The biggest opportunity for letting agents in 2015? We review GoCardless

14 April 2015

Almost from day one of running this blog, we've said that the number one under-used strategy for improving an agency's profitability is running a Google AdWords marketing campaign.

We run dozens of managed AdWords campaigns for agency clients, so it's something we know a little bit about. In a lot of cases, a well-configured campaign can double or treble the number of leads coming in to a business.

After all, who could possibly be better to advertise to than someone who is already looking for the service you provide?

This year we're adding another contender to the list of big opportunities.

But first, some background...

When we introduced PropertyAdd's (now defunct) lettings management module in 2008, we worked through a lot of the problems with letting agency processes.

Unsurprisingly, one of those problems was collecting rent on time.

Another, the admin tasks involved with chasing and processing incoming payments.

A third, the hassle factor of pushing through rent increases.

This is just an aside, but did you know that a typical small agency with 150 rental properties on the books and an average rent of £760 PCM (the UK national average) stands to earn an extra £1,500 each year just by pushing up rents by 1% on annual renewal.

That's around the same increase in income as you'd get from listing two new managed properties.

Getting back to the point though, part of the problem is down to the antiquated way that our industry still receives payment – with a surprising number of you sticking with cheque, cash, standing orders and bank transfers.

When is the last time your agency reviewed this? Quite a while I'm guessing.

So you might be surprised to hear how much direct debit has changed in the past couple of years.

Setting up a direct debit account used to be expensive, slow and time consuming. Then there was the hassle factor of processing DD payment files each month, dealing with billing failures, staying compliant with direct debit rules and the rest of it.

So imagine our delight when we came across Direct Debit provider GoCardless recently. There have been Direct Debit bureau companies around for a while (AllPay, Eazy Collect, etc.) but to our mind this firm has completely changed the landscape.

Direct Debit is now instantly available, cheap and easy to manage. It's a completely different proposition.

You can send your first bill within minutes of signing up. There's no setup fee. Processing costs are down to 1%. Signing up new customers to a direct debit mandate is as simple as sending them a web link - and most importantly there's an online billing tool which makes it easy to set up regular payment schedules.

No more expensive and hard to learn direct debit management software!

Frankly the whole thing is a breath of fresh air.

The benefits of Direct Debit payments are massive:

  • You're always paid on time
  • When you want to change rent levels, there's no risk that tenants will forget to update their standing order
  • You don't have to worry about checking the bank every morning to see who needs chasing today. Instead, you get emailed every time you get paid

If you're still getting tenants to set up standing orders, you really should look at GoCardless today.

Sign up via one of the links on this page and you'll even get a £50 credit against your first processing fees.

It might just be the biggest improvement you make to your business this year.

Leave your comment:

What you said:

29 April 2015 14:44:31
hi, Are you finally back writing articles. love your content. Can we see you back here frequently then?
04 June 2015 14:37:44
Hi Ben,

Back-ish. This site is going to undergo something of a transformation in the coming months as we launch another service.

In the meantime, we'll post stuff if we think it might be useful! :)
08 October 2015 10:30:06
GoCardless has actually been around for quite a few years now so it's surprising that its not common knowledge to a lot of people. It is so easy to use and stops you having to waste time chasing up people for payments . However as it is a young company relatively speaking, there are some drawbacks. One improvement could be to receive a 'warning ' email when penultimate DD in set period is to be collected.
16 June 2016 11:54:36
GoCardless sounds really easy the way that you've described it, so we will have a closer look. Thanks.
20 January 2017 13:43:14
As a landlord, it's absolutely vital to collect your rent payments on time each month. Unfortunately, it's also an aspect that many landlords have little control over: waiting each month to see if and when their tenants decide to pay.Communication is vitally important in all aspects of being a landlord - particularly so when it comes to rent payments. Make sure you're entirely clear about when the rent is due. You should also outline any fees or other consequences for paying the rent late. Discuss whether changing the payment date or method would help. For instance, some tenants may prefer to make smaller payments on a more frequent basis. Asking your tenants to set up a Direct Debit or standing order will reduce the chances of them forgetting to make a payment.