The fear of losing clients is holding property managers back from increasing fees to develop a profitable rent roll, according to the manager at Rental Express Property Management.
Speaking on the Domain Insights to Success series, Chris Rolls said that property managers need to box clever in choosing the clients they approach about a fee hike, outlining two main methods of doing so without chasing them away.
He suggested that to increase fees from existing clients involves identifying the clients who have been with you for a long period of time and are happy with the service provided.
“You can’t increase the fees for existing clients who have only been with you for a short period of time. Let's say I signed your property up to be managed by Rental Express six months ago at a certain level of fees, it’s not good for me to come back six months down the track and increase those fees,” said Mr Rolls.
“But if I signed that up three years ago, it’s much more justifiable from our perspective to say to the client, 'Look our costs have gone up here, here and here, and as a result, we have to increase your fees'.”
Mr Rolls also advised that using market research methods such as a Net Promoter Score to survey client satisfaction will reduce the risk of losing business, while property managers can also increase fees through attrition, which involves signing up new properties on higher fees.
“If you take an average rent roll, let's call it 500 properties, every year you’ll lose between 10 to 12 per cent," he said. "If you’re replacing those 50 properties every year through the business development manager's activities, the key is to know what fees and what rent the old properties are on your rent rolll, so you can increase them on the new ones that you’re signing up."
He concluded that putting a value on the service level you’re providing by sending surveys to current owners in an attempt to find out if they would recommend you to other people has proven fruitful for Rental Express Property Management.