Property managers that are first to give landlords concessions usually win their business, a prominent industry trainer has said.
Despite encouraging property managers to be rigid with their fees, Bob Walters told attendees to the BWT 'Reengineering Rent Roll Growth' training conference in Sydney earlier this week that if you are planning on giving some sort of concession to a landlord, its best to act before your competition does.
It comes down to simple human nature, the BWT managing director said.
“It’s called reciprocity, which is the compulsion to give something in return after you’ve been given something," he told Real Estate Business.
“It’s what the people cleaning your windscreen at stoplights rely on, we don’t have to pay them yet we still do.”
Using reciprocity to your advantage can help sway a landlord to list their property with your office, so long as you are the first to offer them something.
”If someone’s giving you something, you will attempt to leave that situation equal. It’s human nature.”
“If someone else offers better service, or gives out important information first, they already feel inclined to give something back to that agent.
“The same comes with cutting fees. If you are going to do it, do it first.”
However Mr Walters stressed that the last thing property managers should do is discount their management fee, because the asset value of the rent roll is damaged.
Instead, property managers should offer services, such as additional inspections, that won’t damage the asset value or remove smaller fees that have been added on in the first place.
“If you add on a few smaller fees to all your clients, you can use them as leverage to get someone over the line,” said Mr Walters.
Fellow real estate trainer Darren Hunter suggests property managers should include lease renewal fees, monthly administration fees and/or routine inspection fees.
All of these can then be used as leverage without damaging the business.