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Do you have a Balanced Agency?

February 2017

In todays market we have real estate agents specialising in just sales, or property management or even strata management, however, as agency principals we need to understand that there are very important synergies and strengths within your business only available when you have multiple revenue streams or activities that can feed off each another.

For example, industry research has consistently showing that a well-run rent roll can provide around 10% in sales listings each year. These are listings where you should already have a professional relationship with the property owner.

If you have been providing a satisfactory service to them through your property management services then there is no reason why they will not listen to you when they consider selling. This is a client who already trusts you as their real estate agent, so selling you services should not be difficult, and most importantly you are not out their competing with other agents to discount your selling fee.

So take a moment to think about how many properties you have in your rent roll and what the sales commission on 10% of it would mean to you this year?

It's important to think about how many properties you have in your rent roll.  Image source: Unsplash

Now consider how many listings this would equate to if you doubled the size of your rent roll?

This is the secret value in having a substantial rent roll within your agency practice. We have all understood the benefits of a rent roll and its cash flow, but very few look at this ongoing sales income. Even less agents, actively nurture these sales and listings by actively getting involved in their landlords property investment planning.

The logic is simple, If you have 100 properties under management and you get 10 sales listing over the year you may be quietly happy with that, but if you had 600 properties under management and 60 sales listing a year I think you would be ecstatic.

Naturally this all requires you to be actively building and operating your rent roll, giving your landlord good quality service and making sure you become their real estate agent. However, the rewards are substantial, and have to be better than all the cold canvassing needed to find new business in competition with 4 or 5 other agents.

So plan to build a balanced agency with multiple income streams that can feed off each other to make your agency stronger and more recession proof for the future.

Does the cost of all this latest technology genuinely provide move efficiency and savings within your agency? After all what we purchase today can be obsolete in a few years time.

Some business owners are technology junkies while others are reluctant to incorporate technology, seeing it as an unnecessary evil, costing more money and placing more pressure on staff to change the way they are use to doing business and learning how to use and operate it.

So, is all this new technology worth investing in or is it better to stick to doing things the way we are use to and comfortable with?

Here are several key questions I believe we need to ask and answer before investing in new technology.

First we need to ask the question, is the product relevant to our organization and task that it is designed to apply to? 

Then, is the product going to provide us with efficiencies and cost savings that will offset the investment we are going to make?

Investing in the right products that enable staff to become more efficient and productive is a no brainer.  Remember, you have a one-time investment, which doesn’t incur overtime, holiday pay or super costs, so if it enables your staff to become more efficient and generate more company income per person each year then it becomes a wise investment.

One of the biggest negatives I see all the time is that business owners are willing to invest in technology but then become reluctant to spend time and money training their staff to use that technology in a way that extracts the maximum benefits from their investment.

Take your smart phone as an example, we can go out and buy the biggest and best, only to utilize around 40% of the features that are available on it!

We may have that phone for several years and never learn to appropriately use all the features to their maximum. This is a huge under use of the benefits as well as a lack of maximising a return on our investment.

We invariably see the same pattern with companies that are doing the right thing and investing in great technology, but then dropping the ball by not training their staff to use that technology to it’s maximum potential.  Many staff members are only using a fraction of the technologies potential that they use every day. This lack of understanding and training is costing huge amounts of money and productivity, because not only are you under-utilizing your initial investment, but the underuse of the resources that technology provides, negates the efficiencies and saving that come from making your staff so much more cost effective. 

So, it is important to look at what software and products your staff are using, and make sure that they are getting the maximum out of them by providing regular training.
Just as technology is changing and developing, so the training of your staff to use these products to their maximum benefit within your agency needs to be ongoing and regular, so you can be sure that your staff are operating efficiently and maintaining maximum productivity within your agency.


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