Property management has a quality problem.
Not a perception problem, rather, a fundamental, business-model problem that starts the moment an agency signs a client they shouldn’t.
Hayley Mitchell has watched it play out for twenty-five years.
The founder of Mitchell Property Training, who has recently joined the Podium PM Team as State Leader, has a simple diagnosis for much of what ails the industry right now – too many agencies are carrying too many bad properties, at too-low fees, for owners who were never the right fit in the first place.
“Not all business is good business,” she says.
“You’ve got to be able to pick and choose what you want to work with.”
Everything else, the burnout, the staffing shortages, the wafer-thin margins, often flows from that one point.
The rent roll quality problem nobody wants to talk about
When Hayley surveys the current landscape, one problem stands out above all others.
“There’s a real quality issue,” she says.
“A lot of agencies just put on bad clients with bad fees and properties that they shouldn’t be representing.”
The economics of this are brutal and somewhat hidden.
A property generating $100 a month in management fees sounds like revenue.
In practice, Hayley says, it doesn’t come close to covering the true cost of managing it, once you factor in wages, technology subscriptions, insurance, and workers’ compensation.
“The cost to run the business is so much more than it used to be, but fees and rents haven’t kept up with that.”
The consequence is a familiar squeeze, and to hit breakeven, property managers are handed bigger portfolios.
Bigger portfolios without proportional resources mean burnout. And burnout means the talent pipeline empties faster than anyone can refill it.
“So until we get some quality in the industry, meaning properties, fees, and services, we’re going to be just running to try and keep up and not delivering what we need to be delivering.”
When PM becomes a sales funnel
Part of the problem, Hayley believes, is structural, rooted in how many agencies have historically viewed their property management departments.
“There are agencies that want PM to just feed leads through to sales. They don’t really care what it’s doing.”
In these businesses, the rent roll exists primarily as a future pipeline for sales listings.
Fees and portfolio quality are secondary. Volume is what matters.
Hayley has seen this play out at close range.
“I’ve worked for directors before that have said, ‘I don’t care what you sign it up at. Just get the property on the rent roll so that we can sell it one day.'”
She acknowledges the model has evolved.
“That has changed over the years, and it has got better.”
But the legacy thinking hasn’t disappeared.
She still encounters businesses managing a thousand properties where the department’s strategic potential goes unrealised, because no one at the top is paying real attention to it.
“You’ve got a massive rent roll of a thousand properties, and you’re not doing it right. If you could do so much more here, it would actually feed better into your sales, but they just don’t care.”
The irony is that the agencies most dismissive of property management as a discipline are often leaving its greatest benefits on the table.
Landlords are voting with their feet
Against this backdrop, Victoria’s rental market is experiencing something that goes beyond a staffing issue.
Landlords are leaving, and the numbers are stark.
Hayley describes a colleague who, in the past twelve months alone, lost 80 properties from a rent roll of around 320.
“That’s a third of her business that’s gone and walked out the door. And there’s actually nothing she can do about that, because they’re just not wanting to be landlords anymore.”
The drivers are well-documented in Victoria with land tax increases, expanding minimum standards, compliance obligations that continue to grow.
The client selection discipline
So what does a better path look like?
For Hayley, it starts before the management agreement is signed.
On new properties: “Make sure that it meets all the requirements. If you sit there and go, you need to do this, this, and this, and the owner says, ‘I’m not doing that’ – don’t sign them up. Walk away.”
On takeover managements, she urges agencies to resist the pressure to grow at any cost.
“Instead of blindly saying, ‘No problem, I’ll take it on’ – do your research first.”
She’s seen too many colleagues inherit the consequences of someone else’s client-selection failures, mistaking a bad owner for a bad agent.
“Often an owner will say, ‘I need a new agent, my agent’s crap.’ But when you look at it, the property’s in terrible condition, it hasn’t been well maintained, the tenant’s terrible. It’s not necessarily the agent that’s done the wrong thing.”
The discipline she’s describing requires agencies to be comfortable saying no, and to understand that growth built on the wrong clients isn’t growth at all.
“A bad owner, a bad property, a bad tenant. You are never going to win. You’re going to work hard and not get a good result for anyone.”
Her own rent roll, she reflects, was largely problem-free and not by accident, but by design.
“I worked with people that were good and wanted us to do a good job, and we did a good job, and they did what they needed to do.
“It was easy. It’s hard when you get it wrong.”
What needs to change
Hayley has a simple solution.
“Walk away from owners that don’t have properties you want to represent,” she says.
But she also wants to see a shift in how the industry thinks about its own departments.
Property management treated as a strategic asset – not a side project, not a compliance burden, not a mechanism to generate sales leads – starts with leadership deciding it matters.
“Agencies need to have a really good focus on their property management departments and not run them as a side hustle.
“They are just as important as sales.”