Elite Agent: Do you think that technology will erode the place of the property manager? If not, why not?
Richard Bray: I don’t think it will erode the place of a property manager. It will make real estate agencies more efficient, so they won’t need as many staff. It will allow property managers to have more streamlined, less stressed roles. Property managers use many programs which do not speak to one another; technology will systemise, integrate and streamline processes for them and their tenants, making the whole industry less stressed.
Nerida Conisbee: I don’t think it will replace the place of the property manager. There’s always a need to have personal interaction when people are dealing with large-scale investments, whether that’s buying, leasing or managing an investment. Technology will always lead to change, making it easier for people to report issues with their properties. But there’s always a need for someone to actually deal with the issue at hand in property management.
EA: Based on your research findings, what is the most critical aspect of promotion that a property management department or individual property manager can do to bring new clients on board?
RB: Research shows that local area expertise is critical. A property manager or agency can demonstrate value by showing how much they know about the area – whether that’s the amount of time they’ve traded, or how involved in the community they are. If they can demonstrate their understanding, that’s what landlords want.
NC: The things that people like most about good property managers is that they are communicative and professional. They’re responsive, they return calls, they fix things quickly. Having local knowledge is also very important.
Fees are also an issue. We found that most people were pretty happy with the amount they were paying, but you don’t want fees to make using a property manager unaffordable.
EA: What do landlords view as the biggest disappointment in their property manager / tenant relationships?
RB: Communication. Landlords are expecting property managers to be like an employee they’re investing in. When they don’t get a fast response back, or they feel like they’re left out of the loop, they’re annoyed.
Everyone’s different when it comes to communication. It’s important to try and understand the kind of landlord they are – whether it’s their first investment property and they’re really concerned about everything, or whether it’s their tenth and they’re happy for their property manager to go ahead and get maintenance items fixed without calling them.
NC: I would say it’s communication – or a lack of it. That’s something a lot of property managers can rectify. If you don’t respond quickly to issues, that can become a problem for investors. Things don’t need to be resolved straightaway either. There’s a misconception that to be a good property manager you need to fix a problem quickly. Often things can’t be fixed quickly, but what you can do quickly is communicate: talk to the landlord, talk to the tenant.
EA: What did landlords appreciate most?
RB: Follow-up. If you say you’re going to do something, come back and tick it off. If something needs to be fixed, loop back with the landlord to confirm that maintenance has been completed.
NC: Specialist knowledge of the market and of their property is critical to landlords.
EA: What is the principal motivation behind investors selecting property ownership?
RB: Bricks and mortar is something that landlords seem to understand. Landlords will often live in the area they buy in; they consider it a good area, so they’re using logic to invest. The sharemarket is a much riskier proposition. Landlords feel somewhat educated in property, rather than going on to learn the machinations of a whole new marketplace which is comparatively volatile.
NC: There’s lots of reasons – one of them is that we’ve seen really good returns for property. Although yields have been low for some cities, we have seen pretty good capital growth overall. Looking at it from a total returns perspective, residential property has done pretty well. There’s tax incentives like negative gearing to take advantage of, too.
People like property because they can touch it and feel it – they feel as though they have some control over it. If you’re investing in BHP as a small investor, you’d have very little ability to impact the performance or direction of the company. If you’ve got your own property you can renovate, change tenants, change property manager – you can improve performance in a number of ways.
EA: Do you think landlords are generally socially responsible in their relationship with tenants?
RB: It really comes back to property managers educating their landlords. If landlords are attempting to do maintenance themselves, this can come at a cost. If their Uncle Kevin is coming to fix the heater but can’t attend for two weeks, their tenants are going to think about moving. The landlord needs to treat the property with care, and the tenants in turn will also care for the property. The property manager bears the responsibility for having that tough conversation and putting their landlord back in place.
NC: I think most landlords are pretty good. Many want to treat people respectfully. The average investor wants to make sure that they have a good tenant who looks after the property rather than someone who pays more rent.
EA: What’s the most interesting piece of information from this research?
RB: What surprised me was the amount of multiple investment properties that landlords own. One in three owns multiple properties. Of these, 47 per cent use different property managers. This is a huge opportunity for property managers to win new business by having a simple conversation. For national franchises, there’s also an opportunity to keep managements within their network.
The other interesting factor was about technology. We asked landlords if they had two agents to pick from – one who used technology extensively and the other who didn’t – which they would choose. We found that 92 per cent would pick the agent with technology.
NC: People are pretty happy with the property managers they use; 72 per cent of respondents felt property management services were good value for money. Quite a few people don’t use property managers – well over 10 per cent of landlords – but whether that’s because they don’t like using them, because they have a great relationship with their tenants or because they have the time to manage the property themselves is unknown.
Richard Bray shares more of his insights on landlords’ needs and wants in our Property Management Transform coaching series – click here to watch his coaching session.