Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

rpm logo latest

How to create a ‘worst-to-first’ property hit list

By Darren Hunter
08 June 2016 | 1 minute read

As a consultant, when I come across a property management team that is obviously stressed and can’t seem to get on top of issues and crises, what you will read below usually uncovers what I call the ‘ball-and-chain’ effect’ in the rent roll.

Firstly, if there are no strict criteria for taking on a new property and if the reason they say ‘yes’ to new business is because the property simply has a roof and front door and not much more – a lot of new business can be problematic.

Too much of this type of business and the department will struggle. The cause, however, isn’t always easily identifiable.

Advertisement
Advertisement

Print off your property report

Let’s get started. First, print off your property list, sit down with the team and place these letters next to the relevant properties:

S – Low socio

Identify areas of low socio-economic status. These are often associated with more social problems, cheap housing and drug problems. If a good tenant is not likely to want to live in the areas, then give the property an ‘S’. In a city it could be certain suburbs; in regional towns it could be certain streets.

R – Low rent

How low do you go before you start attracting only low-grade tenants? The lower the rent, the lower your fee income and, more often than not, the more difficult the workload due to the type of tenants attracted by these rents.

T – Property type

Certain types of property can deliver predictable results. An apartment, for example, may attract a single person or working couple, and you might be happy with this result; it’s predictable. But other property types might only bring you trouble, like multi-storey units and flats or former government housing that is now a private investment. So give a ‘T’ to a property type that is not desirable or that is very predictable in giving you less-than-desirable results.

D – Distance

If a property is more than a 30-minute drive from your office and you’re not charging higher fees to compensate, then taking on too many of these properties will burden the property manager. The end result is them driving around in a car part-time while trying to manage a full-time workload. This causes stress and issues – usually ones that the property manager or manager cannot identify.

You might be wondering, ‘What about multiple-property owners that have some close properties but one long distance?’ Quite simply, you’re running a commercial operation and you should be charging accordingly. The extra driving hours add up.

F – Furnished

Unless you’re dealing with high-rise apartments or holiday rentals or anything that actually requires furniture, then stay away from it! Typical residential tenants want unfurnished properties. If an owner needs to move away and it’s easier to rent it out furnished, that does not mean that you need to say yes! It’s just one big headache with no real upside.

Q – Quality

Basically, if the property is run down and the owner won’t fix it, it means their mindset is also run down when it comes to their obligations. It’s not good for business, considering all the complications, issues and risks attached.

C – ‘C-Class’ Owners

Place a ‘C’ next to properties where the owner has most or all of these qualities: they’re unreasonable and over-demanding, take up too much of your time with requests and communication, won’t fix the property, want above-market rent and generally have a bad property that attracts bad tenants.

Look for the ‘alphabet’

Starting to see a pattern emerging? You should be by now! If certain properties start to have the ‘alphabet’ next to them, with several letters appearing, then this is a sign that they are not good for business. The more letters, the worse they are!

'Worst-to-first' strategy

Make a list of 10 properties, putting the worst first. Now for every three properties that you gain in net growth, remove the worst on your list. You will improve the quality and profitability of the rent roll for every property you remove.

Keep on doing it and you will have a business that everyone will enjoy working in.

How to create a ‘worst-to-first’ property hit list
DarrenHunter
lawyersweekly logo

ABOUT THE AUTHOR


darren-hunter

darren-hunter

Trainer – LPMA

Darren Hunter is a national and international property management trainer, speaker, consultant and authority on property management fees, and income maximisation strategies all designed to grow your rent roll profit, without extra rent roll growth required.


A consultant and trainer now for over seven years, Darren has previously worked as the state property manager with one of Australia’s most respected real estate brands recruiting, training, implementing policies and procedures and managing 28 property managers in 18 regional offices over South Australia and the Northern Territory. Darren has presented for the Real Estate Institutes in WA, SA, NT and TAS and has presented at the Leading Property Managers of Australia Forums(LPMA) in 2007, 2008, 2009, 2010, 2011 and 2012

Listen to other installment of the Real Estate Business Podcast
Rankings
rankings
JUST RELEASED
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

rankings
JUST RELEASED
May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

rankings
JUST RELEASED
May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

rankings
JUST RELEASED
April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

rankings
JUST RELEASED
April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings
Do you have an industry update?

top suburbs

12 month growth
Mirador
103.33%
Bawley Point
98.13%
Walla Walla
90.7%
Byron Bay
86.67%
Kiama Heights
85.93%
Greta
84.14%
Nulkaba
81%
South Hobart
78.78%
Diddillibah
76.25%
Lennox Head
73.98%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.