Getting the sales team and the property management team to work effectively together so they are referring business to each other is no easy task, but Brett Greensill, Principal of LJ Hooker New Farm, has pretty much managed to perfect it. Having started the business from scratch, he and his partner Andrew Clough now manage around 1,000 properties, with close collaboration between the two departments.
BRETT GREENSILL will tell you that anyone who knows Brisbane knows that New Farm “is the best place to be”. On a peninsula just to the north of the city, New Farm is easy to access, close to the airport and has the beauty of being surrounded by the banks of the Brisbane River. “It’s a very desirable property”, he continues. “It also has a village heart. We often refer to it as the Village, meaning that you could, quite frankly, live, work, and play without leaving the suburb, if you wanted to. Many people do. Over the years it’s transitioned from migrant community to urban renewal, and now has a slight socialist leaning that’s left over from the ‘50s and ‘60s, but clearly upwardly mobile.”
How long have you been in the area? “I’ve been a real estate agent since 1999, been working the New Farm area since 2001. I’ve lived in the area since 1993. So it was a natural progression for me. In the beginning I worked for a local company called Kuceli Real Estate which had been around for 40 years. The principals of that business ended up selling the rent roll to Andrew Clough, who was at the time the Principal of the Professionals office. I was ready to start on my own, looked around and applied to LJ Hooker to get a franchise, and this office ‘officially’ began in 2006; and I started from scratch. Things have now come full circle, in that Andrew and I merged our businesses this year and now we are 50/50 partners in this business.”
So you started completely from scratch? “We did bring across the sales staff from Kuceli,” says Greensill, “plus I had a pretty good local market share in sales. My administrator, Andrea Bailey, who is now my Head of Sales, was with Kuceli – we’ve worked together since 1999. Back then we made a conscious decision just to focus on sales. I had an excellent relationship with another local property management business; we had a deal that she would refer her sales to me and I would refer her managements. We were across the street from one another so it worked really well for about three years.”
And then? “Then I guess it became a bit of a client-driven thing; I had a couple of clients say that they really wanted to continue working with me and it was really hard to say no. The thought of losing the client, or losing the business; I thought, ‘Right! It’s time to get started!’”
“When I think back, we got to 60 or 70 managements very quickly, no problems, no impact on sales. Then we got to 100 or 120, and again it was pretty easy to keep doing that with one property manager; we upgraded our software and kept going. But then when you get up over that 120 mark you have to get more serious. Now we have approximately 1,000 properties under management; it’s now a business unit on its own, operating independently with six property managers.”
How do you manage such a big rent roll? “We currently run a hybrid pod/portfolio model. I know the current word is ‘pod.’ Sometimes the labels make it quite difficult, and usually most offices will run with a combination of what works for them, because there isn’t one size that fits all solutions. In New Farm, for example, parking is a problem; and while you may not think that’s a big deal, when you have multiple people driving round and around looking for a car park for half the day it does become a bit of a drain on productivity. So to counter this we have an outside contractor – ie just one person doing routine inspections.”
For the merged business, the sales department and property management departments are in different buildings running as separate businesses, and yet Greensill is well known within the network for how well they operate together. I ask him what is his secret to success with this.
“I love that question!” Greensill laughs. “Now just let me reflect on Arthur Kuceli, my first boss. Back then, the PM and sales departments were in the same building but with a corridor running between them, and I remember him running up and down yelling ‘Communication! Communication! Communication!’ because something had happened where the departments hadn’t talked to each other. And I remember that lesson today, even as I’m talking to you about it now.”
“The answer is to have good communication. Sales people will say that the property managers aren’t very good at that, and the property managers say the sales people are just hopeless. So there is a natural problem there and the only solution for the business is to have a good communication policy.”
Greensill continues, “I think that salespeople do need to have relationships in their focus market areas with the landlords who are on our books. Now a lot of principals, I note, spend a lot of their time holding the sales people away from their rent roll, which I think is a short term and slightly naïve, protectionist view that doesn’t work! Because they’ll get it anyway, and they won’t do it with your blessing. It’s like prohibition. Prohibition never works in the industry.“
“If you can create that environment where property managers, the financial services consultant, we as principals and the salespeople all have a relationship with the client, you’re more likely to retain the client within the business when one of those people goes than if you’re relying on only one point of contact. If you diversify the relationship with the client as broadly as you can through the business, you are in fact more likely to retain the business.”
“But you also have to explain – so that’s it’s clear in the salesperson’s mind – that it’s not a free kick. So firstly, if the referral comes from PM, they must pay a levy for that, but also they need to acknowledge that for every one opportunity that comes out of the office they really need to be bringing others back in, in order for this machine to continue to deliver a result for them.”
“We are also very honest about it. For example, we bank with Macquarie. Funding from Macquarie Bank relies on our rent roll being strong and healthy, which in turn guarantees employment and cash flow. So if we’re going to give the sales team access to the rent roll, then we need to have something come back in, and it can’t just be money. It’s also got to be managements. So the Property Management BDM actually sits with the salespeople, and that’s one way we can ensure that the salespeople can give those leads back to us, so that we can then replace that with others.”
If you could look back on your growth journey, what advice would you now give yourself starting out?
“Look, it’s the same advice I’d give anyone going into business. There are two ways to make money, in my observation, and I wish somebody had told me this. You either stay small and keep your overheads low, because you can make a good income. Or you grow as big as possible as soon as possible, going all out in order to get there, because there’s nothing in between. And I suppose I learned that the hard way, and I’ve observed it many times; but you can clearly see that one or either of those works very well. So if I was starting a rent roll again I’d be looking at either merging or buying, as I have now done, in order to get as big as possible as soon as possible.
“Also, there is one other thing I would say. You can’t do it by yourself. This notion that 100 per cent of something is worth more than 50, or 25 or any other percentage of a much bigger, more profitable business is nonsense. And that, unfortunately, is also a bit counter-intuitive, because salespeople mostly become principals. I did myself, and I’m obviously not putting myself in that category, but often it’s a salesperson becomes a principal and the rent roll is just not integral to their business. It’s just another thing that they pay as little attention to as possible but can take to the bank.”
“We completely don’t subscribe to that. We believe in offering a whole service, and focusing on the rent roll growth for the stability that it gives your income and the reach that gets into people’s lives, because this is how you help more people. That will, over the long term, sustain you better.”
Brett Greensill will be speaking at this year’s Ideas Exchange.