Organic Rent Roll Growth within your Four Walls
One of the most common questions we get asked at Real Estate Dynamics is, ‘How can I grow my Rent Roll?’ At first glance, this might seem like a straightforward question, but there are a number of options to achieve growth. Let’s take a look at some:
Acquisition – buying a Rent Roll business and adding it to yours
Fee growth – strategically adding and/or increasing fees on properties that fall below a certain income level. It is interesting to note that if you link this calculation to your break-even point, you’ll soon be able to identify the properties that are costing you money to manage.
Capacity and Efficiency – adopting models and utilising technology to help your team manage more properties, more effectively; and
Organic Growth – where you have people designated with the responsibility for adding more properties to your Rent Roll each month to ensure a net gain in the numbers you manage. This is the area I’d like to focus on.
Organic growth has two major components:
- The business that is available within your four walls; and
- The business available outside your four walls
Ironically many Rent Roll businesses go straight for the business outside their four walls and focus on this area for what they consider is the easiest form of growth. These businesses often say things like, ‘The BDM should be creating their own leads’, and expect that this is done through the following areas for example:
- Builders and Developers
- Vacant Properties
- Marketing to Landlords that are not current clients; and
- Private Landlords
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Whilst these areas might be important to add to your growth mix eventually, you can spend tens of thousands of hard-earned revenue dollars marketing to these sources with limited impact.
Conversely, what opportunities are already available to you within your four walls? These sources already have a relationship with you and are more likely to have a positive impression of your services. These opportunities include:
- Current Landlords – every Rent Roll business we have worked with has identified that some of their current Landlords own other properties that they would be willing to manage but don’t. (In some cases, they own multiple properties). When is the last time you checked and simply asked for more business?
- Current Tenants – it is not unusual for Tenants to either own their own investment properties or know other people who do. When was the last time you asked your Tenants the question: ‘Who do you know who owns an investment property in our area? Or “Do you own any investment properties yourself?”
- Salespeople – if you have a Sales business – how ‘integrated’ is this department with your Rent Roll? Sales departments who capture investor enquiry and ensure that they communicate with Investors are more likely to contribute to growing the Rent Roll numbers quickly. They don’t wait until a contract is signed before they introduce the Property Management team.
- Your Team – ask your whole team to identify at least 5 properties each that you don’t currently manage and would like to – ask this question regularly. You will be surprised at the result.
- Tradespeople and Contractors – do you make a habit to ask them for referrals for other properties? Who do they know who owns property that you don’t manage? It is likely that they will know plenty and can be an excellent source of referral.
I bank with four financial institutions. This has been the case for more than five years. Not one of them has ever called me to ask if I have other accounts they could manage because they are looking for more business. I would love just one of them to call me to consolidate my banking needs. It’s one of those things I want and know I should do, but never make the time.
Many people portray a sense of how busy they are and the sources within your four walls (even with the best of intentions) may think you’re too busy to take on additional work and not want to bother you. Actively asking them for referrals will dispel this assumption.
Whilst these are some examples of internal organic growth, I’d encourage you to think about what is available inside your four walls. Are you capitalising on these sources? One Rent Roll we work with had 380 Properties and they identified an additional 73 properties just from their current Landlords. Their story is not uncommon.
I hope you enjoy investigating what is available inside your four walls. And remember to always ask the question, ‘we are always looking for additional great properties to manage – who do you know who owns one?’ It’s a habit that could increase the value of your Rent Roll business quickly without a great deal of additional effort or expense.