Your Pay Your Way™ attracts agents who want to build a scalable and sustainable business in a way that rewards the broker owner for their efforts. It sets standards of service and production for agents and sets the bar high enough to be a challenge. It is flexible enough to accommodate high producers without compromising the integrity of the strategy. It is the primary income stream for most franchisees.
While it is never a good idea for the broker to be in competition with his or her agents, there is nothing wrong with a broker cultivating their own book of business.
Another revenue stream that few brokers take advantage of is property management. As a stand-alone department, it is not necessarily a great profit generator. However, revenue from this service covers a significant amount of general office overhead throughout the year, making ongoing marketing and agent support investments sustainable. And, as Chris discussed earlier, the relationships we have with our owner clients who continue to buy additional properties generate additional commission income to the brokerage.
In Chris’s Springfield office, the average rent per unit $550 and the average sale hovers between one hundred and $120,000. The revenue generated managing a little over 700 units for 150 or so owners comes to about 25% of total office revenue. It is the perfect mix. That is why Chris refer to property management as the 25% Solution.
The Self-Managing Brokerage broker training program has a complete section devoted to starting and building a property management department. We have developed methods and processes that make the business manageable. We currently look after 1200+ units amongst all our offices with a dedicated accounting firm specializing in property management and the AppFolio platform to handle our accounts payable and monthly reconciliations.
We address the payroll / productivity issue by first creating detailed job descriptions for every team member on each team. (An example job description for the Agent Service Manager is included in Part #2 of this book.) From there we document the behaviors of previously successful team members, and hire accordingly. There are a few more steps to the process that we teach in The Self-Managing Real Estate Brokerage™ training program, but that is the gist of our method.
We also influence expenses by building partnerships with vendors that know us and understand our business. For instance, our printing partners have built a website for us designed to facilitate personalizing and ordering printed material such as business cards and brochures. Our sign company does the same. Our website and internet partners are set up to expand with us and our broker owner partners well into the future at costs we can plan for and count on. We only work with vendors that offer us the greatest value for our money.
Next week, The Broker Owner Experience: Marketing with Mindset Scorecards