After losing just one landlord through increased fees, one property management team believes it has found the secret to success when it comes to increasing profit.
According to yesterday’s story on Residential Property Manager, property managers are working harder for less money and according to industry commentators, it’s because businesses are too scared to demand higher fees.
“What we find sad is that some people believe that, despite knowing they have the right conditions of general stability in place, they still believe they will sustain serious damage should they increase their fees,” said industry trainer Darren Hunter.
Speaking with Residential Property Manager, head of property management and BDM at M Residential in Perth Laura Levisohn believes her office has found the right way to go about raising fees.
“I was a bit worried before we decided to charge more, but probably not as fearful as most other property managers seem to get around this issue. As a director of the company, I could see the value in increasing fees,” she said.
To settle her nerves, Ms Levisohn sent out a customer satisfaction survey to her landlords.
“I asked questions such as how happy they were with our service, our processes and procedures, and mid-way through we asked what their motivating factor for choosing us was," she explained.
“With the options of market knowledge, market presence, fees, understanding of the legislation and our policies, we found the fees were ranked at around third place.
“As a BDM, I know the first question everyone asks is about fees and if there’s room for a reduction – but it’s not actually the motivating factor.”
Once confident there wouldn’t be any backlash, they introduced a fee hike as well as a new lease renewal fee.
“After that, we had one client leave, which is very very good. I had set out two weeks to deal with the expected wave of calls, but we just had a handful asking us to clarify what the new fee was for,” Ms Levisohn said.
While M Residential was in a position to increase its fees, it’s important to make sure your clients are happy and stable enough to weather the change.
“I recommend finding out what your clients think of you first, and if there’s any holes in your service, you need to fill them before you can charge more,” said Ms Levisohn.