Your rent roll is only worth as much as the worst property you manage.
There is a saying in business - it is 20 percent of your clients who take up 80 percent of your time.
This also applies when you are managing a rent roll. No matter how many properties you have on your books, there are always a few which are wasting your time and money.
The problems can be with the property themselves - constant leaks, faulty plumbing or poor structural foundations can turn a home into a money pit for both owner and agent.
Then there are difficult landlords - they are hard to pin down and aren’t forthcoming with payments. You may find they are constantly complaining and getting in touch regarding issues other landlords aren’t concerned about.
It may feel easy to write off these properties as your ‘problem children’ but it is important to turn them around. This benefits you in the short term by reducing stress, improving income and reducing time spent calling around for last minute repairs.
There are long term advantages too - when it comes time to sell your rent roll you will need to be able to prove the bulk of the properties on your list won’t be a problem for the new manager to take over.
Turning around the 20%
Australia’s rental vacancy rates are low, but this doesn’t mean tenants don’t have high standards. The ones who are willing to pay top dollar expect a well maintained property with modern, properly functioning features.
In the days of online reviews, a tenant can also leave negative feedback about your agency should they find their property rental experience is not up to scratch. These can leave a stain on your digital reputation and make it difficult to secure new clients.
Improve the standards of your worst rental properties and you will increase your profits as well as your reputation.
The following are three steps you can take:
1. Identify which properties are more effort than they are worth because of building quality or problem owners. Consider letting them go or revising your policies so your less than agreeable landlords have no choice but to shape up or ship out.
2. Speak to your landlords about investing in structural improvements to put a stop to the endless need for emergency repairs and maintenance. Explain how this will increase the value of their property and will save them money in the long term.
3. Visit the property with the landlord and explain how a new bathroom, clean carpets, revamped kitchen cupboards or a new coat of paint can mean collecting more rent and having higher tenant retention. Remind them that small upgrades don’t have to cost the earth and offer to share your connections and contacts to get the job done faster.
4. Say goodbye to bad tenants! If they are more trouble than they are worth you do not have to accommodate them once their lease has expired.
Taking to time and working with your landlords to improve the bottom 20 percent of properties on your list will result in better returns for them, happier tenants and ultimately a more valuable rent roll for your agency.