The G$ System: Maximizing Your Rental Business

Part 1    “Tracking & Closing Ratio”

Behavioral scientists have proven that the “act of keeping score” improves performance. Quite simply rental agents should keep track of what they actually do. Every agent should track basic actions such as the number of new prospects they work, the number of properties they show, their total number of appointments, the percentage of people they take out more than once and of course the number of closed transactions. This data must be recorded so that performance can be analyzed and of course it is a fundamental principle of good business. I believe that anything that can be measured can be improved.

“Closing Ratio” can be defined as “Closed Transactions divided by Prospects Worked”. For example: 20 transactions divided by 100 prospects equals a 20% “Closing Ratio” whereas 35 deals divided by 100 prospects equals a 35% success rate. Agents that have the discipline to track their closing ratio will also work to improve the number. It is not unusual for me to sit with an agent that is closing 10% of their prospects or one deal per every ten people. If I can make the agent aware of their “Closing Ratio” and get them to start “tracking” what they are doing their performance will almost always immediately start to improve.

In this series, I am going to give you many tips on improving “Closing Ratio”. The first tip is obvious “Keep Score!” By keeping track of the number of deals you do out of the total number of people that you work with your success percentage or “Closing Ratio” will begin to improve. “Tracking” or recording the number of people that you actually take out and show property to is vital. I can’t tell you how many times I have sat with an agent and asked “How many people did you take out last month?” and the answer is “I don’t know” or “Not enough”.

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Interview Published by RentJuice

This week, we spoke with Greg Young of Broker Heaven in New York to help agents and brokers get a better idea of how they can succeed in the rental industry. Broker Heaven is a company dedicated to helping real estate agents reach their potential and maximize business. Read ahead and get Greg’s advice on how you can overcome the challenges of getting into rentals and excel in leasing.

Why should brokers and agents be doing rentals?

Greg: Getting into rentals is an obvious thing for sales agents. Those who aren’t doing rentals are being shortsighted, since leasing provides supplemental income. Rentals move much faster than sales, so renting property gives agents quick money, but the real value is in meeting more people. Real Estate is all about meeting people – renters you meet this year are possible buyers in the future.

There are two main reasons agents should get into rentals. First, it helps pay their bills. The second reason, which is far more valuable, is building relationships with human beings they didn’t know before. It’s all about expanding your social sphere of influence: by meeting more people and finding them a rental you’re building relationships. These connections can later source business next year for renting or buying and in addition everyone you meet is source for referrals.

What are the challenges you find brokers have when getting into rentals?

The biggest challenge is psychological. Agents have to want to rent property. Selling is more lucrative but renting will help build their career and ultimately help them sell more property.

For example, an agent has a client in the Hamptons, which has a very robust summer rental market. Most sales agents don’t want to bother renting a house for two to three months and making a small fee. They’d rather sell a house for 5 million, but this strategy is shortsighted. Many potential buyers rent for a year or two before deciding they want to buy. This is similar in Miami’s South Beach or other resort areas, where people will rent before they decide they want to buy a permanent place.

How do you think brokers can make the transition into rentals a little bit easier?

It’s all about education, training, and inventory. A large part of making it in rentals is selling agents on wanting to do it. Most will groan initially and be resistant until they’re educated. Rentals are different from sales, so you need to educate agents on the mechanics of doing rentals, as well as the business side of leasing. In order to succeed in rentals, you also need to have inventory. A huge obstacle in New York is getting access to inventory, so having a rental network can definitely help you succeed.

What is a common mistake you see brokers make?

Taking a shortsighted approach and thinking about a quick buck as opposed to a relationship with a human being. For example, an agent will go out and show 3 of the best rental properties out there, and ask the renter immediately after which they want. The average New York renter will see 15 properties, so that approach doesn’t work.

Many agents don’t want to do things that don’t have immediate gratification. They need to listen, get to know the renter’s needs, and show them enough properties. The best agents understand that the relationship with a person has much more value than a single rental deal. This is the single most common error.

Another common mistake is lack of product knowledge. Often, agents in their first year of doing rentals face a vast inventory. Agents who don’t get good training risk going with the tour guide approach. Usually, agents will go out every weekend and see the listed apartments. An agent that’s new to rentals should zero in on a neighborhood and focus on something they can make their specialty – they’ll be much more likely to make money the first year out.

How can brokers maximize their business and close more rentals?

Have a balance of both rental and sales. Think of yourself as a real estate professional: your job description is to find people homes that make them happy. More and more people in the country are renting now as opposed to buying for all kinds of factors. Instead of saying there are “not enough sales”, focus on finding people homes. Be confident, give great service, find your clients a place to live, stay in contact, and one day you’ll be the one to find them a home. It doesn’t matter if they’re renting or buying. Housing is a basic human need. In the end, they have to live somewhere. Focus on that.

 

About Greg Young: Greg Young is the owner and President of Broker Heaven, a real estate training and consulting firm located in Manhattan devoted to helping agents and companies reach their full potential. Greg has trained thousands of agents over his 30 year career and has created numerous rental and sales training programs.

Persistance

Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated failures. Persistence and determination alone are omnipotent. Calvin Coolidge

Character

Weakness of attitude becomes weakness of character. Albert Einstein

Mindset

Why do half my clients collect 15% effortlessly and the other half struggle to collect a one month fee? I have to believe it’s all mindset.

Fundamental

If they have to move, keep showing them until they rent, buy or move to Jersey! G$

“Discipline”

Talking with agents yesterday Amazing how many of them can’t get up in the morning and go to work. Show up and the business will reward you!