Keeping your rental stock steady over the course of a year is like carrying a bucket of water with a hole at the bottom.
The natural rate of landlord churn means that properties are regularly lost from your portfolio irrespective of how good your service is.
Chris Walkling of www.fixflo.com looks at three simple steps you can take prevent the trickle of landlords leaving your portfolio from becoming a flood.
What's the Problem
Looking at research from Bain and Company* (a global management consultancy company):
it costs 6-7 times more to acquire a new customer than retain an existing one
a customer is 4 times more likely to defect to a competitor if the problem is service-related than price- or product-related
a 5% reduction in the customer defection rate can increase profits by 5 - 95%
None of this should be a surprise.
You should not need to advertise to your existing customers to tell them what you do, or to spend time persuading them that you do it well.
In addition, having experienced your service they should be more receptive to fee discussions based on value rather than cost.
All good newsunless something has gone wrong during the previous tenancy and as we know managed properties are provide your highest percentage fees but also a never ending list of things that go wrong.
What can you do
1. Be Transparent
When things go wrong keep your landlords informed about the issue, the route to resolution and expected timeframes.
Nothing is more likely to upset a landlord than seeing an unexpected deduction from their rental statement.
Transparency has the added benefit that landlords can see the work that you are doing to earn the management fee when a lot of what you do may not otherwise be noticed.
2. Never Miss A Repair
Small issues that are left unattended to can lead to tenants withholding rent and the painful choice of an awkward conversation with a landlord or a dent in your wallet.
The landlord is likely to have entrusted you with their single largest asset.
You wouldn't appreciate it if your bank manager scribbled down details about your bank account on a scrap of paper and then lost it.
Make sure you have robust systems in place to capture repairs information and to track all repairs across your portfolio to completion.
3. Build Institutional Knowledge
Your advantage over all of your competitors is that during a tenancy you will have built up knowledge about the property and the landlord's preferences.
Make sure that doesn't walk out of the door if your property manager leaves otherwise you'll be back at square 1.
How Does Fixflo Fit Into the Lettings Equation
Fixflo in 90 Seconds! from Fixflo on Vimeo.
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