I’d done the numbers. Opening our new doors by buying a rent roll would mean I’d pay some retiring agent more than 3 years’ management fees up front, while my brilliant and innovative marketing plan totaled far less. I’d just come out of a senior project marketing role with a public company and had heaps of fresh ideas. I was going to take the “smarter” approach…
I paid an edgy ad firm to build me a new brand and we mapped out a target audience and clear geographic focus. There were huge ‘out of the box’ digital campaigns. Public relations campaigns using the latest research. I threw all the best and brightest ideas at building my fledgling agency and I was not afraid to spend big. After all, buying just one management in a rent roll would have cost more than $5000!
I rented high net worth databases (I had zero clients and minimal contacts of my own) and I offered rent guarantees as a service point of difference. I did big investor events with headline speakers. And, after 12 months of scrambling to embrace every possible promotional idea to finding and securing landlord clients, I had less than 60 properties under management.
And my bank balance was down over $600,000…
You see I had overheads from day one. Admin and property managers: I wanted the best staff so I paid the best wages. I had office rent and licenses and realestate.com and insurances and IT and equipment and marketing. So – much – marketing! But revenue? Not so much!
And then I gave myself a smack around, and bought a rent roll.
Yes the price was almost 3 years’ management fees for each property. And now I had to add bank interest to my expensive expenses. But overnight I had income.
I had those management fees but I also had letting and reletting fees and admin and advertising (none of them are included in the pure price calculation for a rent roll). From settlement day onwards I had full revenue for each and every property.
But it got better.
Suddenly we had a market presence. Our property ads online. Our for rent signs and open home boards in the streets of our neighbourhood. The office window was full of properties. And we had clients. A database full of connections and opportunities to grow our network. To mine this landlord base for leads.
Before long we had sales listings from the rent roll and those clients. More signs, more ads and, in time, more staff driving around with our logos on their cars. We were gaining market momentum at a wonderful pace. Our agency’s exposure grew exponentially so listings came easier for both management and sales. And we attracted more staff with this greater presence.
There are clever agents who start their businesses with no client base, no rent roll. And I admire them.
Me? I learned a very expensive lesson! Buying a rent roll gave me a really broad market exposure, connections and business momentum that I simply could not build in reasonable time without it.
If you’d like to chat confidentially about buying a rent roll please call me on 0423 332 022.