Over 95% of rent rolls can be achieved better and improved fees on what they are currently experiencing.
Most have the ability to boost their cash flow, profit margin, strengthen their business and improve it even further financially.
However, less than 5% of rent rolls actually do it.
Working with rent rolls across Australia, New Zealand, and now the USA, here are ten factors that stop rent rolls realising their full income potential with the business they currently have:
1. The boss doesn’t believe it!
If the ‘captain of the ship’ does not believe it is possible then there’s no way the crew will come on board with it either. This is a big stopper!
2. The team is not on board!
We’ve seen situations where a rent roll could be earning $50,000 to $100,000 per year more than they are and the fees could easily be improved, however, staff members refuse to believe it’s possible.
At one time a boss told me that the staff member even suggested they’d resign if the fees were improved or increased!
3. Cheaper agents
Another stopper is the perception that there are too many cheap agents in the marketplace, and their clients will get up and leave if their fees are increased. My answer to that is a question: Why haven’t they left already if there are cheaper rates to be had?
The reasons they have stayed are the same reasons they will still continue to stay regardless of having to pay more. It’s all about their current peace of mind with your service that keeps them with your agency.
4. Poor service
Most of the factors outlined in this article are mindset-based. However, if your owners are currently receiving a poor level of service and then you ask them to pay more, this could definitely result in losing your clients.
Only if you’re offering a reasonable level of service or better, should you increase and improve your fees.
5. Too much Property Manager turnover
Just like poor service, owners can also become unsettled if they experience too many property managers over a period of time. Lack of peace of mind is the issue, and if you then increase their fees, this is what motivates your clients to weigh up their options and leave the business.
6. ‘But my owners have been with me for years
Sometimes I have people tell me their clients have been with them for so long, they wouldn’t want to unsettle them by increasing or improving fees.
What they need to realise is that the longer they are with you and have peace of mind with your service, the more stable they are and don’t want to leave even if they’re asked to pay more for the service that they are already happy with.
7. Doing too little
Sometimes property management businesses do increase fees. They tweak one here, slightly increase another there, not wanting to ‘rock the boat’.
A fee maximisation campaign can really only be done across the board, no more than every couple of years. Sure, you got a little success, but you could’ve done a whole lot more and made it really worth it.
8. Lose motivation
If you’re keen on this process, then placing it on the shelf to ‘do it later’ will more than likely ensure that it will never happen. It’s interesting how motivation changes over time and distractions also will cool you to doing it.
Time is a great way to reverse your motivation when it comes to improving fees.
9. Business issues
A business crisis occurs every 2-3 months, it’s just normal. If you’re motivated, make it happen now! Don’t wait.
And once it’s done it’s done. The results don’t reverse!
10. New staff with smaller mindsets
This factor has come to light after a team has improved their mindset, then improved the fees but 2 years later some team members have changed over, and now you’ve got new team members that think your current fees are too high, and their mindset might start working the fees to what they think they’re worth.
Always be training new team members on your fees, and how to obtain them particularly if they’re higher than other agents in the area. It’s the only mindset that stops them.
You can get better and improved fees. You can be improving your mindset, and then enjoy a better cash flow, profit margin, and better financial security for your business.
Don’t let any of these ten factors get in your way! your way!