The top profitability strategy for rental agencies in 2025 is to increase their number of managed rentals, according to PayProp’s State of the Rental Industry report. But what are the best ways to grow your book?
In a recent PayProp Masterclass webinar, PayProp Head of Sales André van Rooyen teamed up with John Birkett, Principal Agent at Rawson Properties Claremont, to share high-impact tips for turning procurement-only services into long-term contracts. Here are the top 3.
The importance of deposits
Handling tenants’ deposits comes with a lot of legal obligations and financial administration. The money must be held separately from the agency’s business account and the landlord’s own funds, and invested in an interest-bearing account. As deposits are the tenant’s funds, they are entitled to interest earned by the end of the tenancy. The landlord or their agent also needs to be able to report on those funds on request.
Following those rules can be a tall order for landlords, but if they don’t comply, they risk not being able to use the deposit to pay for damage at the end of the tenancy. Talking through these issues with landlords at the outset, and explaining how your agency manages deposits safely and compliantly, can help them understand why they need your fully managed services.
Inspections for retention
Signing a landlord on a fully managed contract, while more lucrative than a placement-only offering, isn’t the end of the road. Birkett points out that landlords may well decide to switch to self-managing at tenancy renewal stage, when all the hard work of placing a good tenant and setting up the tenancy is done.
His preferred tactic at this point is to offer a professional interim inspection – paid for by the tenant. Inspections are a crucial part of residential rental management, but producing reports that will stand as evidence in a deposit dispute takes a lot of work and expertise. Taking that off your landlord’s hands is a clear demonstration of your irreplaceable value as an agent.
As he points out, this is also a great opportunity to convert procurement-only landlords to fully managed clients, for the same reasons.
Ongoing relationships
It’s easy to look at managed leases and procurement-only services as two completely separate things. But in practice, the lines often get blurred, and John Birkett says this is an opportunity for agents.
He says that tenants of procurement-only landlords will often still call his agency in emergencies. While he doesn’t have a contractual relationship with them, a few words of guidance to solve a tenant issue can still go a long way to convince landlords that they need full management.
“Wouldn’t it be wonderful if you get a call from a procurement-only landlord, say after the Easter weekend, because he was out of communication and the tenant had no-one else to turn to? And he says ‘thank you, I am grateful that you helped them, I’d like to hand over my property for full management.’”
This doesn’t have to be labour intensive, he says. Even just knowing a quicker way to reach the landlord can be enough. Additionally, the out-of-hours answering system at his agency includes a list of services for tenants and landlords to contact if they need a response before the office opens.
The PayProp Masterclass series brings you monthly expert advice on all things residential rentals, with guest appearances from some of SA’s top property professionals. To access our full webinar library, just visit: https://www.payprop.com/za/webinars
