Monthly Archives: February 2019

Property management rates are under increasing pressure across Australia, with agent profits suffering as a result. In fact, the average profit margins have dropped from 16.8% to 15.4% in just 2 years (2014-2016).

And as more fixed-fee and low-cost competitors enter the market, it’s getting harder and harder for real estate agents to command the same rates as they had before. So, increasing rent roll profitability is essential to the long-term success of your business.

Fortunately, there are a number of ways you can help this to happen. Read on to find out more:

1) Look at Quality, not Quantity

It’s easy to get caught up in growing your rent roll as fast as possible, however this isn’t always the best way to go.

You need to focus on quality over quantity. For example, 200 properties at $300/week is better than 300 properties at $200/week. Whilst both make the same money, the larger one requires more time, money and staff, as well as resources, to manage. This increases costs and has a heavy impact on profitability.

2) Understand the Market

Your clients don’t just engage you for your property management know-how – they also do so to tap into your industry expertise and knowledge. This is exactly why it’s crucial that you keep your finger on the pulse of new industry developments and market trends, as it allows you to add more value to your clients.

This doesn’t have to be a complicated process – it can be as simple as knowing what the average rental value of similar neighbourhood properties is so you can help clients to reduce vacancy rates and boost their returns. As a result, you’ll promote yourself as an experienced property manager, which will help you to grow your rental roll down the line.

3) Offer Premium Customer Service

It’s common for agents to drop their fees or offer heavy long-term discounts to win new clients. Although this may work for clients who are watching their budgets, it’s not a sustainable long-term plan.

Instead of lowering your charges, instead focus on providing your clients with premium customer support. This can be as simple as making sure you get back to them the same day, they contact you, or by making your process transparent by giving them access to a client portal where they can track progress. Research shows that clients are willing to pay up to 16% more for high-level customer service, so this poses a great opportunity for you to increase your fees.

4) Display Your Value

Don’t wait for clients to find out – let them know about the value you offer by broadcasting it across your marketing channels. This could include anything from encouraging clients to leave reviews on Google or by sharing testimonials on your social accounts. They’ll all help to win you new business at a lower cost.

85% of consumers trust online reviews as much as personal recommendations, so a strong digital presence can have a large impact on your end profitability.

5) Raise Your Fees

For many clients, your fees will be indicative of the level of service they should expect to receive. Additionally, it’s also the simplest way to boost your bottom line.

However, the issue you’ll likely face will be when to increase your fees and how to communicate this to existing clients, without losing them.

Maybe you’re increasing your fees to match a rise in legislative compliance costs. Maybe you’re simply doing it because it’s been ages since you did. Whatever the reason, you need to be able to demonstrate why it’s happening and provide adequate notice to your clients.

You also need to have a contingency plan for those clients who’ll be reluctant to hand over more money for fees. Whether you offer them a longer contract term or limited services, make sure you’ve got it covered.

In a time before emails, instant messaging and telecommuting, managing deadlines was much easier. Mail came once a day in the morning and it was a whole lot easier for business professionals to prioritise tasks and get them done.

However, nowadays things aren’t quite so simple, and many business professionals struggle to tick off all the tasks they need to. So, what can you do? In this article, we’re going to run through 6 key actions you can take to improve your productivity and time management. Read on to find out more.

1) Start out with the Future in Mind

Never implement a system that can’t easily adapt to your business growth. Many agents don’t create workflow systems when they start their own businesses, let alone systems that can cope with business growth. If you want to have a system that will work well and continue to do so years into the future, make sure it’s scalable from the start.

2) Manage Growth Effectively

Managing your day from start to finish effectively requires you to be able to manage growth. This requires a growth matrix.

A growth matrix will help you to keep tabs on the number of doors you have to manage and help you work out when you need to recruit more team members. By investing in a growth matrix, you’ll be able to ensure things move smoothly as your business scales up.

3) Take Control of your Variables

It sounds complicated, but it doesn’t have to be. Start every day with a team huddle and delegate tasks as you see fit to maintain your workflow. This will also give you a great podium from which you can track progress and have team members report back to you on any issues they find.

4) Stay Consistent with Your Standards

Don’t fluctuate or make excuses – set a benchmark standard from day 1 and stick to it. The only change to service quality you should see is when you improve on it.

Don’t forget – your client has a relationship with your business and brand, not an individual within it. Regardless of who your client deals with, a consistently high service standard must be maintained.

5) Take the Lead

If you wait around for tasks to get done, you’re going to run into problems. So, take the lead and make sure that your workflow stays efficient. If you can keep your team members clear on their roles and clients clear on their responsibilities, everything works seamlessly.

It will take a conductor to make this work, and that person needs to be you. This is the only way you’ll be able to maintain service standards and ensure tasks get completed.

6) Be Careful Where You Spend

Controlled spending means a controlled business. Only spend if it will allow you to earn down the line. If you’re spending out, it should aide savings by increasing your earning power on doors managed and cutting down costs faced on client properties. This will give you a greater return on investment, leaving you with more spare capital to hire additional team members when needed.

Most agents, rather logically, rely on growing their business during periods when the market is also growing.

However, this isn’t sustainable in the long-term because the market isn’t always growing. In fact, the market typically peaks every 7-12 years, although it’s beginning to happen more frequently thanks to the growth of smartphones and digital technologies, which are accelerating the speed of everything.

Currently, in Australia, the market is declining in most of the country. As a result, if you want to continue growing your business, then you need to be intentional about your numbers, as this is the only way to keep pushing forward against the market.

To help you, here are some things you should keep in mind:

Decrease the Cost of Lead Acquisition

One of the easiest ways to do this is to focus on delivering a stellar customer experience. This will cause people to spread the word about you, which delivers business to your door without you having to incur an additional expense. Furthermore, it allows you to reduce your margins, boosting profitability and stimulating growth.

Reduce Churn

Work to hang onto your past clients, as these tend to pay higher fees. This means selling your property management properties to current investors and also doing an audit of your past client program to make sure people aren’t running for the hills.

Expand into New Markets

A great way to grow is to work to become active in different markets. And we’re not just referring to geographic location. Try to get a foothold in the apartment market, low end, high end, etc., as this will allow you to diversify and better withstand periods of stalled growth in the overall market.

Focus on Productivity

One of the ways to grow is to try and get more out of the time you and your fellow agents spend working. This could mean implementing some automated solutions to help you get the information you need more quickly, or it could mean redoing some of your processes. Not only will this help you book more appointments and keep clients coming in, but it will also help you reduce the time your clients’ properties spend on the market, which makes people happier and coming back.

Increase Customer Spend

Obviously, you don’t want to take advantage of your customers, but there are ways for you to make more money off them. For example, you could invest in more targeted marketing. This will boost the amount of money you can charge, but if you do it right then it will also make you more successful, which makes the extra money clients spend worth it.

In conclusion, you should not be limiting your attention to growth to periods where the overall market is growing. You need to be building your business so that it’s resilient during any and all market conditions.