Regularly I hear from Real Estate Principals that they want to grow their rent roll . It is tempting to say “take this tablet and you will get 100 new managements” and I am sure then that they would all line up for a dose of this special medicine. These days I see an insatiable thirst for Real Estate Companies to grow the rent roll in the office.
I see the reasons for this as the Property Management profession changing and the office Principals are looking to grow in order to protect their company. We are seeing these sorts of changes all over the globe and in many different professions and industries .
I remember when I changed my office to Property Management only back in the 1980s that many people criticised me. It was suggested that the business wouldn’t be able to make money and I remember someone asking me if I needed a Real Estate licence to run a rent roll . Unlike these critics I was well aware of the power of the Property Management division in an office along with the cashflow and assets value it can provide if operated correctly.
Today I see principals investing heavily into the Property Management departments and employing a BDM to drive the growth and I say it’s about time .The problem has been that 98% of real estate principals are sales people who are running their business. This does not mean that they have the skills to run a profitable business into the future - don’t worry I was a salesperson too !! I believe the Real Estate model that I have seen all over Australia and having been operating this way for the last 20 yrs, being made up of an office with 6 salespeople, 200 -300 properties in the rent roll with the rent roll paying the rent , power, wages ,general overheads and the sales division making up the cream or profit is unlikely to stay that way.
Today I see principals looking at the rent rolls as they should a business that provides cashflow .It is an asset that can be sold or borrowed against and above all maintain the market share of your company into the future .The trouble is a lot of companies don’t know how to do it and this why I am excited to be presenting at the Grow Stronger Together tour .Tara has brought together all the people who know the business and are currently doing it . They can give the vital information to show you how to use the tools to make sure the company will be strong into the future .
The threats to Real Estate companies and in my opinion these are very real threats is that we have new Property Management departments opening up with great marketing strategies ,many different products on offer , a huge variation in fee structures etc and I see the world of Property Management is 2017 vastly different to than in 2016.
In today’s world things change extremely quickly unlike years gone by .The challenge will be to keep up to and in front of the changes.
Therefore maybe the Principals and BDMs need to ask a few basic questions before thinking about going into a growth phase.
Questions that need to be asked:
- Do I have the right structure ?
- Do I have the right team in place ?
- Do I have the right software and technology in place?
- Can our website handle the traffic ?
- Are we currently productive as a department?
- Can we do things better than we are currently ?
- Has the office enough space to allow us to grow ?
- Are we networking between sales and PM departments ?
The bottom line is you won’t grow the numbers if you don’t have the correct foundation in place first. To many offices spend marketing money on an instant grab for new managements without the proper planning , for example who is your market, lets research that target market and plan on how to get to them.
I recently trained a company and after much research we found that they were dealing with more non English speaking clients or clients who have poor English , so we have updated the BDM listing kit to read in different languages. The result has been an increase in business in this segment of the market.
I believe we are heading for a huge change in Property Management in 2017 however don’t feel alarmed as I see this as exciting. Always remember KNOWLEDGE IS POWER !! and this is how you will be able to position your department to thrive by having the knowledge of what is coming.
My experience is that to grow it is almost impossible to do it alone.
Malcom Riley www.malcomrileyspeaker.com