The communication gap costing property managers new business

Back said that while the pressure would come both externally from owners and tenants and internally from agency principals, the ability to manage those relationships would prove to be a significant differentiator for PMs going forward.

“I think the property managers that win the next tranche of time will be the ones that can communicate their value,” Back said.

“Being a great property manager gets you retained, but great communication gets you chosen.”

In his experience, Back said that property managers and brokers often made the same error when it came to reaching their clients, approaching it too practically.

“I think the marketing problem that agencies have again is they are marketing the wrong thing. I think this is more about the experience itself that they need to be pitching.”

“It’s a bit like brokers who pitch rates and offset accounts, redraws and the functionality of the loans themselves, when at the end of the day, clients care about two things: Can I have it? And when can I have it?”

Balancing client expectations

Back said that for many buyers, their first experience with finding a property manager came after navigating the stressful process of purchasing a home.

He said that it created a challenge for PMs who were brought in and expected to hit the ground running.

“One of the challenges that the property management industry has is that generally you’re coming in at times when there are always problems.”

“You’re in this short triage period when your stakeholders have got a gripe, and it’s really challenging.”

With PMs often playing a key role in addressing uncertainty for buyers, who may have little to no experience owning a rental property, Back said it was important that they could educate their clients.

He said that PMs needed to assist and ensure that their clients had developed the right strategy to manage their assets in the long term.

“People don’t want volatility; they want certainty in their investment.”

“They want to know that things get paid on time, and that if there is a problem, someone is going to handle it, because most people don’t want to get involved in these things.”

How investors decide on a PM

Back said he had seen two main schools of thought when it came to property management: some businesses used it to support their sales division, while others specialised and made it the focal point of what they do.

He said the great property management businesses went beyond just maintaining the property, providing valuable insight and advice to the owners of their rent roll.

“Are you a value partner that’s on the journey with me to help me grow my wealth and maintain my assets, or am I a drive-thru service that gets the minimum standards?”

While some would offer lower fees to gain business, Back said pricing should not be the deciding factor in how investors choose their property managers.

“If we are just going to compete on price, then it is a race to the bottom, when in fact, what’s really important to me is a relationship that reduces my stress about the investment property.”

“If you take care of all of this and I don’t have to think about it, that is worth the extra 2 per cent.”

Listen to the whole episode here