Post on 16-Apr-2017
Landlords and the 2% Rule
David FaulknerDirectorJohn Crocker and Associates29th September 2015
Johncrocker.nz Ltd Licensed under the REAA 2008
About the presenterDavid Faulkner• 11 years experience• Been a Property Manager• Former chair of REINZ Sector
Group• Now Director of John Crocker
and Associates• Live in Wellington
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
Why do we lose them?
Sell40%
Reoc-cupied20%We ended
5%
OTHER35%
How Many do you Lose a Year?
Between 15% and 20% per year
What Do Landlords Think when the Property
Manager Calls?
How much is this going to cost?
How do Property Managers feel about calling their
owners?
It does not have to be this way
What is your Property to Landlord Ratio?
Between 1.3 and 1.4 Properties per
Landlord Client
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
Approximately each Property Manager will have 100 Landlord Clients to look
after
How often shall we call a landlord client with something positive?
1 Call every 3 Months4 Positive Calls a Year
How long does a positive call take?
Approximately 5 minutes
4 calls to 100 landlords
= 400 calls per year
How Many Workdays• 365 days in the year• Take away weekends• Four weeks annual leave• Statutory Holidays
229 Working Days Per Year
400 Phone calls
229 Working days
2 calls per day
How many working minutes in the day?
480 minutes
2 Calls per day = 10 minutes
480 working minutes per day
100%
2%
Are your landlords worth 2% of your time?
YES
Why don’t we do it?
FEAR!
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
10 Reasons to Call1. Inspection2. New tenant made first payment3. New landlord, first statement4. Annual rent review5. Client function
10 Reasons to Call6. Follow up on repairs7. Changes in Legislation8. Year End Statement to Accountant9. Annual planning for investors10. Do you want buy more?
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
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
Your Pie Chart Should Look Like This
Sell60%
Reoc-cupied25%
Other15%
If you do this for 12 months the end result will be
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
Thank you
4th November: Auckland
11th November: Wellington
18th November:Christchurch
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