PMs reject increased portfolio size

PMs reject increased portfolio size

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Property managers have rejected claims from industry executives that portfolio numbers should reach as high as 700 in the next few years.

Speaking at the Residential Property Manager Executive Roundtable, Michael Conolly, head of property management at McGrath Estate Agents claimed property managers have not come very far when it comes to handling larger portfolios.

“Going back some time now, we had property managers looking after 420 properties on average each, with the view of going to 500, and all our property managers were on board,” he said.

“With all the fantastic things happening in technology, why are we not sitting here today talking about property managers managing 700 properties?”

However, branch manager at hockingstuart Brunswick Chris Snell told Residential Property Manager that his property managers would quit before they accepted portfolios of 700 properties.

“The concerning comment was that they are predicting portfolios to grow to between 500 and 700 properties in the coming years,” he said.

“It’s impossible for a single property manager to manage 500 to 700 standalone properties. If you’re doing two inspections a year, you’re looking at a thousand at least. Then you have your four weeks off, which means they have to be done in 48 weeks, so you need to inspect over 20 properties a week minimum.

“On top of that you have your maintenance, your lease renewals and rent reviews. It’s just not feasible,” Mr Snell said.

His comments echoed those left on the original story, where one reader said the expectations of the executives were unrealistic.

“How can one property manager inspect 175 house per quarter, issue reports to the owner and handle everything else? This does not include showing vacant properties,” Ms Watson said.

“Rent reviews, lease renewals, maintenance and follow up etc. Either a poor service is being given to the landlord or your property managers are super human.”

Mr Snell agrees that increasing portfolio sizes means sacrificing customer service.

“To figure out the right amount of properties they should each manage you need to ask what level of service you want to deliver to the client. [The executives] mention that consumer expectations have increased, so in that case portfolio sizes should be shrinking, not the other way,” he said.

Rent roll broker Chris Goodway agreed with Mr Snell’s comments, but suggested offices may split into two specialty business structures.

“I can see the Australian market having a handful of ‘super’ agencies either as standalone or a franchises handling up to 30,000 properties around the country, while a lot of the more established agencies will strive to build their rent rolls into the 2,000 to 3,000 property range,” Mr Goodway said.

“However, I do not see a dropping off of the demand for smaller boutique agents that can offer a higher level of service to their client base in certain parts of the market.

“There has also been an interesting move towards smaller home-based rent rolls of 30 to 100 properties, especially by younger women who enjoy the flexibility of working from home while caring for their children.

“They can offer a very personalised service and keep running costs to a bare minimum, thereby making a good income for themselves.”

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