Property managers are gearing up for spring and so we spoke to some Australian Real Estate Award winners to find out how they get the best results at their busiest time of the year
THE RENTAL market – traditionally – blooms in spring, and this year is set to be no exception, according to Andrew Wilson, senior economist at Australian Property Monitors.
The investor market is at its most active level on record, Dr Wilson says.
“What is really interesting is that as well as a boom for sales, this spring we will see a boom in the rental market,” he tells Residential Property Manager.
“We are seeing a rise in investor activity in all capital cities and according to the recent ABS [Australian Bureau of Statistics] monthly lending finance [figures] for investors, 54.1 per cent of home loans are going to investors.”
Dr Wilson says this increase in investor activity is being spurred on by the low interest rate environment.
“The low interest rates – not just for borrowers but for depositors too – plus the volatile and underperforming stock market; solid yields of around five per cent; low vacancy rates in all capital cities except Melbourne; and price capital growth in most capital cities are the reasons we are seeing that flight to bricks and mortar by investors,” he says.
“The question will be whether there will be enough supply to meet demand.”
Michelle Williams, director of Launceston-based @home Property Management and winner of the Property Manager of the Year title at the inaugural Australian Real Estate Awards (AREAs), says the investor influx heralds a busy period for property managers.
“Based on my research and experience, the workload for property managers literally triples during spring and summer months,” she tells Residential Property Manager.
“Naturally all states are different and fluctuate depending on the demographic and demand, but Launceston has a maritime college and university and therefore is affected by the student intake. We experience high volumes of vacates in October through to December and new tenancies ready for the school year in January through February.”
While every year, as September rolls around, the excitement surrounding the spring selling season is palpable among real estate agents, property managers have just as much to be excited about, says Kim Wilson, a property management director at Barry Plant, winner of the Property Management Company of the Year at the AREAs.
“Spring is here and it is just as exciting for property management as it is for sales,” Ms Wilson says. “As the weather improves, more and more potential tenants start attending open for inspections and enquire about available properties.
During the winter months we see a reduced number of tenants out and about.
“Most of the tenants looking during winter are looking to move because they have to – they have been given a Notice to Vacate due to owners’ selling, developing or moving back in. Most tenants will not choose to give 28 days’ notice during winter and move.
“As we enter spring and the weather improves, tenants who are making it their choice to move start to enquire about properties and attend open for inspections.”
And according to Ms Wilson, increased activity in the sales market has a significant run-on effect on the rental market.
“The active sales market during spring also has a positive effect on property management activity and increased listings,” she says. “We see an increase in the number of new properties being listed due to owners’ renting out their own homes because they have purchased a new property.
“The number of investment properties being purchased also increases, providing the rental market with an increased amount of stock for the busy spring season.”
THE APPEAL OF SPRING
According to Sarah Latham, director of Latham Cusack Property, the Best New Office winner at the AREAs, the
spring surge in rental activity comes down to four things:
“Properties present better when the gardens are in full bloom, the sun is higher in the sky and the property interiors appear brighter, by allowing more sunlight to filter through,” she says.
“Older houses that tend to be cold and a little damp in winter are more appealing as it gets warmer, and tenants tend to open their windows more as the weather warms up, allowing for fresh air to flow through the property.”
The time of the year means relocating properties can be done before the start of the calendar New Year, which is ideal for many moving families. “Moving in the spring months means that they can be settled before the end-of-year rush of Christmas, New Year and new schools,” she says.
“[Finally], spring also provides temperate weather for moving – unlike the hot days of summer.”
THE CALM BEFORE
Preparations for spring should have begun several months ago, Ms Williams says.
“We plan for this period in advance, with formal planning meetings and subsequent actions in preparation,” she says. “For example, we attend more routine inspections in April through to September in order to limit the number over peak season.”
However, there is still much a property manager can do right now to ensure the spring season goes off without a hitch.
“The most important thing during this time is to monitor each portfolio carefully to ensure the property managers are not overloaded [so as] to prevent stress and burn out,” she says.
“Department managers should keep communications open with the team so that they can adapt to changing working conditions.”
Amy Sanderson, head of property management at LJ Hooker, which was named Major Network of the Year at the AREAs, suggests ensuring databases are cleaned up and ready to go.
“Also ensure that you have enough ‘For Lease’ boards and flyers ready to go and everyone is versed on how to manage enquiries properly,” she advises.
Ms Latham recommends property managers look ahead first before filling leases in spring. “Where possible, our office doesn’t sign up leases that expire in winter,” she says. “It’s just not in our landlords’ best interest to be showing their investment property at that time of year.”
According to Ms Wilson, success in spring comes down to having procedures and sticking to them.
“In my property management department there are procedures in place for every action and task to be undertaken,” she explains.
“Spring is certainly not the time to divert from those procedures. A systematic approach to all daily tasks is what will ensure a stress-free and rewarding season.”
AMPING UP YOUR STAFF
Ensuring your staff are geared up for a great spring season can make the difference between hitting your targets and falling short. With that in mind, Ms Wilson says her staff conduct a thorough spring clean of the office.
“Having a fresh, clean office, and a de-clutter of drawers, desks and store rooms, not only sets us up to be optimally organised for spring, but also gets rid of a lot of dust and allergens,” she says.
“If we are well organised and ready to go, the daunting prospect of our daily calendars is not so scary.”
According to Ms Latham, the best way to prepare your staff for the season is to have a good indication of how many properties will be up for lease.
“I instruct my staff to keep in regular communication with tenants whose leases are coming up for expiry in spring to see if they plan to renew their lease or move out,” she says.
“This gives the property managers a good indication of how many properties will be coming up for lease and to make preparations accordingly.
“Where possible, we ensure that all rent reviews or periodic inspections due during spring are attended to prior, so [property managers] are more available to attend open for inspections and private viewings of their properties for lease.”
Ms Williams employs an office business coach to ensure individual property managers are coping with the workload. The business coach works all year round, but becomes especially useful during the busy periods.
“In our office, along with my personal support and training with the team, we engage a business coach who supports the team with both one-on-one discussion and group training sessions,” she says.
“This has proven to be a valuable tool in recognising the needs of each individual. It encourages open and honest communication from the team and allows management to focus on targeted training and support where it is most needed. It can also identify when you may need to consider additional support staff to cover the workload.”
To keep staff motivated during the spring season, Ms Sanderson emphasises the need to create a positive culture in the office.
“We have regular meetings, monitor progress and congratulate our property managers on what has been leased,” she says.
“Also, make sure you keep a close eye on what hasn’t been leased and offer assistance where required.”
TARGETS AND GOALS
Spring might be a busy time, but targets and goals are just as important then as at any other time of the year. The real estate market is affected by so many external factors that it is important to monitor key performance indicators (KPIs) and, if necessary, make changes to the way in which a team approaches the market, says Ms Wilson.
“We monitor our market trends, goals, targets and actual figures on a weekly basis,” she says. “Our agency has maintained records of targets, goals and market trends for the past 10 years in our area, and the month by month statistics are very similar from season to season, year in and year out.
“This great bank of data means we have the information we need to thoroughly prepare for the spring season.”
Property managers nevertheless need to be motivated and recognised for their efforts, according to Ms Latham.
“A sliding scale in commissions paid on the number of properties leased each month is recommended, with an additional bonus paid for properties leased in record time,” she says.
“For larger offices, this can lead to fun and light-hearted competitiveness between the team.”
Ms Williams’ company has core systems in place to monitor KPIs, tasks and income-generating priorities.
“We achieve this with a ‘control board’ and weekly meetings to record statistics,” she says. “In the meetings, we record things such as vacancy rates, rent arrears percentage, rent arrears more than eight days, routine inspections due, applications pending and tenancy renewals due to expire in less than 28 days.
“The control board is a centralised board where we record daily, monthly and quarterly results such as: properties let, properties vacant, new management gained, properties lost, vacancy rate percentage and arrears percentage per portfolio.”