While you might find that the biggest paydays come from selling homes, these can be few and far between. However, your bills don’t stop just because you’re going through a quiet period and that’s often the reason that real estate agents have to give up their dreams.
Adding property management into your mix can be the step you need to take to secure your cash flow – and your future.
Some real estate agents turn up their noses at the idea of property management ‒ they see it as a small income that takes up time they could be spending on marketing a property for sale.
A rent roll can secure your cash flow ‒ and your future.
Property management covers your bills
If you look at the real estate cash flow model of a standard agency, there are constant expenses but unpredictable incomes. Property management changes this. With regular payments from clients, you always know that your bills are covered.
Not only does this make financial sense, but it also takes a lot of stress and anxiety out of your life.
Property management is an asset
If you look to the future, what do you see? If you imagine one day selling your business, would your current cash flow analysis look appealing to potential buyers?
Simply put, if you don't have a rent roll to sell, there's very little value to be had from your business. We've seen clients who focus on property management ‒ buying other agencies and shutting them down purely to take control of their rent rolls. In that field of work, it's the roll and not the name (or any other factor) that has the value.
If you want to grow your wealth, you might want to grow a rent roll.
Property management creates leads
Another benefit of offering property management is that it can create leads. If an investor buys through you and can have that property managed through you, you've become a one-stop shop. If you do a good job and they buy another property, that's more potential work. If they ever decide to sell, you're likely to be their first phone call.
How to get started in property management
There are two ways you might get started with property management: from the ground up or by jumping in the deep end and buying a rent roll from elsewhere. Both have their pros and cons.
Buying a rent roll ‒ if you study the finances closely ‒ has the huge benefit of bringing in regular income immediately, while it might take a bit of time to build up your own portfolio to a satisfactory income. However, by building it yourself you can shape your strategy more soundly. If you want to focus on a particular area, for instance, you can offer your services just in one suburb rather than accepting a rent roll that might have properties outside your ideal driving range.
Starting slowly means you get to take your time getting to know the property owners so that you can give each one the personal attention they deserve. If you buy a large list, you simply don't have the time to do this, which might mean that messages shared between them and their previous agents get lost in the handover.
Growing organically also means you can adapt to change more easily. You can bring in new staff to cope with growth and there will be no huge-scale operational changes. Depending on the size of the rent roll, you might have to hire multiple members of staff, hoping that they're a good fit for your office.
Get help with property management
Regardless of how you get started, once you make property management a part of your business you'll quickly see the benefits: a regular income, reduced stress, long-term confidence and increased value if you ever want to sell.
If you’re thinking of setting up a business with a rent roll or adding a rent roll to an existing business, please feel free to give us a call to discuss the pros and cons in more depth. We're happy to assist you, whether or not you have an interest in joining One Agency. Call us on 1300 792 388 or use the form on this page to get in touch with our team.