Property Management

Is Your Rent Roll Underperforming? 7 Signs It's Time for a Checkup

Published 2nd June 2023Updated 6th June 2023

real estate agency principal thinking about rent roll performance

A flourishing rent roll is the lifeblood of property management. It keeps the cash flowing and the tension at bay. But just like any well-oiled machine, it's essential to give your rent roll a regular performance check to guarantee it's firing on all cylinders. 

We're going to dive into seven key indicators that may suggest your rent roll is in need of a little TLC. By catching these issues early on, you can reduce costs, strengthen revenue and streamline operations in the long run.

Sign #1: Vacancy rates on the rise

Picture this: more empty properties than a ghost town. If you've noticed a sudden surge in vacancies on your rent roll, it's time to investigate. High vacancy rates can put a damper on your revenue streams and may indicate problems with tenant retention, pricing strategy, or marketing efforts. 

You need to dig deep and figure out what's causing the exodus. By analysing the root of the problem, you can make the necessary tweaks to reduce vacancies and keep those properties occupied. 

Expert Tip: Once you've identified the underlying issues, you need to act fast - solutions will take time to implement. For instance, if you're experiencing tenants leaving after their initial leasing period, you may need to assess your pricing strategy or make changes to your customer service. Implement a plan and monitor progress closely, taking corrective action if needed. You may also need to adjust your marketing strategies to attract more tenants.

Sign #2: Falling rental yields

Rental yields: the proverbial ‘financial backbone’ of your rent roll. If you're experiencing a downward trend in your rental returns, don't panic! Falling rental yields can be a result of new government regulations or any number of natural, social and economic factors. But it can also be caused by outdated valuations, rent stagnation, or underperforming lease management. 

Take a step back and assess your approach. Start by checking your market data and comparables. Evaluate your pricing structure and explore alternative strategies. For example, consider offering competitive rental rates for longer-term leases that would incentivise tenants to commit to extended periods.

Expert Tip: Make sure you're proactive when it comes to rent reviews, and don't forget to look into the latest tenancy legislation to keep your lease management on point. Let's get those yields back on the upswing!

Sign #3: Inaccuracies in rent roll data

If you’re dealing with inaccuracies in your rent roll, it’s like playing a high-stakes game of rent-roll-roulette that can land your agency in financial and legal complications. 

Conducting a rent roll performance check allows you to identify and correct any inaccuracies promptly. By diligently managing lease renewals, maintaining accurate tenant records, and ensuring proper security deposit management, you can minimise risks and optimise your property management operations.

Expert Tip: Adopt tech to help capture key rent roll metrics and automate reporting processes. By leveraging technology and automation, your team can easily track and act on the most important rent roll metrics, maximising resources and optimising time management.

Sign #4: Increasing arrears and late payments

Late rent payments and tenants in arrears can turn your cash flow into a rollercoaster ride. But if you're seeing a worrisome rise in arrears, it might be a sign that your tenant screening process needs a facelift or that your rent collection and communication systems need a little fine-tuning. 

Strengthen your screening protocols, revamp rent collection methods, and develop clear lines of communication. Establishing an effective system will help you stay on top of any late payments and reduce the risk of arrears. It can also help you create trust with your clients and build a healthy relationship.

Expert Tip: Make sure to remain flexible and understanding with tenants who are experiencing financial difficulty. Offer alternative payment plans and provide resources to help tenants in need. Finally, keep a record of all interactions for future reference. Automating rent collection can also help simplify the process by auto-alerting tenants when their rent dues are nearing or overdue and saving time on administrative tasks.

Sign #5: Slow maintenance and repairs

Maintenance issues and repairs that move at a snail's pace can turn even the happiest tenant into one who will churn when lease renewals come around. Regular inspections and preventative maintenance plans can help you identify problems before they become major issues. 

Develop a system to track maintenance requests and document completed work. Offering a tenant portal and maintenance request system can speed up the process and make sure requests are handled on time. Keep your tenants smiling!

Expert Tip: Invest in property maintenance software to track and manage all maintenance requests from tenants. This will help you stay organized and quickly respond to any issue. Outsourcing some of the maintenance tasks can be a quick way to increase efficiency and reduce costs.

Sign #6: Operational inefficiencies and manual processes

Do you often feel like you're swimming against the tide with outdated systems and piles of paperwork? We feel your pain. Manual processes and operational inefficiencies can drain your team’s time and energy faster than a leaky faucet. It might be time for a tech upgrade! 

Proptech is helping streamline operations, reduce paperwork, and increase efficiency. Automation can also free up time for employees to focus on more complex tasks and help your business stay competitive and innovative. Work smarter, not harder!

Expert Tip: Select a solution that integrates with existing systems and tools. Look for customisable or tailor-made options that combine people and tech solutions. Set up a trial period to test the features and ask your team for feedback to ensure the system you choose meets everyone's needs.

Sign #7: Lack of scalability

A rent roll that lacks scalability will add a roadblock to the growth of your property management agency. A performance check can highlight areas for improvement, enabling you to implement efficient management practices, leverage new technology, and expand your property portfolio strategically. 

For instance, outdated processes can be identified and replaced with modern cloud-based systems to help automate and streamline manual tasks, freeing up time to focus on more productive work. You can also use the performance check data to measure your team's performance and pinpoint any areas of potential improvement.

Expert Tip: To ensure the most accurate data, set key performance indicators (KPIs) tailored to the tasks and goals of your team. That way, you have a clear understanding of where your team is excelling and what areas need attention.

What do these signs mean when doing rent roll due diligence?

Regularly assessing the performance of your rent roll is vital for long-term success in the property management industry. By paying attention to the signs, you can identify potential underperformance and take proactive steps to optimize your rent roll's revenue and streamline operations. 

At :Different, we understand the importance of your rent roll’s health, and we're here to support you. Sign up for our free rent roll performance check, and let our experts unlock the full potential of your rent roll.

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Disclaimer: The information provided on this blog is for general informational purposes only. All information is provided in good faith; however, we do not account for specific situations, facts or circumstances. As such, we make no representation or warranty of any kind whatsoever, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information presented.

This blog may also contain links to other sites or content belonging to or originating from third parties. We do not investigate or monitor such external links for accuracy, adequacy, validity, reliability, availability or completeness, and therefore, we shall not be liable and/or held responsible for any information contained therein.

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