07 5562 0037Discover and tap into a simple success tip for rent roll growth. It is easier than you think to achieve new management growth results by embracing and implementing the R&R Concept.
There are countless strategies and activities that you can implement each month to generate leads and new business that I share with my coaching clients during the process of developing 'Annual Business Growth Marketing Action Plans'.
In this article, I would like to share with you one very simple tip that I call the R&R Concept for growth that you can implement today.
Focus on the big picture – Get other people to do your rent roll growth work – Smart marketers plant seeds – You reap what you sow.
Potential business is right under your nose and many agencies are missing out on new business opportunities every day.
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There are three (3) main ways to grow a rent roll:
- Natural growth, which is predominantly new business from the sales department, and costs you nothing other than time to follow up and secure the business.
- Brand and community awareness, marketing and advertising, which requires a carefully thought-out annual strategic action plan (to understand the activities that you need to engage in and implement), time and an investment budget.
- Or you can fast-track your growth and purchase a rent roll.
CALCULATING THE AVERAGE ASSET VALUE OF A NEW MANAGEMENT PROPERTY
The average medium rent in Australia is approx. $600pw^ and the average management fees are typically around 6-8% (low 3% to a high of 12%) depending on the State location.
SIMPLE CALCULATION
Average Conservative Asset Value Calculation Based on One (1) New Management
$600pw X 5% management fee X 52 weeks X $2.80 multiplier = $4,368
Each time you secure a new management property, you are not only increasing the asset value of your rent roll; you are generating tangible income (not included in the base management income of the multiplier) of let fees, tenancy renewal fees, and additional service fees.
When planning your growth strategy, the question to ask is 'Do you potentially stay stagnant and rely on the rise and fall of new and lost managements, invest in brand and community awareness, marketing and advertising strategies to grow the rent roll, or fast-track your growth and buy a rent roll?
Your growth strategy will depend on your future goals, marketing and advertising skillsets, business objectives, team structure to embrace a BDM, time and the money you are willing to invest.
The R&R Concept – Referrals & Rewards
There are countless strategies and activities that you can embrace and implement to grow the rent roll. However, the key is to invest the least possible time, to reach the largest possible target market – known as the Network 'Referral & Reward' Concept, where you develop connections and relationships with one person, who can share your services with their clients, while you motivate your property investor reach to secure new business through rewards.
The first step is to identify your target market or professional referrers, who have connections with investors:
- Accountants
- Conveyancers
- Solicitors
- Financial Advisors
- Mortgage Brokers
- Bank Managers
- Local business professionals, traders, and shop owners
- Builders and developers
- Town planners
Then identify clients who you connect with that may want to buy, sell, or seek your property management services:
- Potential investment buyers from open homes
- Current landlords looking to purchase or who own additional investment properties
- Prospective tenants looking to buy or sell
- Current tenants looking to buy or sell
- Current tradespeople with investment properties
The next step… is often overlooked, which is to offer a ‘Reward’ or incentive.
It is human nature to ask, “What’ is in it for me”?
There are many professional referrers, who will recommend your services based on the relationships that you have formed, accompanied by their trust that you will deliver a superior level of service to their clients.
However, monetary incentives for new business will motivate someone outside of your network to act and create a higher return on new management referral success.
If the average asset value of a management property is $4,368 + additional income, then an astute smart business owner will factor this into their advertising and marketing budget to secure new business at a fraction of the asset value.
I once worked with a successful business client, who paid property developers $1,000 for every new management, which was re-couped in the first 12 months of additional income outside of the asset value.
Your referral budget for new business may not be $1,000. However, I hope this article has created some outside of the box thinking in how you can fast-track the growth of your rent roll without having to potentially buy one.
The R&R Advertising & Marketing Tip
Advertise and market your R&R Concept without having to constantly invest time thinking about it.
Include a gift card graphic and a standard statement “We pay $250 or $500 for every new management referred” on:
- The back of your business card
- Bottom of email signatures
- Standard letters
- Welcome to your new home introduction letter
- Newsletters
- Letterbox drops
This style of referral marketing is being embraced by many different professional industry providers.
Owning a successful property management business is about delivering a superior level of service to command the highest possible management fee, while being smart in how you grow your rent roll.
Disclaimer: In some States, it is legislated to disclosed referral commissions, such as commissions received from landlord protection insurance companies and utility providers, etc. If you are concerned about full disclosure on offering a Referral Reward… Promote and varket the concept on your Managing Appointment Agreement: “We pay $250 or $500 for every new management referred”.
^ CoreLogic Data, 2024
Author: Debbie Palmer
