A rent roll is the bread and butter of any real estate agency. It gives you the cash flow you need when sales are slow. It is also the tangible asset you rely on when you need to either expand or sell.
Growing the rent roll should be one of your top priorities as an agency owner and the best way to grow is by finding (and keeping) a great business development manager (BDM).
A few basics are often overlooked when it comes to BDMs. So, let's look at strategies to help you get the most from your team.
Implement strong incentives
Typically, BDMs receive a base salary plus additional commissions for securing new business. As there is no set formula for how an agency can structure these commissions, often they try to get creative. Keeping bonus calculations simple, however, will ensure you and your BDM can easily understand and forecast the figures.
The general consensus among the successful principals we work with is to offer a commission that is proportionate to the average annual managed income generated by the property they have signed up. This keeps your outgoings in line with revenue. It also rewards the BDM for securing premium properties.
One thing that is often not considered is rewarding your team for securing peripheral fees on their agreements - such as full-rate letting fees, administration fees or other peripheral fees your agency requires to run profitably and efficiently.
Setting and monitoring KPIs will give you a clear idea of how your BDM is performing. It allows you to forecast growth and gives them an idea of your expectations. It also motivates them to hit and even exceed your targets.
Be mindful of setting targets too low, as this might give too much away too early. On the other hand, if targets are set unrealistically high, you will quickly get your BDM offside. We advise looking into the performance of other agencies and BDMs to find a structure that can fit your business.
Feed them leads!
A BDM is not there for lead generation or marketing. They are salespeople and converting leads is the best use of their time. Develop peripheral marketing strategies to ensure they have a consistent supply of fresh leads. Sales enquiries are a gold mine of prospective landlord clients, so that's a great place to start.