Rent roll profits drive record interest

Seminars featured a range of local and international speakers, including US-based specialists Todd Breen and Robert Locke, along with Australian talent such as Chris Rolls, managing director of Rental Express; Bob Walters, executive director of LPMA; Ewan Morton, managing director at Morton&Morton; and Darren Hunter, national speaker, trainer and consultant, and director at LPMA.

In his talk, Mr Hunter focused on the top 20 property management fees charged in Australia.

“I’ve been doing fee maximisation for 12 years,” he told Real Estate Business at the conference. “It works, every time, period. [But] it only works in departments that have a reasonable level of stability. So, in other words, if landlords are unhappy with the service, you just don’t do it. You’ll lose them.”

A client survey can be the key to determining whether a fee maximisation campaign is right for your business, said Laura Levisohn, LPMA panelist and head of property management for M Residential in Western Australia.

“We conducted a quality of service survey to determine what were the most important things to our clients and if we were meeting their expectations,” she told delegates.

“The respondents were clear that fees were not the most important thing to take into consideration when choosing a property manager.”

Ms Levisohn herself has successfully maximised her property management fees, with just three landlords from her considerable rent roll taking their business elsewhere.

Robert Locke, who runs one of the largest property management businesses in the United States, said it is paramount for offices to have a ‘Scope of Service’ booklet if they intend to maximise fees.

“We have 14 pages that list everything we do from start to finish for our client,” he said. “The minute we do anything outside that list of services, the landlord should pay.”

Meanwhile, LPMA executive director Bob Walters explored the relatively new concept of managing another agent’s rent rolls.
 
Mr Walters acknowledged the fears of some principals when considering this approach, which largely concerned a perceived loss of control, preventable losses and losing clients to the rent roll manager’s business.

These concerns could be overcome, he said, by following clear guidelines and by having a watertight contract.

Some of the things that needed to be factored in were the length of the deal; the size of the rent roll; staffing numbers; the arrangements for those currently working on the rent roll; hours of operation; and, importantly, having an agreed figure for an ‘acceptable’ number of preventable losses.

In an open forum entitled, ‘Today’s Greatest Challenges for Agency Principals’, property managers and principals not only outlined the issues they face in their business, but also provided solutions.

Michelle Rigg, business manager at Harcourts Alliance Joondalup in Perth, said she had addressed the perennial problem of retaining quality staff by offering rostered days off (RDOs). Every two weeks, staff received a day off (which couldn’t be carried over to the following month).

Interestingly, however, while staff had complete control over when they could take their RDOs, many weren’t being taken.

Ewan Morton addressed the highly topical issue of how to motivate GenY staff, telling the audience that it was important to challenge and push GenYs in their roles.

While some GenYs believe they can take on more senior roles, letting them do so frequently means they face a harsh reality: that they aren’t ready for the increased responsibility.

Most GenYs, however, can generally handle this realisation and then ask to learn more about the role.

Allowing GenYs to use 10 per cent of their day for Facebook (for business purposes) was another suggestion – for many GenYs, this is the preferred way in which to communicate and is therefore not significantly different from earlier generations who spend much of the day communicating by phone.

Forum participants also raised the subject of recruitment, with one NZ-based principal offering a possibly unique solution to agencies that are struggling to find staff.

In his case, after quickly hiring and firing two ‘experienced’ property managers, he decided to break up the role by tasks.

Once he had done this, he realised a majority of the role was administrative and he has since employed an administrator – a job for which there are many more available candidates – to handle most of the role’s responsibilities.

Property inspections and move-ins/move-outs are handled by a property management specialist.
 
Leah Calnan, director of the Victoria-based Metro Property Management, said she was disappointed with the level of training that many principals offered their property management staff, while a majority of their education budget was focused on the sales department.

For this reason, Ms Calnan developed a 12-week training course that included an initial four-week period during which the new recruit didn’t answer a phone call. She said it was critical new staff gained a full understanding of the company’s processes before engaging with clients.

Meanwhile, American property management specialist Todd Breen showed delegates how they can utilise video in property management.

“It’s far more difficult to hide from a problem when it’s clearly framed in a video,” Mr Breen said.

He then showed delegates how he diffused a serious situation – illegal drugs found on a property – by filming the house and instantly uploading it to YouTube so the landlord could see it and then take practical action.

“If I had not filmed the home, I would have had an angry landlord jumping on a plane to fly half-way across the country,” he said. “Once he saw the footage, he trusted me to take care of the situation because he got a full view of the home.”

Sandra McGee, rental manager at Starr Partners Merrylands, and Real Estate Institute of NSW (REINSW) Woodrow Weight OBE award winner for 2010, highlighted one simple thing she learned at the forum that would ultimately save her and her team hours of work.

“[A delegate told me] that they email their tradesperson with a job order but, at the same time, they CC in their tenant,” she told Real Estate Business.
 
“This gives the tenant the opportunity to know the tradesperson has got the job, and who the tradesperson is going to be. If the tradesperson doesn’t contact them, they can contact you or contact the tradesperson [directly].”