Agencies that have rent rolls of up to 100 properties are losing money, the head of a real estate agent group has said.
“You’ve got to get that rent to up around 300-350 plus,” Stockdale & Leggo CEO Peter Thomas told Real Estate Business. “Anyone who’s running a rent roll of under 100 properties is running it at a loss, and they don’t realise that.”
Mr Thomas said while Stockdale & Leggo spent large amounts of time helping its franchisees become more profitable, property management was most important when it came to determining the agency’s overall value.
“The value of a real estate agency is [based] on the number of properties they have on the rent roll and the management fees they collect,” he said.
Mr Thomas said his group’s best offices, many of which had around 1,000 properties under management, were adding around 10 net properties per month.
He said many agents hit hurdles as they sought to grow their rent rolls. This generally occurred when they reached 100 and/or 250 properties under management.
Research was critical in understanding the local market, and he said Stockdale & Leggo would obtain investment property numbers in an area before assessing how many properties under management a particular agency should aim for.
If the number of investment properties in an area wasn’t high, other strategies would be employed, which may include merging rent rolls with other agents.
“I can’t think of any other [real estate] group that spends as much time on property management growth as what we do,” he said.