It’s fair to say the past few years have been tough for property management. Between changing legislation, talent shortages, and the great resignation, it’s a sector beset with challenges from all sides.
But still, that rent roll can be an incredible asset to a business. It offers an ongoing income, provides valuable leads to the sales department, and is the going concern that gives an agency value when it comes time for the business to sell.
Complex to run
Tony explains a property management department can be notoriously complex to run.
“You’re dealing with people’s homes and their assets and stuff goes wrong and you’ve got to have a deep level of expertise and be really responsive in what we describe as those ‘moments of truth’,” he says.
Tony notes over recent years the compliance burden for property management has increased, a talent shortage means finding great property managers and retaining them is a challenge, and the marketplace has become increasingly competitive.
“What we find is that there’s often not a lot of differentiation between local real estate agencies, so they end up competing on price and that obviously impacts on margins,” Tony says.
In the process, scaling a rent roll can be difficult, with narrow profit margins.
“A property manager with a portfolio might handle 120 properties. But if they’ve only got 80 in their portfolio, they’re underutilised, so the costs are higher than they need to be,” he reflects.
“On the flipside, if they’re managing 180 properties, then the business is under-resourced, you’re probably not delivering a great service and the property manager will probably burn out as well. So that sweet spot is pretty narrow.”
For many agency owners, the rent roll is the asset that they can borrow against in their business. It’s also a key component of any business sale.
That makes it an asset worth protecting and investing in, Tony explains.
Ideally a PM department also provides leads for the sales business, but if the service isn’t up-to-par, landlords sell their property elsewhere.
“So that’s a real opportunity missed if you’re not running that part of the business well,” he explains.
Earlier this year, :Different for Agencies was unveiled.
The model is an all-in-one solution where the agency retains ownership of the rent-roll, but :Different manages it.
“The proposition to agency principals is really simple,” Tony explains.
“You own your rent roll and grow it without having to manage it. We take a percentage of the property management income for delivering the property management service and leave the agency with an agreed margin.”
Tony says :Different for Agencies includes two key elements: technology that improves workflows and processes, and a team of dedicated property managers who provide the human touch.
:Different’s technology is built for purpose, with customisable workflows and processes that are designed to support great customer service.
But it’s not just about tech, Tony stresses.
“Tech can’t do property management on its own,” he notes.
Key to the offering is a team of dedicated property managers, known as Property Partners.
“In our business, Property Partners are heroes,” Tony says.
“They solve problems in moments of truth for tenants and landlords.”
Meanwhile, :Different also has a team of experts in compliance, leasing, maintenance and trust accounting, which the Property Partner can utilise at any time.
The ultimate outcome is the agency owner can concentrate on growing their rent roll and optimising it, while :Different for Agencies takes care of all the day-to-day tasks associated with property management.
:Different for Agencies has been up and running for a couple of months, and Tony notes the reception from the industry has been very positive.
“The agency retains ownership of the rent roll. They really focus on nurturing positive relationships with owners and growing their sales and rental business,” he says.
“And that’s what most agency principals want. They don’t want the distraction of property management, but they want to retain the asset that’s important to them.”