Property management is one of those areas of the business that becomes the focus of agents when sales gets tough.
Today, many agency principals recognise that they need to focus more seriously on property management for a number of reasons:
- ASSET VALUE – property management is a saleable asset
- FIXED COST COVERAGE – property management is almost recession-proof
- SALES REFERRALS– according to the Macquarie Relationship Banking 2012 Residential Real Estate Benchmarking Report, 16 per cent (on average) of an agency’s sales come from property management referrals
With these points in mind, many agency principals come to me and ask me how to maximise the performance of their property management team.
My response is simple: treat your PM team as you would the sales team.
Develop the team and monitor and reward results – all of which is focused on delivering results to customers.
From a simple strategy such as this, you can create a great point of difference – a set of customer service standards, things your clients want, and things that your team can easily achieve.
A successful property management department does three things well: monitors performance, sets targets/goals, and rewards and celebrates achievements.
What do you monitor? Many more activities are required to run a smooth, successful property management business than are required for sales.
To begin with, break down activities into key areas: new business, leasing, property management and financial.
Make a list under each of these headings – for example, open homes, private appointments and follow ups would fall under the leasing heading.
A majority of this information can be obtained from your trust accounting program, and when your team is entering the appropriate data this is easy to get.
If you are unsure how to generate these reports, talk to your trust accounting provider and ask them how to go about it.
This information is important for you and your business in achieving your goals. You need to encourage your teams to enter the information, not only so you can monitor performance but also, if you need to go back and prove anything in a tribunal or court, you have the information recorded.
Use this information to help the team improve each month, and to plan for busy and quiet times within the business (for example, it is ideal for approving holidays and staffing levels). This will also allow you to recognise issues in the business before they become major and expensive problems.
For example, you might realise your business hasn’t done enough routine inspections for the past year since you have been too busy.
If you are monitoring results, you can see from month to month whether inspections have been completed and can work out why before it comes to the owner’s wanting compensation because we haven’t been there.
Also, set the team key performance indicators or targets for certain areas, giving them something to strive for.
On top of this, you need to reward things you want your property management teams to do – and vice versa for those you don’t.
Along with your guarantee of service, put your money where your mouth is.
Should any of these targets not be achieved, the dollar amount in your guarantee is applied to the retention incentive (i.e. the relevant amount is deducted).
This is a great way to win business – it’s very powerful and yet it means you still have a sensible balance with the financial side of the business.