We’re regularly asked what actions need to be undertaken to maximise the retention of properties when selling and buying a rent roll. Such actions are applicable across all sectors of the industry, for residential, commercial and strata rolls, and not just restricted to residential portfolios.
By way of updated evidence to support our observations, during the past year retention rates of rent rolls sold by Realestimations ranged from a high of 96% to a low of 19%.
So, what lessons have been learned from this, and what areas need close attention to ensure your retention is closest to the former figure and not the latter?
We’ve identified the key actions to maximising retention are:
Buyer and seller working in unison
Once the Rent Roll Sale/Purchase Deed is signed, it’s important for the buyer and seller to present a united and collegial approach to property owners and tenants. Working together in unison ensures a smooth transitioning of the rent roll ownership.
Work to a structured timeline
Don’t wait until your Sale/Purchase Agreement becomes unconditional to put in place a strategy of communication with property owners and tenants. Adopting a structured approach, establishing a time line of events and, undertaking timely follow-ups with property owners and tenants, will significantly reduce the stress of the entire process.
Communicate with your property owners
Property owners need to feel that they are an important part of the process as they undoubtedly are. Communication with owners need to be personalised and should be through telephone calls rather than emails, where possible. If the portfolio is too large, a professional and personalised email should be individually addressed to each owner. Sending the new Management Authority with a generic email to owners must be avoided at all costs. The single, biggest complaint we’ve experienced from property owners, is the feeling of being “sold” like a tradeable commodity.
Take an Active Interest
Work in conjunction with your Property Management team in having the new Management Authorities signed. Do not allow your Property Management team to have full responsibility of this. Instead, take an active interest and ensure that a weekly review of the number of returned Management Authorities is conducted. As the selling or buying Principal, you should make an effort to speak to every owner to alleviate any concerns or uncertainties they may have towards the future direction of their property, the income, and tenants.
Ensure Continuity of Management Fees
New Management Agreements must incorporate the same fees and charges as those currently enjoyed by the selling agency. Any increase in fees will result in property owners’ potentially sourcing for a cheaper alternative agency or self-managing.
Ensure Management Agreements are correctly signed
Management Agreements must be correctly signed in order for them to be legally valid. If the Authority requires multiple initials or signatures, the relevant signing sections must be highlighted When required, use the services of DocuSign or similar document signing service.
The above strategies have been formulated from our experiences of managing the buying and selling process. Through our years of practice, we’ve discovered that in ensuring the smoothest outcome possible for the property owner, tenant and the buying and selling agencies; both agencies must establish a structured approach and work together to ultimately achieve the maximum retention rate of rent rolls.