If I was a Landlord interviewing potential rental agents to procure a new tenant ,and to manage the lease, for my rental property, I’d be asking for the following 3 figures for their rental portfolio (or their company’s rental portfolio) . . . .
- Occupancy Rate
- Level of Rent Arrears
Well, it’s simple . . .
A landlord is looking to maximise the income from their investment property. The agent that they appoint should be helping them in doing just that.
I believe that the above 3 metrics give a landlord a good idea of how well the agent (or company) is managing their rental book.
In particular, comparing these figures for multiple agents or agencies pitching to me, would give me some sort of independent or objective measure for comparison.
The other activities that the agent is responsible for carrying out on a daily basis ,as agreed in the mandate (e.g. lease renewals, inspections, etc), I would accept as a ‘given’. After all, if the agent fails to adhere to their obligations under the mandate I could take steps to cancel the mandate.
So, what do the above 3 metrics indicate?
Most landlords approach rental agents when their rental property is vacant, or about to be vacated.
A landlord with a vacant property wants to know how long (on average) they can expect the property to be vacant after they have mandated the agent to tenant it.
This metric also gives the landlord a good idea of . . .
- the agent’s knowledge of the current rental market
- the accuracy of their market rental assessment
- the level of market feedback and advice I can expect from the agent while the property is on the market for rent
- the quality of their advertising
- the reach of their advertising
- the targeting of their advertising
The logic here is . . .
If the agent knows the market well, they will give an accurate appraisal of the rental value of the property in the current market and the property will be tenanted quickly.
Furthermore, if they give valuable and fact-based market feedback and advice the landlord will listen and adapt the rental price on this advice and shorten the time-to-tenant.
Further to the time -to-rent, this metric gives more information about how well the agent or agency manages their portfolio and particularly their re-tenanting activities.
In addition to the factors covered by time-to-rent Occupancy Rate also gives an idea of . . .
- how quickly the agency processes tenant notices of termination, and
- how quickly the agent gets the property advertised for rent
Level of Rent Arrears
Getting paid – in full and on-time – is very important to landlords.
The Level of Rent Arrears across an agent’s portfolio is a good indication of how successful they are at getting tenants to pay in full and on time,.
This metric also provides some indication of the . . .
- whether they have a rent arrears policy and procedure
- how persistent are they in implementing this policy and procedure
- how important is it for them to pursue any arrears
- how well they implement their arrears management policy procedure
The question is . . . would you be able to provide the above metrics (or comparative metrics) on request?
If not, why not?
Stand Out from the Crowd
Rental Agents consistently pitching for new business.
It’s a fact that your current portfolio WILL shrink through ‘natural attrition’ and no fault of your own – new business is the only way to survive!
Do you include these metrics in your listing presentation? If not, why not?
I realise that the average landlord might not ask these questions, but isn’t this the kind of information you would want as a landlord?
But, don’t just believe me – I asked a very successful and well-known figure in residential rentals and here is what Grant Rea (GO to Grant), Certified Residential Sales and Letting Specialist, had to say . . .
If you provide these facts (and explain their importance) you’re helping ‘educate’ the prospective landlord. If done successfully, the landlord is likely to ask your competitors for the same figures, and if they can’t produce them they’re not going to look as good as professional as you!