When I first started my rent roll, we had a booming rental market and a very slow sales market…
But a few years later, the tables had turned…
Rents hadn’t grown much, but houses were selling like hot cakes!
And you know what that means for a rent roll owner?
Landlords selling their properties, and a shrinking rent roll.
With each property that sold off the rent roll, I saw the dollars just disappearing.
Not only the dollars each week, but the dollars of my asset value.
And let me tell you, that’s pretty disheartening.
It takes soooooooo much work to list a property into your rent roll, then when it’s listed for sale and sells to someone who is not an investor, it’s gone…
Just like that, gone.
So it’s at times like this, you need to find ways to keep growing your business, even if you’ve got properties being sold off your rent roll.
And the truth is, there are 2 things you need to focus on when this is happening:
- Referral Opportunities
Even if you’ve got landlords selling their investment properties, that doesn’t mean that they automatically stop referring other clients to you.
So, even after a landlord sells their investment property, please stay in touch with them. They still know people!
If you lose touch with those landlord clients, you also lose touch with a contact who might refer other landlord clients to you.
Put these landlords into your CRM with a follow up process similar to the process you follow up your industry referral partners. Work with them as people who might be able to send leads into your rent roll.
After all, if they were happy with the service you gave them during their time as an investor, why wouldn’t they refer their friends and family to you?
Now, if you want to learn how to get more referrals, be sure to download my Referral Marketing Blueprint here
It really doesn’t matter how big your rent roll is, how many properties you have under management, how big your team of property managers is, or how fancy your signboards are, if you’re not making money.
Let me give you an example of how this looks, in real life. And how adjusting a very small part of your business can make a very big difference.
Rent Roll A has 100 properties under management and charges 8.8% management commission on an average $400 per week property. This means they make about $183,000 a year in total commissions (plus letting fees, admin fees and any other fees, if they’re charging them)
Rent Roll B also has 100 properties under management but charges just 7.7% management commission on an average $400 per week property. This means they make about $160,000 a year in total commissions (plus letting fees, admin fees and any other fees, if they’re charging them)
That’s $23,000 a year difference.
That means that Rent Roll A could actually manage almost 13 fewer properties than Rent Roll B and still make the same money!
This might mean it’s time to put up your fees. Maybe just for all new clients, or maybe for all existing clients too. This can be a powerful way to allow your business to thrive, even when your landlords are exiting the market.
The other side of the “income” conversation is sales income. If your office also sells properties for your landlord clients, then every time one of those properties sells, your office is likely bringing in $10,000 – $20,000 in sales commission. That’s 5-10 times the annual management commission you’d made on one of those $400 per week (at 8.8% management commission) each year.
To put it simply, if you (or your office) sells one of those properties off your rent roll, you create enough income that you can wait 5-10 years to replace it from your rent roll – just from the sales commission alone.
And I don’t think you’ll take 5-10 years to replace that property, am I right?
Here’s the thing.
Landlords will sell their properties. And it’s a bummer when they do. I know how disappointed I felt when I had landlords decide to sell.
But if you focus on these two things, you can keep growing your rent roll and the income for your business, despite landlords selling their investment properties.
Now, if you need other ideas on how to grow your rent roll, download my guide on 3 Ways To Grow Your Rent Roll right here.
If you haven’t seen my last blog titled How to get Landlord Leads from Networking Events be sure to check that out next!