Building a Budget for a Profitable Department

Profit, Profit, Profit! 

• What was your profit last calendar year? 
• What is your target next year? 
• How are you tracking? 
• Do you have a growth plan? 
• Do you have a budget? 
• Do you split your profit centers?

These are questions and conversations that I hear being asked in offices and at real estate events. Do you have the answers?

Why are you in business? As an entrepreneur, it may be to, make money.  Whilst there are other benefits to having your own business, this is the bottom line.  In basic terms, making money maps back to having a profitable business.


So how do we build a profitable business?

Current position

In building a business, you must start with a clear outline of the current position.  My number one rule is that you MUST split out the various business units. i.e if you have a property management department and a sales department these should be separate cost centers.

Separating the businesses provides a clearer picture of the financial position of the property management department.  Simply all income and expenditure for that department are allocated. In the case of operational costs these are proportioned for the department. The key is accurate allocation - Start by mapping last financial year and identifying your true department profit.

Planning

All building is done with a great plan. Create a plan to build a profitable business by setting your targets for the year first. Do you want to increase profit, $ or %? Or decrease expenses.

To achieve these targets you will need to look at planning for both the direct financial aspect of the business as well as the non financial actions that must be taken to reach the goal.



Budget

• Financial planning is in the form of a budget.
• A budget identified income and expenditure predictions and the projection of profit.

Business Plan

• To achieve the financial targets there will be clear actions that must be taken. What are these actions? 
• A simplistic approach is to create projects. Using growth as an example, what needs to be done in order to grow the income of the business? 
• One aim may be to increase the number of properties under management. Great, how do we do that? What actions are needed? 
• What resources? 
• What materials? 
• A project plan will assist in creating this strategy, but of course it is the execution that is fundamental.

Next week we take look at Execution and Accountability and its role in building a budget for a profitable department.

Fiona Blayney

Rent Payments This Christmas!

Make sure tenants don’t over indulge and underpay rent this Christmas!

Christmas should be a fun time, and it is no fun suffering the stress and worry that comes with mounting arrears over the Christmas period.

For tenants there can be serious pressure to buy gifts and entertain friends and family over the holiday season. Given these pressures, it is an unfortunate reality that some households choose not to pay their rent so they can prioritise other spending. Research from Shelter UK shows that one in 12 tenants are prepared to forgo their rent payments over Christmas, there is a significant risk that your arrears figures could grow.

Everyone takes a different approach to arrears, some taking a harder no tolerance line, some taking proactive steps to help ensure their tenants get their rent paid to avoid eviction. Either way at the end of the day if we can avoid eviction it is better for all parties involved. Whilst the majority of your portfolio may be good rent payers, this is the time that some of them will slip, and this is also a time that a repeat offender is more than likely to re-offend.

Some options to combat arrears at this time to minimise our stress include:

• Running a marketing campaign in the build up to Christmas that aims to deter from tenants falling behind, to see some examples of Christmas arrears marketing campaigns click here.
• Offer a financial support and advice service through assistance with budgeting plans. Some company’s provide a flyer with budgeting advice, some will go so far as offering a financial planning helpline to call.
• Implement Rewards/Incentives to ensure all payments are on time:
• Running a competition for all who keep their rent up to date
• Offering movie tickets for all who are two weeks in advance over the period
• Providing special personal warnings to repeat offenders, almost to let them know that we’re going to be watching their arrears very closely over the period to make sure they stay on time.
• Some agencies even offer the tenants an option to pay extra throughout the year to help them get a bit ahead for these tighter times.
• Reminding tenants of importance of maintaining positive ledger, instead of threatening termination, let them know you want to help them maintain a positive rental ledger to assist with future rentals (and even mortgage repayments as these days some lenders are requesting this information)
• Utilise your blog, newsletters and social media to educate and share the message

Be sure to choose what works for your agency and your brand. Don’t forget to score some brownie points with the owners and let them know what you’re doing to ensure they don’t have missing payments over Christmas! What other ideas do you have for keeping your arrears low at Christmas time? Please share them below!

For our Real Plus members be sure to check out our Christmas Letter template on your portal and stay tuned for more Christmas tips in your daily property management hints.

Hermione Gardiner 

What is your point of difference?

Standing out from the crowd is essential for new business success in property management, especially when it comes down to a choice between you and a handful of other nearby competitors.

But what do you think happens when I speak to my clients and ask what they see their point of difference or unique selling point is? 

You guessed it!  Most of them, are the same points of difference! 

We recently conducted a survey where we asked agencies all around Australia and New Zealand what their unique selling points were, click here if you wish to peek at a
free copy of the results.


So how do you find your point of difference and then market it effectively? Two of the simplest ways to do this will be through A) researching your competitors, and b) the researching your customers.

Firstly consider, do you know exactly what service your competitors offer? Many clients we coach often find the handful of items they are selling as their points of difference (POD) are actually no different to the agency down the road. No point selling it as a POD if the guys down the road do it too. Perhaps you will need to mystery shop your competitors to find this information out.

When you do find a POD through this kind of analysis, think first, does this POD mean something to the client? Often we see points of different that sound great but have no real meaning from the client’s perspective. Secondly think, can it be it tangible? How can you demonstrate this? What tools do you have within your office to prove what it is that you are saying?

For example if you are saying “we get faster results”..... how exactly can you demonstrate? Do you know your average days on market? Do you know your average vacancy rate? What are your recent results compared to your competitors? How can you use this data to show your point of difference to the prospective client?

Second option is to ask someone what makes your agency stand out. Someone not related to you, so not your mother or sister or husband or best friend. Ask your customers. Ask them why they selected to use you. Ask them if they considered the competition and if so what made them chose yours instead. Ask them what they like about your service, and what they don’t, and ask them why they feel your product is the best choice for them.
Ask as many customers of your customers as you can, you will quickly find some great points (that actually mean something to the client) to draw from in future attempts to win business. If you aren’t asking this question upon a new client signing, try to, or consider conduct a new client survey through something like Survey Monkey for every new client.

Once you have established some real key POD’s then you will have some differentiating points that can overcome the price objections, because you will have tangible points that show value over the competitor. Because unless you can differentiate on value or service, it will always come down to price.

Hermione Gardiner

Where Do Your Lost Clients Go?

When an owner decides to leave, whether through selling, reoccupying, self managing or transferring the management to another agent, what happens to that client?  

• Is it good riddance for them to never be seen again? 
• Do we close the file and never think of them again? 
• Even worse do we bungle up the exit as we don’t care so much what happens to them now that they are considered lost?

Next time a client walks out the door, instead of saying goodbye, why can’t we say, see you again soon. Why can’t we simply move them into a category of what Real Plus likes to call an “inactive client” and push them back into the prospecting pool. We may be cutting off future new business opportunities if we don’t better manage this process.

Whist their current circumstances may be that they no longer need or desire our services, we need to remember that people’s circumstances change and there may come a time when they wish to rent, lease out, buy or sell a property in the future.  Wouldn't you, as the agent, like to at least be on their shopping list?  Wouldn't it be great is they referred people to us if they may know someone who needs one of our services, so we really do not want to be severing this relationship for good.

I have been able to retrieve several managements over the years that owners have decided to self manage, move to another agent and even move into. When the first home buyer grant rush happened I kept in contact with a lot of those purchasers who were owner occupiers and was able to recover many of them as managements down the track by simply keeping in contact and keeping them educated.

• Allocate & diarise follow-up calls - It's important to try and keep the relationship with the agency alive and burning.  No matter how long after the owner has taken back the property, you just never know when they may be thinking, or know of someone thinking of buying, selling or renting.  There is always the possibility they will become an active client again!

• Learn the exact reasons they are exiting.  Knowing the reasons helps you to continue to improve, upgrade your internal procedures and systems, and minimise risk for future avoidable loss.  Feedback can be a very powerful tool for improvement. The exiting client should always be contacted by management to discuss the real reasons they are leaving. Imagine a few weeks later the exiting landlord receiving an update that a whole new procedure had been put in place to overcome the issue they had.

• Never give up!  Of course there will be some disgruntled clients who are leaving (for whatever reason), but I also encourage you not to give up on repairing the relationship and leaving things on a good note, even if they chose not to stay with you at the end of the day.

• Can another property manager or contact point better service this client?Another idea may be to offer the disgruntled client a choice of new property manager or contact point. Sometimes a management can be saved for the agency if it was managed by another person in the office. Sometimes however, we may be better off without the client at all, in which case we will be divorcing that client – still remembering to keep face for the agency’s public image.

In order to ensure an exiting client is dealt with effectively and ensure the best possible chance for either them to return to us, or perhaps someone they know to be referred to us, we use an exiting landlord checklist which is commenced as soon as an owner gives notice.

For your free copy of this checklist please click here!

Corded windows compliance - How does it affect your agency?

There has been a big increase in the number of enquiries in regards to Corded Window Compliance, with Agencies asking us what they need to do.

We can all probably agree that something is required to prevent strangulation of young children.

Since 2001, eleven children have lost their lives due to strangulation of a cord attached to a fitted blind or window.

Due to this potential hazard, particularly affecting young infants and toddlers the Australian Competition and Consumer Commission (‘ACCC’) have updated the current legislation nationwide in relation to Internal Corded Windows. As of the 01/01/2015 all new installations of any window coverings or blinds in domestic dwellings must be met with the new mandatory safety standards.

This new legislation states that any loose cord within the residency cannot form a loop 220mm or longer at less than 160cm above floor level, and that all coverings must be installed as per the installation instructions in order to meet the necessary requirements for cord safety. Cleats or similar devices that are used to secure or wound a cord are strongly recommended but must be attached to wall or other structure measuring at least 160cm above floor level.

Landlords or agents failing to comply with the new legislation are in breach of the ‘Trade Practices Mandatory Safety Standards’ and can face loss of license and penalties up to $220,000 for individuals and $1.1 million for companies, as well as the possibility of compensation claims.

The Legislation is specific to New Installations of window coverings and, at this stage, there has been no sunset clause that is requiring all existing properties to meet the code.

SATS have looked at all the legislation to make sure that the comprehensive service that we currently offer, not only meets current legislative requirements, but also the changes that are anticipated in the future.

We are already providing this comprehensive service to many agents across Australia and as well as to some Government housing contracts.

The SATS Corded Window Compliance Program is $99inc GST that includes an Annual inspection, including all fixtures and fittings, and also an additional inspection at Change of Tenancy, to ensure the property is safe for ingoing tenants and their guests.

Article provided by SATS

Please contact 1300 416 667 or visit https://www.sats.com.au for an Australia-wide service.

Don't just expect the unexpected... Plan for it!

I recently heard a trainer use the phrase “property management is a series of predictable surprises.” True, isn’t it? In property management, new business, leasing and life in general for that matter, we can often sense when things are going to go wrong, or can recognise the warning signs of issues you’ve seen before. Do you take the necessary steps to prepare or prevent the occurrence? Or do you simple hope it won’t get to that ‘dreaded point.'

When there’s a fire at hand, we put it out and rush on to the next problem without taking the time out to look at our internal processes and what we can learn and put in place to ensure the same issue doesn’t recur over and over. Taking the time out to review what went wrong and how to avoid it happening again is essential for business success as it ensures we minimise errors and conflict, whilst staying as efficient and productive as possible, and importantly, that our service to our clients is constantly improving.

When I am coaching and consulting with clients across the country, part of my role is help clients to review their systems and look for the tell tale signs of potential issues such as higher arrears, prolonged bond refunds, escalated complaints over lagging repairs, vacancy levels creeping up, loss of managements and more. So based on what I’ve learnt, what can you do within your business to ensure the same recurring issues don’t keep happening?

• Seek feedback – if you aren’t already surveying your clients, it is essential to ask them for both positive and negative feedback to work out how to improve what you do and avoid issues recurring.
• Complaint/Issue Log – Keep a complaint log detailing actions taken, errors paid out, if review of process is required (free template available here)
• Review – create a review process where your procedures (and complaints) are reviewed periodically (can be a team effort). Remember what worked 10 years ago may not work today.
• Scenario Planning & Contingency Training – from the above results decide what additional training can be provided to the team either internally or from a training provider to cover not just the hard skills but soft skills such as communication and conflict resolution.

As I’ve said before, always remember (as spoken by Catherine Devrye), the most “expensive words in business are, we’ve always done it that way”. 

6 tips to get your customer ready to move

To help make your customer’s move as enjoyable and exciting as it should be, we have the time to find out what things 'movers' most commonly forget . These oft-forgot items are listed in this article, to help minimise the stress of moving and for renters will ensure they get their bond back. You could also visit us at Direct Connect for full list of Moving Checklist.

Before Moving Day:

• Write a Checklist - Yes, write a checklist! This may be the simplest task to complete, but it?s commonly forgotten because of that simplicity. This is the most important part of organising your move, as it allows you to ensure everything is planned for before, during and after the move. This can then eliminate any concern of leaving behind belongings, or not planning ahead.
  
  When writing a checklist, be sure to add specific details. For example; don't just write boxes as a checklist point; estimate or determine how many boxes you may want or need. You can then mark down how many boxes you use so that there is no risk in losing any of your personal items or belongings.
• Protective Materials - The first protective material everyone thinks of is bubble wrap. However, this isn't always the most appropriate protection material when moving. Items such as moving blankets or rags have more flexibility and are better suited for larger items such as dining tables, coffee tables and couches etc. They allow you to shape the material better to protect the edges of your larger furniture items.
  
  On top of this, when you're transporting furniture or fragile items, you want to ensure that these won't move around and damage one another. Simple materials such as ocky straps, rope or ties are ideal for packing your belongings for travel.
  
  Last but not least, tape. Whether it's masking or regular tape, this is an essential for not only securing boxes but for holding the blankets and rags in place when transporting your belongings.
• Label by location and contents - Labeling your boxes is something that everyone does; however after the large number of boxes you will pack it's easy to forget what contents are in each box. When labeling each box, simply include more detail than just the room or location. For example: label the box 'Kitchen, Bowls'.  This way when you're packing, you save yourself a great deal of time.

Organising Utility Connections:

• Disconnect & Reconnect your current utilities - When it comes to moving home these two tips are constantly forgotten and can quickly become the biggest problem you'll have before moving day. Organising your phone connections, TV connections and other utilities with your provider is essential and needs to be done as early as possible. It's is important to give them as much notice as you can as this will help you have a seamless transition when turning off and turning on your connections.
  
  It's a pain to be charged for a connection when you're no longer living in that household as well as not having a connection to any utilities once you?ve moved into your new place.

Moving Day:

• Give yourself twice as much time - It is very common to underestimate the time that it takes to move. There is an extensive list of jobs and tasks that you need to do prior to the move and on moving day in particular. It's always better to overestimate your time to ensure everything is complete during the time period you've hired a moving company, or for the time you've set yourself to move.
• Don't forget the Small Things - These are the smaller items that are usually of less value, however are commonly forgotten or left behind. Items such as:
• General Items
• Phone/iPod/iPad/Computer chargers and cables
• Power boards
• Door hanging mirrors/hooks
• Any storage items from under the house, storage cupboards or in the garage
• Kitchen Items
• Cutlery trays from your cupboard
• Food from the pantry or kitchen
• Bathroom Items
• Shampoo & Conditioner
• Toilet Cleaners
• Bins
• Cupboard items

If your customer follows these tips, they’ll get into their new place with ease and hopefully without any panic calls to the property manager. 

Article provided by Direct Connect.

Please contact 1300 664 715 or visit http://www.directconnect.com.au/ for an Australia-wide service.

Do you have outcome based conversations?

Do you have outcome based conversations?
by Hermione Gardiner

When you become aware of a conversation you must have with someone, especially an unpleasant or tough conversation, your mind usually comes up with a whole list of things you DON’T want to happen. Thoughts such as “I don’t want them…”

·         to get emotional

·         to lose it and get angry

·         to personally attack me

·         to make a complaint about me

Rather than focusing on what you don’t want to happen, focus on what you DO want the outcome of the conversation to be. In property management it’s important to go into every conversation, whether it’s unpleasant or confronting, with an outcome in mind.

Outcome based conversations are not just essential for property managers, leasing consultants, new business consultants and anyone on the front line dealing with the client. They can also be used when having conversations internally within the business and also in your personal life!

When you worry about what you don’t want to happen, or are not sure of the outcome you are trying to achieve, you end up giving the other person all the power. When you stay focused on what you do want you’re more likely to stay in control of the situation and achieve your desirable outcome.

A lease break doesn't have to be a headache

Hearing the words “I want to break my lease” can bring fear and terror into even the most experienced property manager. These words can almost always predict a headache in one way, shape or form and it can become a stressful situation for the tenant, landlord and of course us as the property manager.
It seems that tenants, and even landlords, breaking their leases are becoming far more common these days. The break of lease situation is not something we are immediately taught to handle, and has traditionally been left unspoken about as nobody wants a client to break their lease.
I learnt very quickly from some mistakes I made when dealing with a lease break, so this week I ran a webinar on this exact topic to share everything I have learned to make the situation the least stressful as possible. In preparation for my webinar session I delved down into how to best handle a break of lease situation, create a procedure and communicate this effectively to your tenants and landlords to reduce stress for all parties involved. 
Beyond the legislation side of things, a few of the main points to take away included:

• A strong procedure – Your break lease procedure needs to be set in stone and consistent across all staff in the business. I need to be able to walk into your business and sit in the property managers seat and know exactly how to deal with it at every step of the way. When you know the procedure it makes it much easier to train on it, communicate it to your clients and leaves less room for grey area.
• Transparency – Being transparent to all parties on their obligations and risks is key, ensuring the person breaking the lease agrees to all the terms in advance in writing and is aware of any risks. Why not even provide the tenant with a break lease form from the sign up meeting (along with a normal vacate form) so the tenant knows exactly what they need to do if a situation does arise. This also keeps communication lines open and hopefully they will be open to talking to you ahead of a potential lease break, and know that you have a process to deal with it.
• Communication – You may think you communicate well normally, however in a break of lease situation you need to step this up even further. Lease breaks are one situation where you need to over-communicate with both parties. Remember to keep both the landlord AND the tenant updated across the leasing process.
• Understanding – Remembering that generally speaking, no one has started their lease planning to break it. There are some really difficult and challenging situations that cause people to have to break a lease - financial, relationships, relocations and more. We need to put ourselves in their shoes and do what we can to make it less stressful. When they are getting fired up, remember where they are coming from and it will help you respond in a better way.
• Keep good records - Keep records of everything from copies of notices down to the number of enquiries received each week, price reductions, reasons for applications not being accepted, comparable properties and more. Keep everything in one place (for a free copy of my checklist on what evidence to keep in-case the break lease escalates click here)
•  Mitigating Loss - Our main duty in the break of lease situation is to minimise any potential loss to landlord and mitigate the tenants potential loss. This means that the methods we usually rely on to get a property leased may not be sufficient. What more can we be doing to assist in finding a replacement tenant? Additional marketing? Rent reduction with the tenant paying the shortfall? 

Would you want to receive YOUR newsletter?

Our clients and members often ask us for assistance with developing their monthly e-newsletter or e-marketing for property management. We can easily help them with content and ideas, we even have an e-book full of great investor tips they can use. However it is the execution and delivery of a regular, ongoing successful newsletter (that actually grabs people’s attention, has a purpose and keeps them reading each month) that is the challenge.

The concept of the newsletter has become somewhat washed out in our digital age (much like the plethora of junk mail and pamphlets that go straight from the letterbox into my bin each week). I can’t even tell you how many “newsletters”, “updates”, “blogs” and “specials”, come in each morning. Today I had over 30 new emails of this nature.  What happened to most of them? Terminal deletion - never to be seen again.

When we see similar subject lines and the same content over and over again we are naturally bored, closed off and less likely to open the email at all. I’m sure you don’t want this for your e-newsletter and e-marketing so it is important before pressing send each month to put yourself in your readers shoes and consider:

• Would you want to receive this newsletter?
• Would you open it?
• Would you read it?
• What benefit would you get out of it?
• Does it educate, inform and excite?
• Would you pass it on or share it with friends and family?
• Would it direct you to do more business with you?
• Would it strengthen your relationship?
• Does it direct traffic to your website?

Building and developing a regular ongoing successful e-newsletter doesn’t have to be a cumbersome process. But in this day and age you do have to be doing it well in order to stay at the front of your clients mind, easily communicate with them on a bulk scale and to be seen as the experts. It doesn’t have to be rocket science however so take a look at our e-Newsletter Procedure – usually only available to our members – which breaks creating a successful e-newsletter down into 10 steps. 

Got a property that won't lease?

Tearing out your hair with a property that won’t lease? Freaking out at the days on market creeping up? Having trouble convincing an owner to reduce their prices? You are not alone. Many of our members and clients around the country are experiencing some tougher times in leasing at the moment and are frustrated in getting their owners to reduce their rents to meet market conditions.

If the property is in good condition, marketed correctly, and available to be shown, as agents we usually know it’s the price that needs to shift. Price adjustments typically aren’t easy and often you will feel like you’re fighting against your owner at this stage of the property management process (despite the fact that effectively you are both on the same team, both wanting to get the best possible rent in the least amount of time).The important word to note here is “possible”.  Securing the best possible rent doesn’t always mean the highest rent the property has ever received. What this means is securing the best possible rent for that particular point in time, given market conditions, tenant options and situation.

The first problem is that often landlords have an assumption that the rent should continually be going upwards. There is a lack of education to these clients surrounding the time of year, market conditions, recent data, and a realistic comparison of their property to others on the market.

The second issue is that because the rental market moves so quickly, the price from a few weeks ago may not be accurate today - but we aren’t educating them along the way so they know this, we assume they know what we know, and it’s usually weeks into marketing the property before we start to speak to the owner about reducing the price to meet market conditions.

In markets like this it’s often not enough to rely on your normal renting tactics – list property online, take enquiry, show apartment, receive application, hey presto -  apartment rented!
You may need to use a few new tactics to communicate smarter with the owner to ensure you can get faster results:

1. Use your data – There is a plethora of data available to you in the property management world that is underutilised at all stages of the leasing process. Days on market, vacancy rates, registered tenants, properties leased by your agent, properties leased by other agents, number of comparable properties currently on the market, properties leased by agency each week, applications, enquiries, property visits. Data doesn’t lie and can be used to paint a very effective picture to your client from the get go, sharing this data means they can go on the journey with you & be more prepared to agree on price adjustments. Most of us have access to this information, but it’s how you use it that will make a difference.

2. Know your numbers – Know exactly what it will cost the owner to wait one more week for a tenancy. Being able to explain the cost of having no rent coming in versus dropping a few dollars a week over the course of a 6 or 12 month tenancy may help them see how important it is to get a tenant in rather than wait for the top dollar in rent. One of my favourite pieces of dialogue surrounding this comes from Andrew Reece of Inspect Real Estate “Mr Landlord – your property is currently rented for $0 per week..” that should get them thinking...

3. Preset your adjustment dates In relationships we all hate to hear the words “we need to talk”. And the same negative emotion can surround the discussion with the owner around “we need to reduce the price”, especially framed weeks into the marketing campaign. Explain to the owner from the initial stages of leasing that you conduct regular reviews of the market and WILL be recommending price adjustments along the way to ensure we achieve the best possible rent for you in this market in the least amount of time. Using the words adjustment, rather than reduction should help your cause too.
These are some points you can use to improve your process surrounding price adjustments in order to get a faster result, but there are many more great ways to think outside of the box to get your properties leased faster. We have a handy checklist guide to give away to you this week.

Click here to get your free copy of the “It Won’t Lease Checklist” and good luck! 

Why PMs need to have the tough talk about landlord insurance

Congratulations! You’ve added a new property to your rent roll. You and the landlord are at the start of a relationship which will, hopefully, be long and mutually rewarding.

As we all know, that relationship can also be a challenge, with property managers potentially straddling the gulf between tenant and landlord when a tenancy goes pear-shaped.

Many landlords are under the happy illusion that having a quality property manager guarantees them no tenant-related problems.

It’s in your interest to set them straight and open their eyes to the benefits of a good landlord insurance policy, which covers accidental as well as malicious tenant damage, like RentCover from EBM Insurance Brokers.

Sometimes drama strikes even the most carefully-selected tenants. Burglars break in.  They accidentally drive into the mailbox. Their washing machine overflows...

And, of course, tenants’ circumstances can change –  if they fall ill or lose a job and end up behind on the rent.

Some landlords also believe they don’t need their own insurance because the body corporate has cover.

This isn’t correct.  Insurance taken out by the body corporate won’t cover anything that happens inside the four walls of the landlord’s own unit, including potential liability.

Property managers often avoid discussing landlord insurance with clients for fear of overstepping boundaries or complicating the situation.

However, industry professionals who sidestep the issue risk exposing their own business to legal claims.

These days, there’s a real risk of a lawsuit when something goes wrong. If you fail to make sure your landlords have liability cover in place, it’s not only the landlord left exposed but also you and your company.

In the absence of landlord insurance, lawyers can recommend suing an agency or property manager in addition to, or instead of, the property owner.

There’s also potential for owners to sue agents for failing to inform them of the protection available and the need for insurance – or to claim an agent was indirectly responsible for the problem.

It can be uncomfortable having the tough conversation with clients but, remember, they will be the first to thank you if disaster strikes and they find themselves protected because of your care and good advice.

Article provided by EBM Insurance. 

Sharon Fox-Slater is the General Manager of EBM Insurance's RentCover

Please contact 1800 661 662 or visit www.ebminsurance.com.au for an Australia-wide service.

What is property depreciation and how can it help you?

Properties and the plant and equipment assets contained within them all go through a process of wear and tear.The Australian Tax Office (ATO) allows property investors to claim tax deductions based on this wear and tear. This claim is called property depreciation.

Depreciation deductions will significantly improve a property investor’s cash flow. Research shows the average investor can expect between $5,000 and $10,000 in deductions in their first year’s claim alone. Despite the potential returns, research shows 80% of property investors fail to claim depreciation.

Investors can claim two types of property depreciation. Capital works deductions are available for the structural elements of a building; such as roofs, windows and doors. These deductions can be claimed against the building’s historical construction cost at a rate of 2.5% each year for up to forty years.

There are some restrictions however. Capital works deductions only apply to residential buildings constructed after 15^th of September 1987. Despite this fact, the owners of older buildings are eligible to claim depreciation deductions for the plant and equipment items contained within the property as well as for any more recent renovations completed.

Plant and equipment depreciation can be claimed for mechanical or removable assets. Examples include carpets, hot water systems, blinds and light fittings.  These deductions are calculated based on an individual effective life assigned to each asset by the ATO. A dishwasher for example has an effective life of ten years and will be depreciated at a rate of 20% each year.

By educating your clients about property depreciation, not only will you assist their cash flow, but you will also add value to your own service. In turn, investors will be more likely to use your service again when expanding their investment portfolio.

BMT Tax Depreciation offers a complete range of complimentary services for property professionals including training, educational material, webinars, estimates and articles. To find out more visit the BMT Property Professionals page by clicking here. Alternative you can contact one of our friendly staff on 1300 728 726.

Article provided by BMT Tax Depreciation. 
Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Managing Director of BMT Tax Depreciation.  

Please contact 1800 661 662 or visit www.bmtqs.com.au for an Australia-wide service.

Want to know your best marketing weapon?

Beyond the latest designer website, past the shiny DL cards, afar from the perfectly designed brochures, away from the beautiful window display is one very important marketing tool that is often forgotten and overlooked - yet it is the easiest to manage, the lowest cost, and the most effective tool......

Have you guessed it yet?

It’s YOU.

You are the most powerful marketing tool you have at your disposal right now. The way you speak to people, the way you present yourself, the way you appear in the market place, can be ten times as effective as a marketing tool compared to some of the latest and innovative ideas in the industry.

It’s been very interesting for me being on the other side of the property management transaction recently as a prospective tenant looking for a rental property in my local area. I’ve been able to review how fast enquiries are responded to, the conduct of the leasing consultant at the open, the manner of the property manager processing the applications, right through to the sign up process and moving in.... There have been some very impressive dealings, and also some left a lot to be desired. I’m pleased to say I’m lucky enough I’ve ended up with one of the best.

I would imagine that many of these agencies with the less than desirable service to prospective tenants are at the same time probably trying to grow their businesses through marketing, prospecting and new business tactics, without looking at what is actually happening on the front line. From this experience I know which agencies I will be recommending to friends and family and which agencies I won’t.

We need to remember that prospective tenants may not only one day be our future clients, but they also currently know our future clients (their friends, families, colleagues, circles) and of course we want them to be speaking positively about us and our service across their networks!

This got me to thinking if we only realised that the best opportunity we have to market our service, is actually how we conduct our service and ourselves, how much easier it would be to grow our businesses?! Instead of spending thousands on marketing campaigns, what if we spent that time and money investing in improving, training and developing our own skills.

Remembering that YOU are the most important marketing tool that you have at your disposal and that the way you conduct yourself, present yourself, and treat your clients will ultimately provide endless positive marketing, referrals and business for years to come. 

Don't miss our webinar next Wednesday where we'll give you fresh ideas to help you generate buzz around your brand and put the 'marvellous' back into your marketing.

Who is wearing your t-shirt?

Who out there is raving about you? Who is singing your praises? Who is recommending people to you when you’re not there to sell yourself or your service? Who is wearing your t-shirt proudly and being an advocate for your business?

Do you have any t-shirt wearers? Do you have raving fans who would happily spread the good word of your business without being prompted to do so? Word of mouth is the most valued means of advertising and a cost efficient way to boost your business and referrals.

For myself, I know when I find a new product or service that I love, I immerse myself in it and find ways to drop it into every possible conversation. I like to share my knowledge and help other people see all of the benefits of said product/service (possibly somewhat annoyingly so). So much so that sometimes I feel I should be on commission for the latest service, app or product I am pushing.

This got me thinking what it is about those products or services that gets me wearing the t-shirt for that brand. Most people think that word of mouth is just about good customer service. But it’s much more than that. Good customer service is of course important for the success of any business, but if you expect customers who are ‘averagely happy’ to talk a lot about you, think again.

The sad reality of business is that people are more likely to talk about you when they are unhappy, than when they are happy or satisfied. We also need to remember the face of “word of mouth” advertising has changed a lot in the last 10 years with the added share-factor of social media and the internet. It’s easier for people to complain about something and for more people to hear it, than ever before. Therefore good customer service generally just reduces the possibility of negative word of mouth.

We need to take extra steps beyond good customer service to get our customers raving about us and singing our praises. So how do you get people to wear your t-shirt and become brand advocates for you? I believe it comes down to one or more of these three areas:

1. Your product or service makes their lives easier, simpler and faster – Your service makes dealings with you easier, having their property managed by your makes their life simpler, receiving information from you makes their life faster. They don’t have to worry about a thing because of your product/service.

2. You make them feel important and valued – you and your company take extra care to ensure your client is taken care of, respected, involved and listened to.  They are made to feel like their opinion matters.

3. Your perks and benefits are worth writing home about – the cool features and bonuses they receive as being a part of your business are worth telling others about, what do you offer that others don’t?
Remember though that the above is futile if you do not do the basics right. No matter how easy you make it, how special you make them feel, or what perks you offer – if you don’t provide the basics required of a service, you may as well not bother as they will not erase bad service.

Take some time out to have a planning session to work out what you can do to turn your customers into raving t-shirt wears and advocates for your business. Put yourself in their shoes and think what it is that would actually make you rave about your service.

Join our webinar on Wednesday – Gaining Referrals in New Business for more great tips on building your business through referrals. 

How do you stay sane when the pressure is on?

The week ahead of a conference is one crazy time for us here at Real Plus. So it seemed appropriate to discuss how to stay sane during the craziest, busiest times in this week’s blog. Imagine for a moment those times when the clock is ticking and people are counting on you, which wire should you cut?! The red or the blue!?

Whilst most of us don’t have to deal with the life or death dilemma of diffusing a bomb, everyday situations can sometimes feel like this. The landlord is breathing down your neck, you have three ingoings to complete before tomorrow, the computer you’ve been writing your report on just crashed, you’re running late for your open for inspection – our property management dilemmas can often be just as stressful relatively.

Learning how to remain calm in times of stress will not only have immediate composed effects, it can also over time, help you lead a happier healthier life. Here are our steps to take to keep your cool when the heat is on:

• Identify the Stress – Is your heart racing because some crazy driver just cut you off? Or is it really because of the major tribunal happening tomorrow. Think for a moment, what is really bothering you?
• Choose your response – Even if you can’t change the source of your stress, you can choose how you respond to it.  The appropriate response should depend on what’s causing it, most things can be resolved. Ask yourself some questions, will this matter in a week, a month, a year? How much control do I have of the situation?
• Take Action – Face your stress source head on as soon as you’re ready. Getting stressed or sitting around worrying or procrastinating isn’t going to resolve anything. Sometimes the hardest part is just getting stuck into it, once you’re into it you’ll be far less stressed and wonder what you were so worried about. 
• Make a Plan – Sometimes resolving a situation will take several steps, or you may have several things to get done. Write out a plan with attainable goals and time for completing each task. Then, just take one step at a time and just put one foot in front of the other.  (Think about how you can plan better for next time)
• Shake it Off – If a situation is beyond your control, or if it is not that important, then no use worrying about something you can’t change. Try deep breathing, distracting yourself with something else that makes you happy, visualise relaxing things, physically remove yourself from the location of the stress.
• Become Realistic – If you continue to be stressed, perhaps you aren’t setting yourself realistic goals or timeframes for completion, or expectations with your clients. Sometimes it can be hard to accept that we can’t do everything. Reduce the expectations on yourself either from yourself or those around you and learn from your experiences.
  
  Hope you stay cool as a cucumber next time the bomb is ticking!