Is your Rent Roll healthy? 5 questions
These questions are designed for business owners and heads of department to assess how healthy and sustainable their Property Management departments are.
They are intended as a general self-assessment guide only. For a better idea of how you can transform your business into one that is truly sustainable, contact our team here.
Considering that a rent roll contributes approximately 96% of the value of a typical real estate business, looking after its health is paramount.
How would losing your top performing 2 staff members impact on your revenue/profit margin?
This is a hard one, as there are important people in every business. There will be to some extent a reliance on certain staff more than others in every small to medium business.
This is especially true within your leadership team who provide future strategic direction.
But outside of the leadership team, what would happen if you lost your top performing team members? Would there be a hit to your revenue or profit margin?
If the answer is yes, then you need to do two seemingly contradictory things: doing everything to stop them leaving, and try to prepare your business for when they do.
Do you experience unpredictable profit?
I can almost hear what you’re thinking, isn’t all profit inherently unpredictable? It’s not like it’s set in stone is it?
Well no, there are external factors that impact the bottom line, such as certain unavoidable expenses. And demand can fluctuate, sure.
But if you’re experiencing wildly fluctuating and unpredictable profits across comparable periods, you should probably start to look internally.
Unpredictable profits are a sign of inconsistency somewhere in your business. They show that you have the capacity to make profit, but lack the systems to do so consistently and predictably.
The word predictable often gets a bad wrap, but there’s nothing boring about profit!
How easily can your staff cover for each other on holidays/sick days?
Holidays are essential, and sick days are inevitable. Both can cause headaches for businesses.
The two main issues are having the right person to actually step in and cover, and how well they are able to complete the job.
If you have a team of Property Managers, do they all follow the same process or does everyone have their own way of doing things.
You want your Property Managers to have a sense of ownership over their portfolios, but don’t forget that they don’t have ACTUAL ownership over it.
There will be times when they are away, or sick, and you will need someone to cover for them.
This is a pain point for so many businesses across the country, and definitely a roadblock to being truly sustainable.
Is your reputation hurting or helping future revenue growth?
This is a big one. But a business’ reputation and service quality can either push the accelerator or pull the handbrake.
For real estate businesses that have both a Sales and a Property Management Department, understanding how one can affect the other is important.
A rent roll can often provide Sales agents with great leads and potential clients, but only if they are happy with your service.
They might also even refer you themselves, which is the most valuable marketing there is.
A good reputation is more important than ever. Neglect yours at your own peril.
Do you have a reliable recruitment pipeline?
Recruitment and retention is a pain point for 90% of real estate businesses with Property Management Departments right now.
The supply of new Property Managers joining the industry is simply unable to cope with the demand caused by a massive burnout rate.
The job is also getting harder, with ever increasing legislative requirements meaning the barrier to entry is higher than ever before.
Experienced Property Managers are able to command higher wages, but management fees are falling. Something’s got to give.
To be truly sustainable, a business should have a reliable recruitment pipeline, and not be at the mercy of recruitment companies or forced to pay above and beyond to attract staff.