As investor priorities shift, property managers are being challenged to move beyond day-to-day management or risk missing the biggest growth opportunities emerging across today’s market.
As investors shift their strategies and rely on both yields and capital growth, property managers need to understand how to capitalise on the new market landscape.
LJ Hooker head of property management ANZ, Cathie Crampton, said that instead of seeing the new market as a negative, they should identify the opportunities that lie within it.
She said that while many investors focused on their rental yields when purchasing a property, there was an opportunity for property managers to create income for their clients and support capital appreciation.
“We need to coach them (PMs) and help them understand that the role is not what it was, even a year or two ago. They need a different level of capability, and they need to have the confidence to have a different type of conversation with their clients.”
She said that PMs didn’t need to be financial advisers, but they should understand how to effectively facilitate an asset’s growth and communicate it to a client.
According to Crampton, while it would be valuable to the client, it was also a chance to strengthen their own career prospects.
“It gives them an opportunity to grow their own role, opportunities, career and all of those things because they are stepping out of a traditional lane,” she said.
“What I think it’s going to do is start shifting how we determine value,” Crampton said.
Handling unfamiliar conversations
Crampton said that property managers needed to be willing to step outside their comfort zones if they hoped to continue growing their business.
“To demonstrate more value, you need to understand that the lane you had is not the lane you need; it’s different now. The role we need to play and the type of conversations we need to be comfortable having is different.”
When it comes to handling investors, Crampton said property managers were often focused on maintaining the asset when they should be prioritising its growth.
While yield was often treated as a property’s gross rental income, Crampton said that PMs should discuss options to enhance the property’s return on investment (ROI) with owners, such as minor improvements or capitalising on depreciation schedules.
“There’s a lot of facilities out there that can improve the property, which improves the total return.”
“We have to start having those more meaningful conversations, which I don’t think most agency owners are expecting their property managers to have.”
She said that landlords and property managers often overlooked opportunities to leverage tax depreciation, and that those who could convey this effectively could strengthen their relationships.
A business leader’s role
Crampton said that business leaders needed to understand the difference in value between the sales and the property management divisions, and treat them as two entirely separate entities.
“They’re different dynamics, and that’s why it is good to treat them as separate businesses with their own profits and losses,” she said.
“You can’t afford mistakes, and you can’t afford not to be growing. If I were owning a business today, I would be buying rent rolls.”
She said that if an agency understood that they had capacity to take on a larger rent roll, they could potentially plug in a rent roll of 200 properties without even increasing their cost to serve.
“There are great opportunities out there,” she said.
While technology and automation tools could be valuable supportive tools for agencies to grow, Crampton said that more often than not, they were a hindrance if not used correctly.
“What has happened largely is that they’ve bolted on a bunch of tech products without understanding the purpose of it or optimising the utilisation of it. They have just made their lives more complicated, and not improved their productivity.”
She said that agencies needed to understand the problem they were trying to solve before they could begin implementing tools to fix it.
Not only should the technology allow PMs to reach a new level of properties under management, but Crampton said it should also free them up to do more relationship building with their clients.
“What tech should be providing is the increased capacity for your person to have these different types of conversations.”
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