Double your rent roll
We’re all looking for new ways to increase the rent roll. Sometimes all it takes is some fresh thinking applied to existing business practices and the results begin to show. Ian Grace takes a two part approach to doubling your rent roll.
Lesson 1: They are not “landlords” – and you are not “property managers”
If you are serious about dramatically increasing your rent roll, then for almost all “property managers” the focus needs to change completely, as does the relationship with “landlords”. Trust me, I can promise that no single person, or couple, woke up one morning with a burning desire to become a “landlord”. Rather, as in my personal experience, a decision is made to invest in property for reasons of accumulating wealth, for use as superannuation and security for the future, to provide for children’s education and future etc.
So, they are “property investors” not “landlords”. Now for “property managers”, when I ask a room full of them what they do, I get an extremely long list of duties, all related to looking after the property and ensuring in turn, revenue for the office. So, instead of “property managers” managing properties for “landlords”, rather think of approaching these customers of yours with a view to working with them to increase their property investment portfolio, because that is what they would like to do.
Now when you think of it, who is better suited to work with them to do that? Who has all the knowledge about property, values and potential? You! Now you have become, and are thinking like, a property investment manager.
Now, think how often you could sell them another investment property (and then manage it for them)? On average, in most markets the answer comes back – around about every two years. So, "Not only have you made a large amount of extra sales, you effectively double your rent roll every two years and that will keep compounding!" Now, what also happens is you pick up other properties they may own, that were currently being managed by other agents. Because, as you are working with them and they now trust you, you need to know about everything they own, to assess whether they may be ready to acquire their next property (obviously, their financial adviser or bank would finalise the financial advice).
In one office alone, this amounted to almost 60 per cent increase in property managements, just by acquiring their existing customers’ other properties to manage. Finally, it also plugs another hole, when investment properties are sold off and lost to the office. Now, you can sell the property to another one of your property investors you are working with – which leads to the whole business of referrals, which is potentially massive.
Lesson 2: Referral riches
In my previous lesson I emphasised that, as in many industries, we often need to change our traditional way of thinking – sometimes with astounding results. When I talk about referrals, in conversation or to any audience, everyone always agrees they are great to receive and that they guarantee almost 100 per cent conversion, normally at full price or commission.
Where we need to change our thinking instead of feeling it is “rather nice” when a referral “comes along”, we can actually set a target for referrals each year." something that most businesses, whether real estate or not, do not do.
Firstly, look back at previously acquired managements (over the past year or two if possible) and determine what percentage of them have been repeat or referral business. Put this on a graph on your office wall, with the target you have set for repeat and referral business as well (e.g. you might currently be running at 20 per cent repeat and referral business and the target you have set is 65 per cent).
If the top 10 per cent of salespeople achieve around 65 per cent or more, of repeat and referral business, then I think we would be safe to use that as a benchmark for property management as well. Think carefully as to whether, in this instance, this would be a one year target or perhaps an 18 month to two years target – don’t set your target too high.
Now, put a system in place, to have a meaningful dialogue with every “landlord” (property investor) every three months, at which stage you ask them if there is anyone they can refer (and document that this has happened). Just the mere fact of doing this, will generate business – purely by asking the right question at the right time. Make it easy for them – when you ask, either verbally or in writing for a referral, break it into mental bite sized chunks such as:
* Family and relatives
* Friends
* Business colleagues and contacts
* Social, sporting and school contacts
When you just ask for “a referral”, they know such a lot of people, it’s hard for them to get their heads around it. This way, by breaking it into these smaller groups, it’s much easier for them to virtually put faces with names and you’ll find your response factor increases dramatically.
Now, ask yourself how often you could get a referral from each of your current “property investors” – would one only per year be feasible? If so, you have just set a target – of one referral per “landlord” per year. Simple isn’t it? If you have 300 landlords, your referral target is 300 and we know what that will do for your business (hopefully with 100% conversion).
Just follow those simple tips above and you are now on your way to targeting and managing referrals, which most businesses don’t do, thereby leaving your competitors far behind.
Known as “Mr Real Estate Advertising”, Ian Grace is an international authority on real estate advertising and customer service, for both sales and property management. He is author of the book Hundreds of Real Estate Customer Service Ideas, is an international keynote speaker and his articles are published around the world. www.iangrace.com.au
For more articles like this one checkout Rent Roll Growth
No comments:
Post a Comment