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Rent roll delivering security

Rent roll delivering security

The listings drought in 2016 highlighted for many real estate agencies the value of having a substantial rent roll to maintain cash flows during the inevitable highs and lows of the property market. And with 2017 looking just as challenging as last year, compounded by the prospect of upward interest rate movements encouraging potential vendors to stay put, having a reliable and constant income stream derived from property managements would seem a no-brainer.

Yet not every real estate business has the capacity to deliver the expert and professional property management service that a landlord and tenant should expect, nor for that matter the desire.

The skills and temperament required to effectively manage property are quite different to those that make a good sales agent. Having a great network of contacts is not much help unless that circle includes a bunch of good reliable plumbers, electricians and locksmiths. Nor is it enough to have a talent for getting on with people when an orderly and structured management approach is more useful.

One of the key advantages for aspiring business operators with R&W’s Bespoke franchise model is the ability to develop a rent roll without having to do the hands-on work. The nuts and bolts of operating the rent roll are instead undertaken by the company-owned R&W Property Management.

Bespoke agents not only keep a proportion of the management income but they also own a significant part of the asset value of the properties they refer into the rental pool. In this way they are able to build a tangible and valuable asset without having to incur the substantial staff requirements needed to run the managements, or answer midnight calls from tenants. It’s a way of building equity in their business without being diverted from their primary business of listing, marketing and selling property.

Many agents are in real estate because they are extremely good sales people. However the very nature of real estate means that their business and income is vulnerable to factors beyond their control. The past four years have seen property values sky-rocket in Sydney but last year proved that property booms do not always favour the agents handling the transactions with both listing volumes and average commissions being under pressure.

A good operator however will see opportunity and seize it. Investors have been the most active participants in the marketplace these past four to five years with the number of new loans close to equalling those for owner-occupiers. With the projected population increases across Australia, there will be increased demand for rental properties, particularly in major metropolitan and regional centres along the Eastern seaboard.

That translates into more properties than ever in need of professional management. Richardson & Wrench has long maintained strength as a property manager with landlords valuing longevity, reputation and professionalism when deciding who they’ll entrust with their property asset.

All of which bodes well for the many traditional R&W offices who are seeing their rent rolls – and income – increase apace with the market and the Bespoke operators who are able to watch their business grow with precious little effort.

 

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