The Cost of Inefficiency in Property Management

Bob Walters cropped

An article by Bob Walters.

Time is your most valuable asset, and how well you use it has a key bearing on how you perform. By analysing how you spend your time, you can begin to make changes that will ensure you get the most from your working day.

You might think that most of your time is spent doing useful things, but if you were to keep a detailed time-log, you would probably be surprised at the number of superfluous activities.

It is easy to spend too much time on routine matters, such as reading (and forwarding) joke emails, at the expense of high priority, productive tasks. Look at how you divide your day at the moment; do you prioritise your work so that you tackle important, urgent activities first...or do you complete enjoyable, easy tasks first. Do you waste a lot of time???

The majority of your tasks can be divided into three groups:

1. One-off tasks, such as correspondence 2. Planning and development, such as prospecting 3. Routine tasks, such as rental arrears, repairs, tenancy inspections

To be most effective in your job, you should be spending about 60 percent of your time on important routine tasks, 25 percent on planning and development and 15 percent on one-off tasks. If like most property managers, you allocate your time almost the opposite...and often avoid planning and development all together.

It is amazing how many businesses I see when I am consulting where the property manager has not been chasing the arrears, the tenancy inspections are not up to date AND the repairs are out of control...and the property manager is stressed out!

So tell me, where does the time go???

Write down what you are doing every 15 minutes, next to it indicate:

· Was it work related?

· Was it important/priority?

· Was it dollar productive?

· Is there a more efficient way?

Reorganise your working day so that you are able to work more consistently, efficiently and achieve more. You might find that there are some activities that are taking up a lot of your time that you could be charging clients for.

Recently I met with an experienced property manager; she managed 70 properties and was stressed out, but why I asked. We went over the systems and procedures in the office – she knew what to do.

The time log, told a more in depth story; this property manager had decided to "upgrade" the properties she was managing. While doing her tenancy inspections, she was recommending to owners to maintain, upgrade and improve their properties, new paint, carpet, kitchens, bathrooms etc

Fantastic! Higher rents, better quality properties and tenants; She was arranging quotes, meeting the tradespeople at the properties, selecting samples, liaising with the tenants and owners – backwards and forwards...renovations are very time consuming, no wonder she was falling behind in her other work...but there was a bigger problem, they were not charging for the time spent doing all this work..

This time log allowed us to see very clearly why this property manager was stressed out; she was spending too much time of something that was not dollar productive.

There were two ways to tackle this; slow down on the renovations, allowing the property manager to keep up with her other work OR start charging clients to renovate their properties.

This business opted to charge clients to renovate their properties, charging a percentage of the total cost of the renovation; (anything over $1,000) giving the business more revenue to cover the cost of more support to keep up with the services promised to clients.

First Impressions

Bob Walters True PM cropped

An article by Bob Walters

There is an old cliché which says “you dont get a second chance to create a first impression”. 

Research shows that people have often made their minds up about you and your product or service within thirty seconds of first meeting.  It is therefore vital that the impression which you make during that brief window of opportunity is the right one.

Most property managers present themselves well as a matter of course.  As with any service business, we simply cannot afford to have an off day in terms of energy level, dress or skill level.  Most of us are obviously well aware of that.

However, if you are visiting a client or potential client in their home for the first time, the very first impression you make is with the car in which you arrive.  The make and model may not be relevant, but its state of cleanliness both inside and outside, certainly are.  It is therefore, most important that your car be clean and tidy and in a good state of repair. 

Not too long ago I had the experience of visiting an office where I was told, proudly “we do have an office car”.

 “Yes” I replied “you do, I saw it when I arrived”. 

Taking the team over to the window, I pointed out to them the abject condition of this vehicle and asked them how they would feel as a landlord client if the person they wanted to manage their substantial investment arrived in that vehicle.

Finally, and most important is the state of your personal office or desk area. 

If you have clients coming to meet you, the impression you create can be decisive.  A sound practice is to take a quiet time, perhaps first thing in the morning or on a weekend to walk into your office area and sit where your client sits. 

From that point act as a client would, taking in the overall impression of the office and in particular your personal area.  You may be shocked with what you see. 

Perhaps it will even help you change your personal habits in terms of the way in which you manage your working environment.

How to be a Super Leasing Agent by asking the Right Questions

Karen Herbert cropped

An article by Karen Herbert

The Rules

  1. Be professional, respectful and courteous
  2. Be on time and organised
  3. Know your stock - pets allowed, furnished, term of lease, special terms etc
  4. Know your legislation
  5. Genuinely care -  what kind of property do they really want and or need.  This property may not suit them, then refer them to another one.
  6. Have empathy for their circumstances
  7. Create trust/rapport
  8. Engage in conversation
  9. Ask open ended questions 
  10. Uncover any objections
  11. Try to overcome objections - solve the problems or provide solutions
  12. Thermometer in - ask  how they feel about the property
  13. Ask for the order
  14. Tenants are gold

 

The Questions

  1. Have you seen many properties?   
  2. When do you need a property by? 
  3. How many of you are there that will be renting?
  4. How does this compare to what you have seen so far?
  5. Discuss the and see if you can either overcome them or solve the problem 
  6. i.e. If a tenant says the 2 bedroom is too small, ask what size bed they have and or what kind of furniture do they need to fit.  Do they have a desk (if so, can we find another space for the desk).
  7. Get them to enter into discussion about your solutions to see if they are in agreement
  8. Do they have any more properties to look at?
  9. If they are interested in the property, see if you can get them to put an application in today, maybe by highlighting the interest received so far in the property
  10. Make it easy to do business with your agency.  Have applications ready, encourage use of 1Form
  11. Explain the application process
  12. Hand hold them through the entire process
  13. If they are not interested in this property, then see what other properties you might have that would be suitable and get them registered to inspect
  14. Assure them that your Agency will look after them well.

The Management Agreement

Lisa Pentland Headshot sandstone

An article by Lisa Pentland.

When was the last time you read through your Management Agency Agreement?

Don’t worry, if you’re blushing right now, thinking, I’ve never read through the entire agreement, sadly, you’re not alone.

The thing is that no matter what role you play in your property management team, it is essential that you take the time to read through and understand the terms and services you’re agreeing to provide and be bound by.

There has been numerous changes and additions to standard agreements over recent years and taking the time to go through the agreement with your landlord gives you opportunity to have some great conversations about their management preferences and the services you can provide.

It’s also imperative to ensure that BDM’s and Property Managers are on the same page when it comes to your customer service offerings.

How to tackle this:

1st

 I would recommend that you nominate team member to go through your standard Management Agency Agreement. Allow plenty of time, to read and digest each part.

It is important to consider:

  • Is every question answered in full, with no blank spaces and no abbreviations?
  • Will the way each question is answered stand the test of time?

E.g.. Don’t use exact amounts for cost recoveries i.e. $47 Tribunal Application Fee rather “at cost at the time of application”

  • Take the opportunity to review your fees, are they still relevant or long overdue for an update.
  • Have you adopted a fee schedule for the management of insurance claims and renovations over a certain value? If not, you’re doing all that work while the property is empty and you’re not getting paid.
  • Disclosure of rebates – do you offer things like connection of services for new tenants and owners or landlord insurance? Are they clearly listed?
  • How often are you undertaking to inspect the property – are you exposing yourself to a breach of agreement?
  • One of my favourites… “send the owner a copy of all correspondence” you’ve probably been ticking it for years without even realising. Is it necessary or even what your clients want?

 

2nd

Perhaps the team member could develop a list of discussion points and queries to be solved as a team.

3rd

Once that is done you could complete the ideal sample template to be used until your next review.

4th

Finally, quality control – every management agreement should be checked by a 2nd pair of eyes prior to being filed.

The livelihood of your agency depends on it!

10 Top Reasons to Terminate a Management

Karen Herbert cropped

An article by Karen Herbert

1. The property is unsafe.  

Don’t be afraid to terminate an owner if he will not spend money on rectifying a safety hazard or a potential risk.  The ‘No Win, No Fee’ lawyers continue to circle our environment waiting for their next potential client.  It’s not worth the pain.

2. The property poses a health risk

One of the major potential health risk in our properties would have to be MOULD.   And it is difficult to manage.  If the problem cannot be solved, then terminate the property.

3. The owner will not fix maintenance

In today’s world of litigation, this is just no longer acceptable.  The court rooms are filled with cases where the Property Manager/Owner will not keep the property in good condition and fit to live in.

4. The owner will not spend money

We have all had experience with an owner who is not prepared to spend money on maintaining or uplifting his property.  An investment property is exactly that, an investment and needs to be fuelled to sustain its return.  The better the property, the better the Resident and the less work for the Property Manager.

5. The owner refuses to adhere to the legislation

Whether it be discrimination, grounds for entry to the premises or disregarding the legislation surrounding the sale of a property, the legislation is there to protect you but only if you adhere to it. 

6. The owner is intimidating

I have seen too many property managers say yes to an owner because they are scared to say no.   Remember that we are the expert in our industry and knowledge has power.  Stay informed, keep educated and know your legislation.  This will give you the courage to say no.

7. The owner has no Landlord Protection Insurance.

It’s called Peace of Mind, both for you as the property manager and the owner/client if something goes wrong.  For less than one weeks rent, it’s a must in today’s environment.

8. The owner does his own maintenance

With all the legislation surrounding our industry, I believe that this poses one of our greatest risk exposures, insurances, licences and qualifications, not to mention that it puts the owner directly in contact with a tenant.  Not on.

9. The return is too low.

Every property should have a minimum return to the Agency and be monitored as a KPI on a regular basis. At least know your breakeven point on managing a property.

10. The 80 – 20 Rule

Every year you should make a list of the Top 10 properties you would like to terminate and the reasons why.   Mostly these are the properties/owners who you spend 80% of your time with and who are costing you money.   Wouldn’t you rather be spending time managing the properties who make you more money??

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