Even after many years in the industry, it amazes me that most business owners are happy to budget for up to 15% losses from the business each year. I appreciate, in business, you occasionally need to accept the status quo, things sometimes fall outside the operational capabilities of the business. What if I told you the business has complete control over the rate at which it churns customers. What if you could reduce your attrition rate to zero.
Let’s break this into two key areas. There are often unique cases, but let’s look at the mainstream ones. First, are service issues to your customer base. This can often be the highest percentage of lost managements. Service inadequacies are a direct result of team performance. I could dig deep here. In fact, you will find a YouTube presentation addressing this in detail, but the long and short of it is, if you haven’t defined your team’s goals, supported their endeavours to achieve them and measured and celebrated success, you will struggle to align them in your efforts to deliver a superior service to your clients. A high-performing team with a well-documented service schedule will deliver the highest service levels to your client base, retaining even the biggest scepticists of your business.
Second, let’s look at sales out of the rent roll. This would be the second biggest reason managements are walking out your door. Lost managements, due to sales, could make up 5-8 percentage points of your losses. If I told you 20-30% of your existing owners could be in the market to buy another investment property in the next 12 months, would you be surprised?
With each property, you manage you hold valuable data. The market sales and rental value, return on investment, maintenance costs, days on market and tenant history. These are all valuable data points investors look for when buying an investment property and your agency is sitting on them.
When a landlord in your rent roll shows signs of selling, take the liberty of presenting a sales information profile of their property to them. Have a template in place. Use the professional marketing photos you already have and pull these data points into a professional investor property profile. Once your landlord sees this, they won’t hesitate to give you the listing for sale. Your first move is to get this to all your landlords and in particular the 20%-30% you already have tagged in your database as potential buyers in the near future. The joy of recycling a property inside your rent roll is you get to retain the management and make a commission on the sale.
There is a real opportunity here for a business to leverage the resources of a buyer’s agent or buyer’s advocate. The buyer's advocate’s role would be to regularly communicate with each of your clients. They would have intimate knowledge of each and know which ones may be considering buying or selling a property in the near future. You have more owners looking to buy in your business than looking to sell. The buyers advocate can be out there in the market looking for other potential investment properties to suit both your investors and your business.