The real estate market is changing so much right now. Between interest rate rises, cost of living, and the massive changes happening in renting laws across the states, you might have noticed that more of your landlords are considering selling their investment properties.
I’ve been there myself. When I first started my rent roll, the sales market wasn’t very strong and rental returns were good, so it was fairly easy to get landlords into investment properties. But the market changes, as you know. Eventually, I noticed more and more of my landlords selling their properties. I watched as my rent roll started to shrink, and it stressed me out.
In this article, I want to share with you 5 simple things you can do to allow your business to replace those properties and continue to grow (in revenue and in management numbers) even during this challenging time in the market.
1. Actively Offer Sales Market Appraisals to Your Rent Roll
This one might feel terrifying. Offering sales market appraisals might feel as though you’re encouraging landlords to sell. Don’t worry, it won’t. If they’re already thinking about it, they’re already thinking about it. And you offering them a market appraisal isn’t going to change their thinking.
The advantage here is that you’re likely to secure the sales listing, rather than risk losing it to a competitor. Securing the sales listing has three key advantages:
- You get the sales commission. Remember, the dollar value of a sales commission is often 2-3 times the dollar value of that property sold as part of a rent roll asset sale. This sales commission buys you time to replace that property. Depending on what you charge for a sale, it might buy you 5-10 years (in management fees) to replace that property in your rent roll.
- If the property sells to an investor, you’re much more likely to keep that management. If your team is the first point of contact for that purchaser (and you have an effective communication strategy between your sales and property management teams) you’re much more likely to keep that property in your rent roll.
- Your sales team meets more property investors. If a property is for sale, a portion of the buyer enquiry may be property investors. Provided you have an effective communication strategy between your sales and property management teams) you’re exposed to more property investor leads in this sales campaign, which can allow you more rent roll growth opportunities.
2. Proactively Seek Buyer Contact Details
If a property from your rent roll is sold through another agency (I get it, it happens), it’s crucial to proactively seek contact details for the buyer, so you can optimise your chances of securing the management if they’re a property investor.
It’s clear that the listing agent won’t want to give you these details, because they’ll want to secure the management themselves. However, if you reach out to the solicitors or conveyancers handling the contracts, they may pass on your contact details to the buyer (because they can’t give you contact details without permission, of course). A simple way to encourage solicitors to pass on your contact details is to reach out and explain that you’d love to chat with the buyer to seek their instructions for the tenancy post settlement.
Although you can’t act for the buyer (as a managing agent) prior to settlement, you can have conversations with them about their plans, and work with them to prepare paperwork (like a management agreement) in the lead up to settlement.
3. Stay in Touch with Past Landlords
Even after a landlord sells their investment property, it doesn’t mean that relationship is over. Continue nurturing this relationship, like you would a prospective landlord. Add them to your email marketing database and work on your content marketing strategies to stay top-of-mind with past landlords. By providing valuable information and updates about the property market, you stay in that position as a trusted resource. Maintaining regular contact through anniversary and birthday messages, as well as the occasional phone call, ensures that you are present when the market changes or when those landlords are considering re-entering the market.
Don’t forget the potential for referrals from past landlords who may have friends or family who are still property investors. If those landlords referred to you while you managed their property, they’ll probably still refer to you after it’s sold.
4. Offer Complimentary Services to Existing Landlords
This time in the market is the perfect opportunity to strengthen your relationship with existing landlords by offering complimentary services that go beyond property management. When was the last time you introduced a mortgage broker to your landlords? In the current market, offering mortgage broking assistance can be particularly helpful. It might be the difference between a landlord having to sell their property and being able to keep it, which has a big impact on your rent roll.
By providing this additional support, you position yourself as a comprehensive solution provider, reinforcing loyalty and trust.
Additionally, consider partnering with other service providers such as insurance brokers, your tradespeople, quantity surveyors and accountants to offer a comprehensive suite of services to your clients. Offering these services might allow your landlords to save a little more money and keep their investment property longer.
5. Leverage Your Referral Network for Cross-Promotion
Collaborating with your referral network can significantly expand your audience and generate new leads into your rent roll. This is the perfect time to seek opportunities for cross-promotion with complementary businesses such as financial advisors, accountants, mortgage brokers, solicitors, buyers’ advocates, quantity surveyors and other property-related service providers. Establish mutually beneficial partnerships that allow you to tap into each other’s networks and share resources. By sharing each other’s content, guest posting on each other’s blogs, and offering joint promotions, you can reach potential landlords who may not even know about you, but own investment properties and are experiencing the challenges of the current market. Collaborate on webinars, competitions, or even local events where you can share your expertise and generate leads.
Remember that this exposure not only helps you attract new clients but also strengthens your reputation with and expands your professional network.
6. Review Rents
Maximising your income is an important part of continuing to grow your business. This means, you need to ensure that all the properties in your portfolios are in line with current market conditions. Audit your rents and ensure you have clear, reliable systems for appropriately increasing rent to market rates, while remaining within any legislative guidelines for rent increase frequency.
At a time like this, when landlords are selling their properties, it can feel like a big setback. But with every “downturn” there are always people seeing the opportunity. Be one of those people.
If there’s one thing I know for sure, it’s this: the market always changes. This is just a season. We will come out the other side. And on the other side of this, you’ll have five systems set up in your business that will continue to grow your rent roll, in that new booming market.
I recently ran a webinar with Sarah Cincotta diving deeply into What to do if All your Landlords are Selling. If you want a copy of this webinar replay (and access to the 15 email sequence I created for you) click here to grab a copy of the replay.
And if you need some more ideas on how to grow your rent roll, check out my free guide on How to Grow Your Rent Roll in 5 Hours a Week.
A version of this article first appeared on Elite Agent.