Most people have some understanding as to how landlords, agents and tenants fit together but the role of the inventory clerk tends to dwell in the shadows of awareness. So if you are starting out as an inventory provider, how do you know if you have or need a service business?
The property industry
Landlords, who leave the management of their properties to letting agents and don’t trouble themselves with the detail of who does what as long as the rent comes in and the property is maintained, are not really seen as a service business despite the fact that they provide a service to tenants by providing a property for them to live in.
Those who are directly involved in the management of rental property (agents, property and portfolio managers) know all too well that it is a complex industry, which almost entirely depends on the regular and accurate preparation of varying reports from tenant referencing to inventory reports.
Without these, a landlord will be severely hampered in the maximisation of their income, the protection of their investment and their compliance with several safety requirements, contravention of which can result in heavy fines.
Amongst the ‘service businesses’ provided to the private rental sector, the provision of property reports is crucial, and as we shall see from the many different types required, an inventory clerk who can provide them has the basis of a very sound service business.
Types of property reports
The four crucial reports for rented properties, which are seen as just as important as the tenancy agreement itself, are:
- The inventory report
- The check-in
- The check-out
- Interim reports
The inventory report is time-specific as it is carried out to provide a detailed account of what the property both contains and its condition prior to the tenant taking up occupancy.
The check-in report is designed to specifically capture and showcase any changes between the inventory and when the tenant is handed the keys so it’s important to factor this reporting option into your service both for additional protection for the property and as an additional revenue stream for your business.
The interim report, while optional, is always strongly advised so that any problems with hoe the property is being maintained (or not!) can be picked up and remedied early, long before they can become a serious issue in the check-out report.
The check-out report, ideally, should be compiled as soon after the end of the tenancy as possible, to provide an accurate picture of the contents and condition of the property after the keys have been handed over in order to identify any changes, loss or damage.
Other service options to consider
There are a multitude of property inspection reports which are as equal to if not more important in order to maintain the safety of the property and the tenants. So a landlord or agent might ask an inventory clerk to carry out:
Void property checks
Vital to the maintenance of unoccupied properties, both domestic and commercial
Cleaning reports
These deals specifically with the extent and effectiveness of any pre- or post-tenancy cleaning
Property condition reports
Used for both domestic and commercial properties, they are concerned not with contents and fittings but with structural issues and essential features such as plumbing, drainage, ventilation and electrics.
Snagging reports
Predominantly carried out on new builds, they identify defects in construction and finish that need to be rectified before an owner or tenant takes occupation.
While all these reports are extremely important to protect both the property and deposit, they also build and help to maintain a professional relationship between landlord and tenant as they offer proof of the condition and safety of the rental.
Safety in the property
There are at least half a dozen other reports which a landlord needs carried out in order to comply with their legal obligations.
Fitness for Human Habitation Risk Assessment
This considers the general condition of a property including the safety of the layout, incidences of damp and poor ventilation, lack of natural light, inadequate hot and cold water or drainage, and unstable structures. The courts can enforce remedial action and award compensation to the tenant, payable by the landlord
Legionella Risk Assessment
Landlords have a duty to assess the risk of Legionella, but it need not be conducted by a professional and there is no requirement to produce a formal certificate.
Asbestos Risk Assessment
The regulations are fairly modest on this issue and a landlord’s duty extends no further than to assess the risk and manage responsibly any parts of the property where asbestos is still present.
Energy Performance Certificate (EPC)
There is already a requirement for private rental properties to have a minimum rating of E, which is fairly low, but from 2025 the minimum rises to C.
Gas Safety Inspection
Since 1998, landlords have been responsible for the safety of gas appliances, pipework leading to those appliances and flues carrying exhaust from them.
Electrical Safety Inspection (EICR)
Inspections are mandatory only every five years and they must be carried out by a qualified electrician.
They are all designed to identify and eliminate, as far as possible, risk to people and property so should be considered as a service option alongside your activities as an inventory provider.
What is a service business?
A service business is a company or individual (sole provider) that provides certain professional support and activities to their clients. In these types of businesses, the product is not necessarily considered tangible (a thing that is perceptible by touch).
Instead it is an activity that helps a third party in different areas at different levels depending on the business type such as property reports for letting agents.
What does ‘service business’ mean?
From a business standpoint, a service business ‘provides an activity or the performance of a task with a commercial purpose’.
So in the terms of an inventory provider; property reports are a service business.
Your role directly helps other businesses (letting agents) or individual (landlords, tenants) in providing services that can also add value the consumer when it comes the ‘nuances’ around the role such as consulting, cleaning, maintenance among many other service business options that now operate within the ‘gig’ economy.
Those service business styles are delivered not just physically but also virtually via platforms such as Inventory Base and other web-based systems or mobile apps.
Customers perceive the value realised from an ‘intangible activity’ such as inventory reports and related services as an essential part of the ‘service business’ model.
Although intangible seems to point to no physical activity, the role of the inventory clerk requires a physical presence at the property and as a business owner, the reporting industry hires a bigger portion of self-employed clerks than say other manufacturing or trade businesses.
The self employed business model plays a major part of the UK with around 4.23 million self-employed workers in the United Kingdom [source: Statista] and plays a major role in the development of economies as new technologies expand their reach from domestic to global.
From an economic perspective, service businesses are also known as the tertiary industry or sector – the part of a country’s economy concerned with the provision of services.
How can Inventory Base Academy help you to become a service business?
As you can see, the range of reports you could include among your services is considerable. It is therefore extremely feasible to establish a very sound business as an inventory clerk.
But you must make sure you set out on a good financial footing because there is more to running a sustainable business than simply the quality of your performance.
According to Fundsquire, a global startup and scale-up funding network, 99.9% of all companies are SMEs, accounting for over 50% of UK company turnover [1].
A survey conducted by CBInsights [2] found that 29% of startups fail because they run out of money, but of the other causes
- 42% failed for lack of a sufficient market
- 23% had the wrong personnel
- 18% had poor pricing
- 17% had a poor product offering or business model and,
- 14% did not carry out effective marketing or ignored their customers
Every business needs commitment, knowledge and expertise to survive.
If you are setting out as an inventory clerk then thorough training in every aspect of your business is essential.
At Inventory Base Academy that’s exactly what we provide.
Our online study material and support will give you the perfect grounding in the mechanisms and mechanics of business formation, branding, marketing and preparation of a business plan as well as all you need to know about the rental industry and the role of the inventory clerk.
Equip yourself with everything you could need to establish and expand a successful business supplying vital services to a flourishing property sector.
To find out more, sign up here and start you Inventrepreneur journey today:
Resources:
[1] https://fundsquire.co.uk/startup-statistics/
[2] https://www.cbinsights.com/research/startup-failure-reasons-top/