Landlords and the 2% Rule
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These are slides from the webinar that was done on building great relationships with landlords and investor alike. We also demonstrate why time is not an issue.
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Landlords and the 2% Rule
- 1. Landlords and the 2% Rule David Faulkner Director John Crocker and Associates 29th September 2015 Johncrocker.nz Ltd Licensed under the REAA 2008
- 2. About the presenter David Faulkner • 11 years experience • Been a Property Manager • Former chair of REINZ Sector Group • Now Director of John Crocker and Associates • Live in Wellington
- 3. What this webinar is about • Focusing on the benefits of a positive relationship • Result of this is fewer losses • Internal growth • Word of mouth referral • Extending the life time value
- 4. Why do we lose them? Sell 40% Reoccupied 20% We ended 5% OTHER 35%
- 5. How Many do you Lose a Year? Between 15% and 20% per year
- 6. What Do Landlords Think when the Property Manager Calls?
- 8. How much is this going to cost?
- 9. How do Property Managers feel about calling their owners?
- 11. It does not have to be this way
- 13. What is your Property to Landlord Ratio?
- 14. Between 1.3 and 1.4 Properties per Landlord Client
- 15. Staff to Property Ratio • Most common system used is portfolio based • Seeing an increase in POD system • Approximately 80 to 90 properties per member of staff • Property managers manage on average approximately 130
- 16. Approximately each Property Manager will have 100 Landlord Clients to look after
- 17. How often shall we call a landlord client with something positive?
- 18. 1 Call every 3 Months 4 Positive Calls a Year
- 19. How long does a positive call take? Approximately 5 minutes
- 20. 4 calls to 100 landlords = 400 calls per year
- 21. How Many Workdays • 365 days in the year • Take away weekends • Four weeks annual leave • Statutory Holidays 229 Working Days Per Year
- 22. 400 Phone calls 229 Working days 2 calls per day
- 23. How many working minutes in the day? 480 minutes
- 24. 2 Calls per day = 10 minutes 480 working minutes per day 100%
- 26. Are your landlords worth 2% of your time?
- 28. Why don’t we do it?
- 29. FEAR!
- 30. What are Afraid of? • Being asked a difficult question • Prompting them to sack you or sell • Scared of looking stupid • They may remember a bad experience • Create more work • Or they may take over the management
- 31. 10 Reasons to Call 1. Inspection 2. New tenant made first payment 3. New landlord, first statement 4. Annual rent review 5. Client function
- 32. 10 Reasons to Call 6. Follow up on repairs 7. Changes in Legislation 8. Year End Statement to Accountant 9. Annual planning for investors 10. Do you want buy more?
- 34. What is a Life Time Value? • $400 per week at 8% • $20,800 in rent per year • $1,664 • Life span of 5 years • $8,320 + 2 letting fees $9,120 • Rent increases and ancillary fees • TOTAL LTV = $10,000
- 35. What happens if we extend by 2 years? 1. Life time value extends by approximately $14,000 and $15,000 2. Other benefit they may buy more 3. Aim to get property to landlord ratio to 2:1
- 36. Your Pie Chart Should Look Like This Sell 60% Reoccupied 25% Sacked 0% Other 15%
- 37. If you do this for 12 months the end result will be
- 38. 1. You will grow your rent roll 2. You will lose less properties 3. Your investors will buy more 4. You will get more referrals
- 39. Thank you
- 40. 4th November: Auckland 11th November: Wellington 18th November: Christchurch
- 41. Is brought to you by