A client for life

There were office workers, engineers, teachers and tradies. Then the conversation turned to renting.

Broken stove tops that are never replaced, out of order signs hanging limply on old heaters, property managers who don’t show up for inspections or worse, don’t even return phone calls, all seemed to be the norm among these young professionals.

With a vested interest I asked my friends, ‘What have you learnt about renting that you will take with you when you’re a landlord?’

One friend chimed in straight away – he has been renting for five years and is in the process of gaining approval from his bank for a loan to purchase an investment property. “I won’t be using my manager, that’s for sure,” he said.

In fact, this seemed to be the sentiment of many of the people around the table. Unfortunately, this is not an uncommon feeling among renters, according to Claire McGrath, director of Rental Management Solutions Harcourts in Queensland.

“I think that there has been a lot of misconception about why people rent,” she tells Residential Property Manager.

“In the past, many people have had the attitude that ‘Oh, they are only a tenant – they won’t look after the property’.

“I believe there has been a lack of respect towards tenants. I too have rented and even being a business owner of a property management company, I have seen similar treatment.

“Interestingly enough, not everyone is ‘just a tenant’ – they too may own their own homes,” she adds.

While tenants now, the young professionals I chatted with are just at the start of their property cycle. Some may go on to own their own homes, others may become active investors and some may decide to rent properties for years.

Whatever their decision, as current renters they deserve respect and professionalism, says Darren Kersten, principal at Starr Partners St Marys.

“I think that there are agents who still have the attitude that tenants are second class to landlords,” he says.

“Personally, in my 20-plus years in the industry I have always tried to treat both my tenants and landlords as equally important parts of my business.”

And according to Mr Kersten, it is a business tactic that has paid off. “We receive many referrals from tenants who know people who are buying and selling,” he explains.

Ms McGrath says she has also had a fantastic result with tenants who have later become landlords.

“The area we are based in sees a lot of army recruits. If they are in the army, have rented through us and have bought a house in the area, we will usually be the first people they turn to,” she says.

“Last month we had two previous tenants who listed and rented their properties with us, and in the last year we have had five tenants refer landlords to us.”

According to Clare Kemble, Victorian state manager at CENTURY 21 Wentworth, across the four offices she looks after they average 2.3 new property gains per office, per month because of tenant referrals and past tenants becoming landlords.

“This trend is more prominent in certain areas; however, each of our Victorian offices gain further business regularly due to this source,” she explains.

But the benefits of creating a client for life aren’t just in the numbers, says Ms Kemble.

“The short-term positives of creating a tenant for life include being able to communicate well with the tenant and hence, being able to manage the property they are renting without communication breakdowns,” she says.

“Tenants are more likely to take your advice as the agent and work with you instead of against you if they have trust and respect for you as their agent, which ultimately pleases the landlord as well.”

According to Mr Kersten, having strong tenant relationships simply makes life easier.

“A good tenant relationship is a lot easier and less time consuming when it comes to managing the property,” he explains. “Even when it comes to bond claims, if the tenant feels you have been consistent and genuine in your dealings with them, they are a lot less likely to dispute any claims made.”

The long-term effects of a positive tenant- property management relationship are countless, says Ms Kemble.

“The long-term positives of creating a tenant for life include them referring business to you down the track, positive word of mouth feedback to friends and relatives, thinking of you and your agency first when the time comes to buy or sell, and having a general feeling of respect and loyalty to you as an agent,” she explains.

And that is exactly what happened to Christine Turner, development manager of the property management department at Stockdale & Leggo Glen Waverly.

“When we talk about creating a client for life, one landlord comes to mind,” she recalls. “He listed his property with us over four years ago. The reason he came back to our company was due to the fact that we expected him to clean the property more thoroughly upon his vacation.

“In saying this, he was extremely appreciative of the manner in which our property manager approached the cleanliness issue, displaying courtesy and respect.

“He was pleased that we had the owner’s best interests at heart with the maintenance and cleanliness of the property and that the matter was approached in a professional and respectful manner.

“We now manage three properties for this same owner, with future investments to come.”

According to Suzanne McConnell, director at mcconnell bourn, the foundation of creating a client for life is getting the fundamentals right.

“There are a lot of little things you can do to create a client for life, but if you don’t have the basics down pat then nothing else matters,” she says.

“Customer service, communication, consistency and attention to detail are all key to creating strong client relationships.”

It may be an old adage, but Ms McConnell says it is essential that you treat your tenants the way you would want to be treated yourself.

“Simple things such as returning calls and emails promptly, following through on promises to tenants, being firm but fair and reasonable in difficult situations, keeping tenants frequently updated on prolonged and complicated maintenance issues,” she suggests.

“It’s these sort of basics that we hear are so often forgotten by some property managers, and so when we get the basics right, tenants really respond well and remember the level of service and good will you provide.”

Ms McGrath goes one step further when it comes to creating a client for life.

“Rapport is created when we accept the tenancy, which we do with excitement and enthusiasm,” she says.

“I heard one of my property managers last week say ‘I can’t wait to have you as a tenant’, which I did think was a weird comment, but it didn’t matter – it made the other person on the phone feel good.”

According to Ms Kemble, it is time for property managers and principals to change their state of mind when it comes to tenants.

“Agents need to understand that tenants’ situations change. It is important that property managers with the

‘just a tenant’ mindset change the way they think if they want to reap the benefits of positive tenant-property manager relationships,” she says.

“It’s also important for directors and managers to educate property managers to modify their way of thinking.”

SHARING SECRETS

Creating a strong relationship with your tenant clients takes more than just a generic newsletter or an odd phone call every other month, according to two client specialists

“We use a tenant reward program and give out things like NRL football draw cards, which is really successful.

But the biggest way we create tenants for life is by treating them with respect and communicating with them as you would all your clients. We respond to their enquiries quickly and efficiently, from their initial application stage through to repairs, maintenance and the vacating process”

“We do a list of things to ensure our tenants are happy and this even comes down to the way you speak to them. It’s about regular communication in a calm and happy tone, and asking questions rather than making accusations. Tenants get SMSs each month to ask for any outstanding issues not attended to, we do happiness surveys, they receive tenant packs at the start of the tenancy, and we have a 24-hour email reply and same-day phone call policy”

FROM CRADLE TO GRAVE

Building long-lasting relationships with tenants is key to avoiding missed opportunities
Douglas Driscoll, CEO, Starr Partners

A MAJORITY of real estate businesses view their relationship with tenants as transient, which is understandable given that the average tenancy occupancy in Australia is thought to be only 11 months.

I have always believed this to be very myopic though, as many tenants’ property needs extend beyond the term of their tenancy agreement. As a result, I nurture an obstinate belief that businesses should always try to establish ‘cradle to grave’ relationships with tenants because having a long-term view can prove very rewarding.

A few years ago, I commissioned an extensive study into the average client lifecycle.

I set out to analyse the behaviours that characterised our clients, determining the right objectives and the best ways of reaching them. Although they are not technically clients, I was particularly interested in our relationship with tenants, as I believed we were missing an opportunity.

As I feared, the results highlighted that there was significant room for improvement on our part. Of greatest concern, the study showed that once a tenant vacated a property, there was very little or no ongoing interaction, effectively spelling the end of the relationship. This was particularly alarming, as a staggering 18 per cent of the tenants we tracked went on to purchase a property in the same suburb within three years.

The study taught us a very valuable lesson. It highlighted the true extent of what we had let slip through our hands, as these people would also go on to sell properties in the future.

Needless to say, our view of tenants changed dramatically. We decided to create a compelling and cost-effective customer experience strategy linked to the broader strategy of the business.

Rather than view tenants as ephemeral, we now understood that building ‘cradle to grave’ relationships with them would lead to delayed gratification.

By removing the office walls, metaphorically speaking, we improved internal communication and were able to closely align property management with sales, ensuring a consistent customer experience across all facets of the business.

Our ethos is that lasting relationships are built on information, not promotion, so tenants now regularly receive a plethora of useful information.