Dean Yeo from Real Estate Dynamics joins the Soho Carpool series to talk Rent Roll and how to maximise profitability.
Dean Yeo, thanks so much for joining the Carpool series with Soho. You finally made it. Welcome! Thank you very much. Let's talk rent rolls. I mean, it's kind of right up your alley. Let's just do a practical example. Let's say I own a small agency. I got my sales business kind of running. I haven't paid too much attention to my rent roll. It’s at, you know, 50-100, whatever that may be. Maybe I want to exit in 5 or 10 years time. What do I do now? What advice do you have around my agency, my business and how to get the most out of my business or my rent roll? Sure. First is know your numbers. I bang on about four numbers. Need to know how many are currently… so how many managements you currently have and what are they producing? You need to know what your average weekly rent is across your rent roll. Your average management fee. And then what have you taken in extra fees over the last 12 months. If I walked into an agency and you knew those things to start with then you're probably in the top 10% of agencies. Secondly, you need to make it profitable. So you've worked hard. You've got it from 0-100 or 0-150 You still…you've made nothing from that. You’ve just basically bought yourself a job or you bought, you know, some other property managers a job. You need to get it up 300-500 to be able to actually make some decent money out of it. You also need to know what your password and login of your rent roll is so that you can get in there and get amongst it. You don't need to be an expert in the software. But you need to know what those numbers are. Yeah, gotcha. If you are currently in a building, try to buy it as far as so that you're paying, you know, like that one of the ones we saw recently so, you know, his accountant turn around and said ’You know, in the next five years, you'll pay a million dollars, you know, and why don't you go out and buy it instead?’ And he's like, ‘Okay.’ So when I go in to have a look at them, that one of the things is, do you own the building that you're in? do you have a rent roll? and then they'll have a sales business, and the sales business could be up and down. Yeah. And at the end of the day what we look at is that the asset is basically your rent roll. Because your rent roll, the banks will earn money on it, people want to buy it and it is a consistency of income. And that's what the bank will then turn around and standard lend you 60% on that. And so if you own a rent roll and you've got all that infrastructure in place, you could drop another hundred into that, maybe one more head count of people and it’ll look a lot more profitable because you haven't had to add, you know more overheads in general. So usually when they buy them they can turn around and say, ’Okay, well I can pay it off probably in five years. And it's also an asset of which is increasing in value over that period of time as well.’ Yeah, gotcha. So really you've done the hard yards. Now make it pay so that you can actually make some profit. Let's say I am an agency owner. I've got a rent roll of ‘X’, you know, 100, 150. I want some, I guess more advice. How do I get in contact with you? What's the best way? Just search me anywhere through the social. Yeah, just bring up Dean Yeo and just reach out to any of the social stuff. I'm happy to answer any questions nationally. Dean, thanks so much for joining the Carpool series with Soho. You're welcome. Cheers.