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Select the right property manager for the client – No more eeny meeny miney moe!

Team | October 2, 2017
Jodie Stainton

We spend so much time, effort and money attracting a new client, then more getting the property leased so that it’s generating revenue and then we hand over the property to whichever property manager has the least amount of properties and cross our fingers it all works out.

I realise the last part of that statement is not entirely true, we may also hand over the property to the manager who is looking after that area geographically (yes, I believe we’re still crossing our fingers).

I’ve worked with many business development managers and property managers in my time and must have asked these questions 1000 times – ‘what does your client really want from the investment and therefore you?’ and ‘who is the best person in the agency to give that to that particular client?’

In preparing to speak at Inspire Growth 2016 on the literally titled ‘The Handover’, I questioned something I learned about 15 years ago at a conference. I heard,

‘it takes on average about 17 hours from the time you attract a client to when the property leases.’

This to me has always made sense as to why BDMs generate about 10 properties per month as there is approximately 167 working hours in a month, therefore 167 hours/17 hours = 9.82 (or close enough to 10 properties per month).

But I wondered if this was actually true, so I put a time matrix together to try to work it out. Here is what I came up with (please note, I realise I may have missed something, or put more or less time to a particular task – I’d love feedback on what you got to on timing your next new property).

Action

Minutes

$

 Initial call

20

 

 âœ‰ Follow up email & calendar set

10

 

 âœ” Do pre-appraisal

15

 

 Gather prospectus docs

10

 

 Confirm looking forward to meeting

2

 

  Conduct Appraisal meeting

30 min drive

60 min meeting

 

 Follow-up appraisal

15

 

 âœ” Arrange compliance – smoke alarms, blinds, pool,
insurance policies, 2 sets of keys, etc

60 mins

 

 âœ” Organise For Rent sign

35

 

 Arrange for professional photos & floor plan

3

 

 Write advertisement

15

 

 Upload ad to net

5

 

 Take inquiry calls

30

 

 Arrange inspection

5

 

 Arrange keys, applications, signs for the day

5

 

Conduct Open

30 drive

5 min pre open

30 min open

 

Give sms feedback

1

 

 Prepare feedback report

10

 

Give feedback call

5

 

 âœ‰ Confirm call in email

5

 

 Change ad on net

3

 

 Take inquiry calls

30

 

 Arrange inspection

5

 

Arrange keys, applications, signs for the day

5

 

Conduct Open

30 drive

5 min pre open

30 min open

 

Give sms feedback

1

 

 Prepare feedback report

10

 

 Give feedback call

5

 

 âœ‰ Confirm call in email

5

 

 Receive application

5

 

 Vet application

45

 

 Contact owner for instructions

10

 

 Put instructions in writing

5

 

 Contact Tenant to advise accepted

5

 

 Put instructions in writing

5

 

 â¬‡ Take down rental ad

1

 

 Remove sign

35

 

 Arrange induction documents

20

 

 Conduct Entry Condition Report

120

30

 

 Receipt rent & bond

2

 

 Induct tenant

45

 

 Follow up ECR

2

 

 Check ECR

5

 

 TOTAL

14.5

$435

I made the assumption that it would take three inspections to rent the property. If it’s difficult to let the property where you are (which many areas are experiencing higher than normal vacancy rates with oversupply of units in particular), then you will need to factor in extra time. I also only allowed for the processing of 1 application. I also didn’t put any prospecting time in.

So as you can see, I got to 14.5 hours. Now, if the average wage is approximately $50,000 (+20% on costs) for a property manager – that equates to approximately $30 per hour. 14.5 x $30 = $435 – or very close to the national average rent for a property and approximately 27% of the annual management fee revenue.

Screen-Shot-2016-09-22-at-11 05 01-AM-9-1024x434

When you consider that over a quarter of the annual revenue is lost prior to management making you any money, you realise that holding that management to ensure you recover any costs is vitally important (please note, I realise you would normally get a letting fee which covers this – but the letting fee doesn’t then cover acquisition cost – so whichever way you calculate it, you’re losing money if you lose the property during the handover phase).

I asked the audience do they know the acquisition cost for a new management? No-one put their hand up. The easiest way to do this is to add up all of your business development costs (BDM, Marketing, Events, Leasing Consultant’s time etc) and divide it by how many new managements you secure in a year.

So if you spend $100000 ($80,000 incl commissions on a BDM and $20,000 in marketing and referral commissions) on business development and gain 100 new managements gross, the cost of acquisition is $1000 per property.

We see it typically between $1000 – $1500. Now, tally the $435 + $1000 and we’ve almost spent the entire first year’s revenue on acquiring a property….Now how important is it to ensure the handover is right and the property manager retains the relationship? Critical!

So, who should be managing who?

Firstly, stop the eenie meenie miney moe! We all know that people will do business with people they trust. It’s unlikely that a property manager will gain trust from someone who just doesn’t ‘click’ with them. You know when you meet someone and something is just ‘off’ and it’s not really either of your faults – you’re just different people? We have to begin matching our clients with the right property managers.

The first step is to understand who our client is and what they’re looking for. The good news is, as per our last blog, Apmasphere has conducted research to profile Landlords. There’s 4 types of Landlords and all of their wants and needs are laid out in ‘Numbers Game’ by Ben White (which you can download free here)

__ And, there’s also an example of a ‘Client Needs Analysis’ here too.__

Imagine if your property manager is the type of manager where it’s ‘my way or the highway’ and you match them with the ‘Private Client’ who is very specific about their wants and desires. Or, imagine if you match a property manager who can’t make decisions well with an ‘Outsourcer’ who’s looking for someone to take care of everything for them? It’s a ticking timebomb.

Not only will taking this approach assist with client retention, but it will assist with recruitment down the track. Do you have the type of personalities in your business that you need to attract the particular client you’re after?

One last thing to get right.

It’s all about process once the right person is looking after the client. Within every BDM checklist I’ve ever seen there are things like, ‘add the property to realestate.com.au’, ‘put up a for rent sign’, ‘arrange pool certificate’ etc…but rarely there’s a communication plan for the client. Following, you’ll find a checklist example you can use for the first 30 days post signing the management agreement (I really think you should think about the first 90 days). Arguably, the most important thing on any checklist is the client communication points.

New business Touchpoint Checklist
First 30 days

Contact
Type

✔

Who

When

Introduction phone call
from Property Manager

       

Introduction phone call from
Business Owner/Manager

       

Send owner copy of advertisement

✉

     

Advise owner when the first inspection is

       

Feedback prior to first inspection

       

Feedback after first inspection

 & âœ‰

     

Application received

       

Application vetted

       

Application approved

       

Tenant has paid 2 weeks rent & bond

       

Tenant has signed tenancy agreement
and taken keys

       

Tenant has returned entry condition
report & moved in

       

Maintenance required

✉

     

Maintenance completed

 & âœ‰

     

Statement account checked with owner

       

30 day feedback call from
Principal/Business Manager

       

Survey sent

       

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