Advising your clients on how to maximise their rent is a key component to any great property manager’s role. Sometimes this means they need to spend some money, and it can be a difficult conversation. Here are some tips on how to do that in a way where everyone’s a winner.
Start as you mean to go on
As part of our investor induction we highlight the fact that maintaining the property to its maximum potential is going to require a cash injection from time to time. We provide initial suggestions when we take over a management and, if clients don’t want to move forward with these suggestions, then we specify and agree on a time frame in which the updates can take place. Investors are very receptive if they know you are proactively assessing their property and providing expert advice on updates that can be made to maximise their income.
People don’t always want the cheapest outcome, but most people will want value for money. When you position a mini renovation or some updates for a property, speak to the investor in terms of the value these updates will create. It’s not about how much they outlay but what they get back in potential yield and capital growth. You should be able to provide your investor with a summary of what to do, how much it will cost (including vacancy cost) and expected time frame for completion. Then explain what rent they can expect afterward and a new valuation on the property. If the investor can see that they have paid back the renovation in a few years with the increase in rent, plus they have made another $20,000 in capital growth, it should be a much easier yes.
Partner with great suppliers
Finding reputable, licensed tradespeople is essential. They should be able to do most of the legwork in terms of quotes, schedule of works and suggestions on materials. This is their area of expertise so you should feel comfortable putting them in front of your client if needed. They are an extension of your company and are representing you whenever you refer them on, so choose your partners carefully. It’s like hiring a staff member: research slowly and cut quickly if they cause any issues.
Emphasise the benefits
Explain to your investor what’s in it for them when they maintain their property. Most investors want the process to be easy for them as well:
- When the property looks well maintained you attract a better quality tenant
- Especially in this market you need your property to stand out (for the right reasons)
- Fewer maintenance requests throughout the tenancy, which means fewer headaches for everyone
- Happy tenants who could then want to continue living in the property year on year
- Highest rent for the property
Start to build case studies
One of the most obvious benefits of using case studies is that they represent the view of your customers and clients, not your company. They are a factual account of work taken place and provide evidence of your company’s ability to get results. This can also act as a third-party endorsement of your brand. Sometimes, simply knowing that other investors have done a similar project and what outcome they have achieved is enough to give an owner confidence to move forward.
Build your case studies so they are easy to understand. There should be five parts:
- A summary of the problem or area of concern
- A high-level quote
- A summary of how long it took and anything you learned along the way, plus a quote from the investor on the experience and outcome
- A summary of financials – what it cost, the increase in rent and any capital appreciation.
- Before and after photos
We are asset managers
It’s not enough any more to simply manage a property, collect rent, get tenants and do inspections – we need to manage the asset for the investor, and this means adding more value and ensuring that we are maximising the return on the property. If you want to stand out from your competition it’s important to have this mindset.
So be prepared, understand the outcome you want to achieve and why, then pick up the phone and talk to your investor. Preface the conversation with the reason for the call and that your role is to be constantly looking for ways to add value. As an investor, if my property manager had that conversation with me, they would have my full attention.