top ten mistakes property management business owners make

David’s Top 10 Mistakes

www.johncrocker.co.nz 3


#10 lack of effective leadership

www.johncrocker.co.nz 5 5

Me

Property Manager

www.johncrocker.co.nz


#9 taking on all business


D

• Property• Fee• Client

C


B


A



#8 lack of financial knowledge


What is your Average Revenue per Property?What is your Potential Revenue per Property?What is your Marketing Spend?What is your Customer Acquisition Cost?What is the Average Lifespan of a Property?What is the Lifetime Value of a Property?How many Tenancies do you let per month?What is your wage costs in relation to revenue?Costs on printing, cars, stationary, rent?How much do you give away in compensation?


Are you maximizing income?Potential Revenue• 500 units at $400• Management Fee 7.5%• 96% Occupancy• $10,000,000 rent per annum• $750,000 management fee• $100,000 letting fee• $850,000 revenue

Actual Revenue• 500 units at $400• Management Fee 7.5%• 80% Occupancy• $8,400,000 rent per annum• $630,000 management fee• $84,000 letting fee• $714,000 revenue


Customer Acquisition Cost

Marketing Spend $42,500 per yearTime Spent 100 hours $6,000Business Development Manager $70,000Total Spend $118,500Managements won 120Customer Acquisition cost $987.50

Annual Revenue $1,700Life Time Value $8,200Total Revenue $984,000


#7 no clear strategy

www.johncrocker.co.nz 14 14


#6 failure to audit


#5 lack of measurement


KPI Actual Target Difference

Revenue $13,725 $13,500 $225

Arrears 1.5% < 3% of tenants -1.5%

Inspections 22% > 20% portfolio 2%

Occupancy 96% > 95% portfolio 1%

Management Fee 8.17% 8.25% 0.08%

New Lets 7 8 -1

Won Managements 7 6 1

Lost Managements 7 4 3

Average Rent $315.25 $310.00 $5.25


Owner occupied

30%

Listed or sold27%

List or sold other company

5%

Sacked5%

Other33%

Lost Managements


#4 the wrong people on the bus


#3 not listening to our customers


#2 lack of education


#1 not looking after your team


“The ability to deal with people is as purchasable a commodity as sugar or coffee and I will pay more for that ability than any other under the sun”

John D Rockefeller 1839 to 1937


Thank you

[email protected]

mailto:[email protected]

top ten mistakes property management business owners make

Real Estate