Property Managers, do you find yourself in a constant dilemma with the ever changing rules, legislation, tribunal challenges, customer service expectations, return on investment, operational issues plus much more?
Recently I hosted a panel of 5 leading professionals in conjunction with Elite Property Manager to answer some of the issues you are faced with on a daily basis and how to deal with them effectively.
Videoed in the Console Brisbane office, the featured panelists were:
- Karen George from Richardson & Wrench Caboolture
- Laura Valenti from Solutions Property
- Michael Papantoniou from List Property
- Jess Kindt from Place
- Troy Woodward from Jeff Jones
Fiona McEachran: How has the landscape of PM changed in recent times?
LV: I believe that there are more specialist property management companies appearing in the industry, as opposed to the traditional sales-plus-property-management type of offices. I think this is not only because of the demand for a more specialised service, but also due to increased legislation leading to more challenges in certain areas of the industry.
MP: I agree; there are a lot of boutique agencies now just focusing on property management and there are a few agencies that don’t want to deal with the property management side at all due to the legislative burden.
JK: It’s not just specialised property management companies, but also specialised positions within those companies now. Once upon a time you had a property manager who would take care of your letting and be your first point of call as a new client, and he or she would take care of your maintenance.
Now that the legislative requirements have increased, we’ve had no other choice but to divide all those tasks up, so that property managers are now taking care of the property (and legislation); you’ve got BDMs taking care of new clients, you’ve got leasing consultants out there and also there are lots of offices that have assistants helping out the various roles. On the whole, it actually feels like managements per property are decreasing to handle the increased workload from legislative requirements.
KG: I think the other part flowing on from that is education. We spend a lot of time and effort in educating ourselves to make sure that staff are well informed so that they can deliver that service. Because there is new legislation, and because our business is changing, you really need to invest in your team.
JK: And you can’t ‘fluff it’ now, either. There is too much access to information and everybody has online access to everything. Gone are the days when you could have someone on the team who wasn’t aware of all the legislation. I look back and in 2003, when I started, I didn’t have a lot of experience or training; but I still did my job well because of the customer service factor. Now it’s gone in a completely different direction.
FM: How has this changed the role of the principal in the office?
LV: I’m not sure how a sales-focused principal could manage a property management department, for the reasons we’ve just been talking about. They would need to have a very, very reliable manager for that part of the business. I sign-off on the trust account balance sheet every day. I know exactly what’s happening, and would be very scared if I didn’t!
MP: From a principal’s point of view, there is a lot more on us. I manage both sides, sales and rent roll. Knowing what your staff are doing in both sections is important, but it takes more effort to manage the PM side of the business because that is where the majority of the compliance aspects are.
LV: And a lot more risk, as well.
FM: With these changes are you trying anything new in terms of management processes, or in terms of marketing or presenting yourselves?
TW: Safety is a big issue. We are looking at ways to assist landlords in becoming aware of safety issues in properties, and we look to partner with other companies that can help and make owners aware of these issues too.
JK: I agree with Troy. In our area there is some business we just don’t take on, because the property is not in a condition that we think we can successfully manage professionally. And I think you have to be honest. You have to be able to say to those clients that the property needs work. If they are not willing to do that, then it’s not a relationship we should enter into.
FM: What are the trends with respect to management fees – have they increased or decreased?
LV: Ours have increased, dramatically actually. But our overheads have increased too. We do educate our new owners and advise them of this because we need to assure them that they’ve got the very best working for them and their property. And why wouldn’t they pay? We use a common analogy: you’re not going to buy a BMW for the price of a Barina.
We also charge for additional routine inspections if it’s more than three. I remember, 10 years ago, inspections were just a simple report; but now everyone wants photos and some expect videos. Someone has got to pay for that. We also invest in software so that we can go out and do these inspections on our mobiles.
MP: I think with commissions you can charge the proportionate commission to the value that you are adding. And you have to educate the owners, because a lot of the time they don’t understand what we do.
TW: There are risks associated with going with that cheap option, as there is in everything in life…
MP: And the risks are quite large in some companies. I’ve heard of owners being without rent for six months because their properties weren’t leased or the tenants weren’t paying. So yes, educating owners on all these aspects is important.
FM: What are the best ways to go about educating owners?
LV: I think it starts at the sign-up process; there are a lot of companies that are hiring BDMs to take care of this. But the BDM also needs to have experience. We don’t promise anything that we know we’re not going to deliver, or anything that is not in line with the legislation.
MP: You must have a great relationship with the owner and that starts with the property manager; the owner having trust and confidence in what they say is a very important step. Good communication skills are essential to deliver the right messages.
JK: We have developed other methods, because in a city market we have had to adapt to the fact that face-to-face is starting to become less frequent. Even people that are local are time poor, so we put together something electronic that is informative, covers us as an agency but is also attractive to the client. But it’s a whole marketing mix that comes into play.
KG: It has to be flexible for every property. We still meet most of our owners face-to-face. They still walk into my office, trust my family who have been there for 21 years and say, ‘Here’s my property. Look after it as though it’s your own.’ They know our systems are in place. I think there is a wrong perception out there that investors, even interstate or overseas investors, only want to know about the numbers. They don’t. If they were all about the numbers, they wouldn’t have a property manager; they would just collect the rent.
FM: Task or portfolio? Which is better?
LV: We do part task and part portfolio; we have property managers who take care of the main tasks, like list renewals and inspections – they have the main communication with the owner. We have a dedicated leasing consultant who just shows the properties and finds tenants. Our office manager chases the rent and does disbursements. That set-up works for us.
TW: We are portfolio-based, and our managers are the single point of contact. We also have a dedicated leasing team, a dedicated trust team and a dedicated business development team. So we are split up into different areas but have a single point of contact for owners and tenants.
MP: The owner generally only wants to contact one person, and that one person should know everything about their property – or at least come back to them with the information.
LV: It’s just crazy to expect one person to know how to market and take beautiful photos and inspect a property and be the best person to chase the rent. One person can’t usually do all that!
FM: What are the biggest challenges you are facing right now?
KG: Our biggest challenge is definitely technology, and keeping up. Technology, for us, is really important to make sure that we are abreast of new information and new ways of doing things.
JK: I think it’s the opposite for us. We’ve invested so much in the last eight to ten years in brand new technology. My greatest challenge, at the moment, is actually taking us back a step and going back to customer service, because I think that that’s really what’s going to succeed in the industry. At the moment, I think, it’s very easy for people to jump on board with these cool apps and technology, SMS and email; but I don’t want our staff being complacent or reliant on or hiding behind text messages, emails and apps. I want them to deliver service, because without that we will lose business.
FM: What do you think is in store for the future?
MP: I think it’s a mix of both customer service and technology. Technology, currently, is growing rapidly. When you look at the portals and other aspects – for example, VPA on the sales side of things – perhaps we will start to see more property management companies looking for paid advertising for rental properties?
LV: I’d like property management to be more professional. I don’t want to see someone do a five-day course with one day of that being property management; how to fill out a Form 6 and here you go, there’s your million dollar, billion dollar portfolio, go and manage it. We have to provide all the training from the beginning, which is fine. It just drives me crazy when you see other agencies and you know their staff are not trained and the principal doesn’t mind what happens in the property management department. It makes us all look really unprofessional. A good property manager is such a capable person. We do anything and we need to be recognised for that, including being paid what we are worth!
This article was originally published in the first edition of Elite Property Management