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Chris Rolls, Thinking outside the box


Chris Rolls, Thinking outside the box

By Chris Rolls, Managing Director, Rental Express and Co-Host of Hot Topics Property Management

Fact:

The property management market and the industry itself are changing. Rapidly increasing housing prices and rents are a thing of the past. These days, increasing costs to manage a property are reducing margins, and the increasing legislative requirements imposed by governments are an added burden to our workload. All this means we need to change the way we run our property management businesses.

It costs more to manage a property now than at any time in the past 5 years, and all the businesses that previously relied on sales income to keep the doors open are now looking at property management as their saviour. This means not only is there less profit but the increased competition makes growth harder to achieve as well. This might sound like doom and gloom, but, if you’re able to adapt and innovate, you’ll still do well, while others struggle to keep their heads above water.

Continuing to grow revenue and market share is dependent on one thing – a new business strategy that considers both quantity and quality. Even in challenging times, not all business is good business (something not all commission structures account for). In fact, Rental Express has strict guidelines as to what we do and don’t sign-up; a stark contrast to most property management businesses that pay BDM’s purely on the basis of numbers.

When developing our new business strategy at Rental Express, we made four rules which challenged long held beliefs:

1. Don’t employ an ex-property manager to be your next Business Development Manager (BDM)

Business development is fundamentally a sales role. And from experience, it’s much easier to teach a person with sales skills about property management rather than vice versa. The fact is, not everyone is cut out for sales.

2.Generate leads for your BDM’s

In terms of marketing, property management is worlds away from real estate sales. Unlike sales, an investment property owner always needs a property manager at any given time. A general home owner only needs a sales person on average every 6-10 years. Hence, it is easier to generate leads from property management than sales, simply because property investors permanently employ a property manager. Allow BDM’s to concentrate on what they do best – signing up property, rather than knocking on doors.

3.Don’t ‘promote’ a successful BDM into sales

A great BDM is your secret weapon for achieving rent-rollw growth, so don’t treat business development as a career-step towards sales. Instead, when you find a strong BDM, ensure that your reward structure is lucrative enough for them to feel like it’s the destination and not just a stopover.

4. Structure your commission to reward your desired outcome

Staff will give you whatever your reward system dictates. So if your structure is based around numbers, don’t be surprised when you find your rent roll is 80% comprised of $250 properties. Instead reward your BDM’s with a low base salary coupled with a fixed percentage of the income each new management generates. That way your BDM’s have a vested interest in signing up properties that generate high income as opposed to large numbers of poor quality properties. Increased costs and competition as well as a slow sales market are here to stay for at least the foreseeable future. Business development managers are our frontline in the fight to continue growth and remaining profitable, and if you don’t find, support and reward the right people, someone else will. So before you point the finger at the slowed market, maybe take a minute to consider if your new business strategy is enough to keep you afloat.

Chris Rolls is the Managing Director of Rental Express Property Management. Rental Express is Queensland’s largest privatelyowned residential property management organisation with over 3,500 properties under management.  


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Chris Rolls, Thinking outside the box