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The Top 5 KPIs to Survey for Landlords
Posted on 19th April 2017 in KPIs
Written by Freya Hughes
An industry with a considerable amount of variables, real estate naturally has a lot of KPIs to monitor. Divide up your residential and commercial properties and allocate these, and any other, important KPIs to each. This will help you understand the direction you’re taking and start raising the roof financially.
Revenue growth should top any KPIs list, but we’re hoping at this point you’re aware that it’s imperative! It’s certainly worth noting that some real estate moguls will overlook revenue growth to an extent, focusing more the factors that should bring in revenue in theory, but might not in practice. The following KPIs, if executed well, will all tie together to increase revenue in general. So let’s review what will really move the needle.
1. Properties lost and won
Without monitoring this KPI, you won’t know if you’re coming or going. It’s an effective indicator of how your business measures up in the industry, against local and/or national competitors. But be aware, the more properties on the books doesn’t necessarily mean the better. You need to be clear on which properties are staying or leaving. It’s essentially stock control. If you’re losing them, why? Potential landlords or sellers have no loyalties so will go elsewhere if it seems easier, or a better service is available.
If you’re running both sales and lettings services under one roof, use those sub categories to stay organised. Then you can compare them at intervals to see where the most revenue is coming from in your business, and which areas might need more attention. Problem areas will be easy to spot if the figures are tightly monitored.
Make this a headline Key Predictive Indicator for the business. Get everyone in your business obsessed by it so it keeps ticking over at a steady rate.
2. Vacancies and occupancies
If your data is telling you a given property has more vacancies than occupancies, you need to do something about it. Measuring this KPI allows you to see how well your managed properties are doing. There’s no point keeping a property on your system if you can’t fill it. It might result in the loss of faith from the landlord or seller. If you cannot find a long term let or sale, it might be worth advising renovation or auction. Get a handle on your rental durations here.
It’s to be expected to have a handful of tenants in arrears. Payments from sales won’t always clear immediately either, especially if there are external parties involved. But you must be measuring what proportion of your customers are, and by how long. Not monitoring this closely could easily result you losing out on cash. There are a few factors which can contribute to this, for example improper screening of prospective tenants/buyers, or an over-worked property manager. You need to invest in somebody to watch these figures on your behalf if you can’t do it yourself. A simple error in the logging of your arrears can have a huge impact on your financial state, so ensure the person in charge of this is experienced and/or trained thoroughly. Find out more here.
4. Price reviews
Conducting price reviews is a surefire way of increasing your (and if you have them, your landlords/owners’) profits. Keep a close eye on your competitors’ prices – average them out for a benchmark figure to work from. Don’t overcharge though, even in larger cities news can travel fast and you don’t want to be known as the overly expensive agents. It’s easy to overlook reviews as staff are often so focused on winning new properties, or preventing arrears. Keep it in mind and you’ll stay ahead of the game. Calculate your revenue per rental here to see if you’re due to review.
5. Tenant/buyer satisfaction
As mentioned above, people talk. If you’re not ensuring your customers are happy with your services, then expect news to spread. Many of us have experienced shoddy management from lettings and residential sales managers. Just as people won’t forget incompetence, they’ll remember conscientious managing agents. Ask customers to provide you with a feedback review. Even if the results aren’t as positive as you’d hoped, you can use this as a learning curve and implement changes where needed. Improvements in your properties and services will naturally develop into a higher volume of prospective and active tenancies/sales, and in turn an increase in revenue. Find out more with FUTRLI.