Property Management- Room for Improvement

[SDooley]

Have set up newly formed Real Estate Company (husb/wife team) operating from Bayside, Melbourne.
Licensed Agent -many years in Residential/Commercial -Sales/Management.
Any suggestions/feedback on what P-Management is lacking and or requires would be great...
Also setting up services for self managed (diy) landlords (which is where I stumbled on this site) Any thoughts?..

 

[Dazz]

How's the revenue for managing residential IPs compared with selling commercial properties. ??

I gather it's better otherwise you wouldn't of changed ??

 

[Xenia]

Hi Dooley,

congratulations on making the move. I don't think it is an easy business model achieve. It's been a very challenging and rewarding business for us but by no means static.

Leases are forever being updated to account for current legislation. PM services are constantly revewed and improved, property managers are continually trained and re-trained. Our aim is to be THE BEST and there is alot of constant improvement in that.

My biggest advice to you is don't do sales, you either do sales right or do property management right, there are too many variables in property management and you cannot afford to dilute your focus if you are going to get it right.

There are a lot of ways around legislation and wording to better protect landlords, DIY leases just don't cut it, don't bother. You need the right people to constantly be on the ball.

If you want a good working business model, offer a good service not a cheap service, you get a reputation for being cutting edge or you get a reputation for being cheap, you are either a back yarder or a professional whatever you end up being branded for is what you will attract. Most rent rolls are run at a loss (sadly) and the only way to make a profit is to sell the roll or to turn those listings to sales commissions, it also results in under staffing and property management burnout and really bad service. There are enough bad services out there to give the industry a bad name we don't need to ad to it. Just look at this forum and the attitude towards property management. Cheap fees are the cause of that.

Also you need to choose your market at the begining and stick to that. Our market is sophisticated investors, wealthy investors value their time and value good service. DIY landlords value saving money, it is a totally different market. you need to be willing to let go of business that does not fit your working model. We screen landlords just as we do tenants.

Finally, get a good coach and make it happen. Check out my website www.adprop.com.au everything is automated for tenants and landlords. We went from 0 to 7 staff members within 3 years.

Hope that helps and all the very best.

X

 

[SDooley]

How's the revenue for managing residential IPs compared with selling commercial properties. ??

I gather it's better otherwise you wouldn't of changed ??

Revenue is significantly less and hours generally longer for IP management, however the decision is location/family based and difficult to commence commercial without large advertising budgets and/or brand recognition.

 

[SDooley]

Hi Dooley,

congratulations on making the move. I don't think it is an easy business model achieve. It's been a very challenging and rewarding business for us but by no means static.

Leases are forever being updated to account for current legislation. PM services are constantly revewed and improved, property managers are continually trained and re-trained. Our aim is to be THE BEST and there is alot of constant improvement in that.

My biggest advice to you is don't do sales, you either do sales right or do property management right, there are too many variables in property management and you cannot afford to dilute your focus if you are going to get it right.

There are a lot of ways around legislation and wording to better protect landlords, DIY leases just don't cut it, don't bother. You need the right people to constantly be on the ball.

If you want a good working business model, offer a good service not a cheap service, you get a reputation for being cutting edge or you get a reputation for being cheap, you are either a back yarder or a professional whatever you end up being branded for is what you will attract. Most rent rolls are run at a loss (sadly) and the only way to make a profit is to sell the roll or to turn those listings to sales commissions, it also results in under staffing and property management burnout and really bad service. There are enough bad services out there to give the industry a bad name we don't need to ad to it. Just look at this forum and the attitude towards property management. Cheap fees are the cause of that.

Also you need to choose your market at the begining and stick to that. Our market is sophisticated investors, wealthy investors value their time and value good service. DIY landlords value saving money, it is a totally different market. you need to be willing to let go of business that does not fit your working model. We screen landlords just as we do tenants.

Finally, get a good coach and make it happen. Check out my website www.adprop.com.au everything is automated for tenants and landlords. We went from 0 to 7 staff members within 3 years.

Hope that helps and all the very best.

X

Thanks for the detailed reply Xenia. Very good advice.
Checked out your website and it looks great.
You're correct about the bad service I also have a couple of properties managed by other agents (not for long) and never know what to expect at month end in the way of disbursements as maintenance etc never correctly relayed (price)
I guess any PM business that does the opposite to the norm (return calls/personally attend maint/rent reviews) should do well but the stigma attached to agents is the first barrier

 

[wylie]

There are enough bad services out there to give the industry a bad name we don't need to ad to it. Just look at this forum and the attitude towards property management. Cheap fees are the cause of that.

Which comes first, the chicken or the egg?

DIY landlords value saving money, it is a totally different market.

I think your whole post was really good Xenia, but I do object to being lumped in as a DIY landlord who values saving money, as if saving a dollar here and there is my main reason for doing so.

I am a DIY landlord for two reasons, only one of which is that I am saving money. The major reason is that, as clearly evident by the constant posts about slack PMs, by doing it myself, I keep a very tight rein on what is happening to our houses, we meet the tenants and gauge them ourselves, and simply because I am in control and not waiting until the end of the month to find out how much money we have this month or to see that a big chunk has gone on repairs which we could have done ourselves, or that the tenant actually left six weeks ago, but we have only just found out now.

These stories are common here, and this is but a tiny proportion of landlords so I imagine the stories not here on SS are no different.

Self managing for us has really very little to do with saving money, but so much more about the fact that we just do a better job looking after our own asset than some 20 year old stranger who has 300 other houses to look after.

Other than that comment, I think your business sounds like one of the (possibly) rare very good ones.

 

[JustRent]

Hi all,

An interesting thread.

There certainly is a stigma attached to property managers, and this is probably justified on the whole. Most companies tend to have the property management side of the business as a means of keeping a potential sales list. There is a general lack of effort and energy actually put into the management of properties and an over emphasis on the sales side of the business.

Congratulations on your push towards breaking this stigma. I would recommend talking to some of your owners and asking them exactly what they would expect and desire from their property manager.

Good luck.

 

[RumpledElf]

Come set up business in our area.

There's a shocking lack of property managers. Most landlords self manage - those few that don't get the PM in from Ray White in Clare, which is 70km south of us and a solid 110km away from the town north of here which has a lot of rentals. I don't know how they can do it, PMing from such a distance away. The local handyman they get to do all the maintainence work complains he has to fix broken windows every other week and he HATES fixing broken windows

I'll be self-managing if I can't sell my house.

 

[Dazz]

Revenue is significantly less and hours generally longer for IP management

Thought so. Cheers.

 

[Dazz]

I would recommend talking to some of your owners and asking them exactly what they would expect and desire from their property manager.

If I had a business model which espoused chucking out the high problem stuff and only keeping the high paying nothing to do props.....I probably wouldn't go asking this questions of the Landlords.

You'll probably get answers like "What I'd like to see is a whole bunch more attention paid to my property management cos it's rubbish at the moment, plenty more paperwork and verification - we get bugger all at present, oh, and your fees are way too high...chop them in half or I walk, and I'll tell all of my Landlord mates to do the same if you don't do it pronto."

 

[buzzlightyear]

Here's some suggestions

1. Online system to retrieve all your statements, quotes and other official correspodence.

2. Agreed SLA's & turnaround times in responding to queries from
* landlord by property manager
* tenant by property manager
* property manager to tradespeople for typical requests (eg basic plumbing, electrical, general handyman)

3. KPI's and measurement of vacancy for each property or property types or property portfolio (reports to landlord)

4. Standard process prior to end of lease (at least 75 days) to establish whether tenants are staying, going and whether you can or should increase the rent with appropriate communication and correspondence. All in time for the start of the new lease period.

3. Benchmarking information about comparable rents available (reports available to landlord which)

4. Available to contact assigned property manager or alternative contact during normal business hours Monday to Friday and Saturday for half a day.

 

[Xenia]

Thanks Buzz

we are working on an online system for landlords to retrieve statements right now. Infact overhauling our entire website.

We are working on a system that emails inspection results directly back to the office from property managers on the road, and directly back to the landlords. That way things don't get forgotten.

Having our own handymen (4 of them now) with a representative in our office has been a great help towards service improvement.

I find that every week there is constant improvement, it is by no means a static business model and certainly not an easy business to begin and maintain. It's a matter of defining the flaws and designing a system to overcome them.

.....Until the next market cycle where new flaws come into play.... That's why I believe it's important to not lose focus and dilute the systems with sales.

Having a business that deals with property investors however is one of the most ideal businesses to have.

I am involved in many joint venture projects and different opportunities with some of my clients. I'm also mentored by some, I have one client working on $800 million dollar developments, and I mentor others to achieve a greater success. It's fun and once the systems are running it absolutely is a fantastic business to own.

all the best PMs!

 

[JustRent]

Congratulations Xenia,

Your website looks great, and your company is helping with this move to improve the services provided by property management companies.
We have also initiated online statements and owners love it, it is much more efficient and tidy way of presenting their statements.

Other advancement that perhaps you may want to look at are - using social media to increase your properties exposure (eg facebook, twitter), rewards programs for loyal clients and guaranteeing your services

Good luck

 

[Xenia]

Hi Just Rent,

Great stuff, I travel quite a bit interstate, perhaps we can have a chat next time I'm in Sydney (on Darling Harbour over a latte off course ) and likewise if you are ever in Adelaide.

X

 

[JustRent]

Great, sounds good.
We seem to have similar ideas on how to run a property management agency. Look forward to exchanging some more ideas.

 

[Crystalleez]

Congrats on the start-up.

I have little experience in the field but am looking to broaden my horizons as you have with your husband/wife team.

I see a demand in my area of interest for professional PMs without that cheap focus on costs. You mention an Estate License, I was wondering if you may be able to help me out here... What exactly is required by law and not just 'recommended' to establish your own business in managing properties.

From a personal perspective I agree with most replies in saying that a service that focuses on delivery over price will always come out on top.

With Thanks