rewards platform which not only gives tenants exclusive access to a wide range of retail and lifestyle discounts, but in doing so, also produces immense levels of engagement to create a vital dynamic shift in the relationship between agents and their customers.
The Vaboo customer rewards and engagement platform makes Lettings businesses stand out from their competition and win new business, and the resulting data gives great insight into who your best customers are, enabling you to uncover and nurture new opportunities in a largely hands-off manner.
Vaboo obtains key data from tenants which topflight Letting agents use to keep their tenants happy which, in turn, means less voids and less tenant turnover. This is particularly valuable in the present pandemic situation we are in.
Vaboo’s value doesn’t end with its ability to boost an agent’s customer experience and differentiate them in the market because, in the process of doing so, the platform also offers more quantifiable benefits, not least the role it plays in continuous tenant engagement.
At Vaboo, we handle all communications with the tenants, meaning agents don’t have to spend the time doing it. For example, creating content to keep tenants engaged with the agent’s service is incredibly difficult, especially when running on a tight budget, so Vaboo provides this at a cost-effective rate.
All of this is done as a white label solution, so all the tenant sees is a seamless landlord/agent service. For example, every month we send an email inviting tenants to enter a prize draw to win their rent paid for a month, all they have to do is answer a few basic questions, set by each individual landlord or agent. These emails get an exceptionally high engagement rate: often 50% and up.
The infamous Peter Rachman used a heavy hand and an address book full of bad men to provide his tenants with a ‘service’, or, perhaps more accurately, keep them in line. But there’s a reason Rachman Real Estate doesn’t continue to be a well-known property brand to this day, because lacklustre tenant service is nothing more than a cash grab. Get as much money out of them as possible before they realise what’s going on. This is not a sustainable model, especially today when tenants are so incredibly savvy and demanding.
However, by getting to know tenants and constantly engaging them with proactive, positive correspondence, the sense of respect and fair play they feel will keep them happily renting with you for years.