Most rent rolls don’t grow! What I mean is that they don’t really grow!
Nearly all rental departments have some growth but they suffer a typical stunted growth pattern. Measured a month at a time it goes like this: March- 4 new management and a loss of 2, April- 1 new one and a loss of 3, May- 1 new management and a loss of 2, June- 3 new management and a loss of 1. Of course, the greater your numbers the more the growth and loss. But the pattern is still the same.
With this pattern of growth rent rolls increase in size very slowly, if not at all. In some cases, the rent roll shrinks in size as unavoidable losses (properties sold, landlords taking occupancy etc) exceeds new management coming in. This style of growth is very common.
You achieve only what you are focussed on
The sad fact is that most principals want more and set high goals for growth. However most never achieve it and they fail to realise why. It leads to disappoint and frustration.
This problem does have an answer, one that more real estate companies are awakening to. Before I explain it, let me illustrate my next point with a story.
John the real estate business owner has assigned Pam (his real estate administrator) a new role. On top of her administration role, she is to also go out to list and sell real estate. They agreed beforehand to a basic plan on how to do it. Despite her lack of selling skills (but with some guidance), they both believed it would work. Pam was very enthusiastic about the idea.
However, after several weeks Pam had not really bought in any new listings for sale and had not sold anything. John was disappointed due to the initial effort and asked her why, but Pam just said she has been ‘too busy’ with admin work and had not been able to ‘find the time’ to sell real estate. She had also been to several listing appointments but she did not get them signed up. She just said that other companies were able to do it cheaper, hence the reason they did not list with her.
I am sure you are thinking about a number of reasons why John is not getting more sale listings for his company. John ‘must be crazy’ to not see the obvious, I hear you say!
In real estate sales, it is clear that the real estate administrator is not given the job to list and sell properties. A person is employed full-time with sales skills to go out and get the listings and sell. They are employed solely for this purpose.
My point is this. What becomes a primary focus is that which will be accomplished! Place in a secondary focus and it probably will not happen.
Employ a Business Development Manager
If a real estate business owner wishes to have serious growth in their rent roll, the same principle must be applied to be able to get solid growth in property numbers.
Employ a person to focus solely on property management and that is what they will do. If you employ someone to focus solely on rent roll growth (with the right person, resourcing and training ) that is what they will do!
But employ a person to manage the rent roll and also grow property numbers ‘on the side’, this is purely subjective to their number one workload focus! If they are too busy it will simply not get done! Properties will usually just ‘dribble in’.
As a property management consultant, the companies that I work with who employ a full-time person to grow the rent roll are the ones who enjoy solid growth. 10–15 new managements per month per person is not uncommon. I also have knowledge of a person interstate who has achieved 30-40 new properties a month!
Here are some reasons why the focus is now turning toward employing people for the core role of bringing new management listings:
1. The availability and opportunity of employing the ‘all-in-one’ skilled experienced property manager are becoming less and less. There are more property managers leaving the industry than coming in. The emphasis is driving towards property management staff who specialise in specific tasks in property management (new business as well as repairs and maintenance, lettings, inspections etc).
2. The property management minded person is generally suited to processing work and systems. Their mindset and personal make-up are for such. Most property managers do not have the ability to also go out and sell the company services (or the desire to be salespeople). I have found that only 20% of property management staff have sales skills, or have the potential to learn.
3. A person focussed on listing properties for management is likely to bring back larger management numbers and expose themselves to more listing opportunities than a person asked to do this ‘on the side’.
4. Specific growth objectives can be reached far more effectively with people employed to solely focus on them.
Of course, many things must be considered when implementing such a position, and we have the ability to consult any department considering such a move.
Growth is there for the taking to whoever wants it. Of course, such a position cannot succeed without the right resource, training and a rent roll growth plan.
Change is constant and those that adapt survive.
Be the best you, you can be!