In todays market we have real estate agents specialising in just sales, or property management or even strata management, however, as agency principals we need to understand that there are very important synergies and strengths within your business only available when you have multiple revenue streams or activities that can feed off each another.
For example, industry research has consistently showing that a well-run rent roll can provide around 10% in sales listings each year. These are listings where you should already have a professional relationship with the property owner.
If you have been providing a satisfactory service to them through your property management services then there is no reason why they will not listen to you when they consider selling. This is a client who already trusts you as their real estate agent, so selling you services should not be difficult, and most importantly you are not out their competing with other agents to discount your selling fee.
So take a moment to think about how many properties you have in your rent roll and what the sales commission on 10% of it would mean to you this year?
It's important to think about how many properties you have in your rent roll.
Now consider how many listings this would equate to if you doubled the size of your rent roll?
This is the secret value in having a substantial rent roll within your agency practice. We have all understood the benefits of a rent roll and its cash flow, but very few look at this ongoing sales income. Even less agents, actively nurture these sales and listings by actively getting involved in their landlords property investment planning.
The logic is simple, If you have 100 properties under management and you get 10 sales listing over the year you may be quietly happy with that, but if you had 600 properties under management and 60 sales listing a year I think you would be ecstatic.
Naturally this all requires you to be actively building and operating your rent roll, giving your landlord good quality service and making sure you become their real estate agent. However, the rewards are substantial, and have to be better than all the cold canvassing needed to find new business in competition with 4 or 5 other agents.
So plan to build a balanced agency with multiple income streams that can feed off each other to make your agency stronger and more recession proof for the future.