To read more about REA’s key findings on landlords’ needs and wants, read about their LandLord Research Report by clicking here.
00:00 Introduction by Samantha McLean
I’m going to focus today on three key areas. The Landlords’ Insights information that we did a few months ago. I’m going to touch on a few of those. We did present some of this at ARPM. Also tenants, what they are doing on our site, on the rent section of the site. How they behave, what they are doing, how they search and so that you make sure that you are appealing to them and answering their inquiries and everything there.
Then the last we are going to touch on; streamlining the rental processes so just a few bits of software or a few tools that I’ve seen, and that I really love and think if I was a property manager that would be the first things I would embrace. I have done a bit of background check on your agencies on what tools you do use. What we find is most people use these tools but they use about five percent of the capacity of the tools. They don’t use all the things. Because they either have just picked it up and as they have gone or have never gone back and got retrained.
I’ll again tease you with some of the features so the take out will really be, if you are not a hundred percent over all the features of these products, get more training on it. Get the account managers back to it so you can get the most out of these things.
So first one is landlords. This is now we are going to go through some of that research piece. This was done back in, May I think it was, and we threw it out there to about seven thousand people nationally and then we had between about 1000-1500 people come back saying, “Yes I’m a landlord and I’ve gone through the process recently”. Super relevant research, which is really good.
Just as the market stat: in Australia, there’s about 9 million dwellings and 3 million of these are rentals. You are talking just over 33-34% of the market. If you look at the Roy Morgan moving data of what the activity of people actually moving home. It’s got about 1.2-1.3 people moving home and 72% of those are renters.
The volume and the turnover in the market is obviously rent, and from a listings point of view on our site, sales listings are slowly declining, as we know, and rent slowly, slowly increasing. Over the past three or four years, we’ve seen rent increase by 2% with buy listings decreasing around 1-2% nationally overall.
If we now look at why people invest, these are pretty obvious reasons but to reiterate this back it’s because 65% percent of landlords want to grow their wealth. They look at property because the share market is more volatile and they feel a little bit more uneducated in the share market and investing there, where bricks and mortar is something they’ve always known and been around. This is what is the easy go-to.
44% want an income during retirement. There’s all those cruise ships out there that they want to cruise on and have that lovely retirement plan and they want that ongoing income and they can see that property will give them that. Then 33% are doing it because they want to reduce tax.
These are points to reiterate back, especially for the BDM when they are out there. These are the type of things you need to be asking. So you’ve purchased this property, was it to grow your wealth? The more things that you can reiterate back and they agree, then it shows you are on the same page.
This was a really good start and this has been publicised quite a lot after ARPM. There is a lot of talk about disruptors coming to the industry like Airbnb and its people doing self-managed properties but this was a really good research point that 84% of people still want to use property managers and because they consider value for money and they consider you as an employee that’s looking after one of their most important assets.
While you hear noise out there in the market, it’s important to know that, you know, landlords do want to use property managers and I’ll go through some of the reasons why, and you need to make sure that you are always demonstrating those things that they really require while they’d continue to use yourself. 60% said why would they use property managers? For your experience and expertise. Wherever you can show that experience, that’s why they are coming to you.
Why would a landlord choose your agency? This is a really important one especially for the BDM’s and for your marketing. You need to be out there promoting in anything you do or in any of your communication. It’s about your service, it’s about going above and beyond at what you do. Because that’s what they are choosing. That’s what they said. 56% said we’d choose that property manager or that agency for their service.
The knowledge: what they mean here is 47% are saying the knowledge of the local market or where that property is. Again, when you are meeting the landlords, congratulate them. Tell them “well done for buying that house,” because, you know, there is a new railway station getting built around the corner and how good are the new schools? The more you can demonstrate that you know the area, the more that they are going to say, “yes, this person knows everything about this area, I trust this agent, this is who I want to use”. Again it sounds like the obvious but it’s things you forget so you just keep reiterating back, these are the most important things.
Fees: Again, people think that they are choosing you because of your fees. That’s the most important. It’s not. That was the third most important. Fees are, well, they are important, the other two are more important.
Then the marketing. What you can offer and the channels and the areas that you can push it out to, and your database. You really want to talk about that and what makes you unique there with how you can market a property.
This was an interesting question that we threw in there, just based on what Fiona was talking about with tech and who is embracing tech. This came out in the research again because so many agencies look the same to landlords. We’ll go through in a minute about the digital interview and how they shortlist you.
When it comes to when they are sitting in front of you, you really want to demonstrate and be proud of the tech that your offices use and tell that back to the landlords or the potential landlords. We all use iPads here and we do that because it makes us more efficient. ‘I can get back to you,” “I can get you detailed reports,” or whatever it is.
You want to talk about the tech because when we ask this question 92% of people said if two agencies looked nearly exactly the same, and one used technology better, which would you choose? They would choose the one that uses the technology better. Really important, people are seeing technology and using it better, as time efficiency and [shows] how professional you are, so really important.
When we first brought this to market, probably 1 and a half to 2 years ago, we were talking about virtual reality and tech. You get everyone saying, “That’s not going to happen,” people will still come exactly like the car analogy before, people will still come and want to touch the car. They can virtually touch and nearly drive the cars online now.
Some of the computer games out there, it’s nearly better than driving the real thing. When we first came with tech, when we first said about headsets and wearing all the tech gear, what we didn’t really see was all this new stuff that’s coming out, which is augmented reality. Has everyone seen Pokémon Go?
This is where you are not wearing a headset but you are holding your device up to something that has, maybe a smart reader or something that interacts back to your device, so you are not immersed in a virtual reality headset. We are seeing augmented reality taking off quicker than virtual reality.
We were demonstrating it at AREC on signboards so you can hold your phone to a signboard and then the signboard comes alive and the property manager would come to life and say, “Welcome this is 22 Smith Street, now I’m going to give you a virtual tour, come with me”.
She turns and you are holding your phone and you are getting a virtual tour of the property before the person’s even gone online, gone inside, and that really, to me, is where I think this will shift and change. Because people are shopping in your local market all the time. They love the area, they are in the area. They are walking the dog, “Oh, I didn’t know that house was up for rent, let’s go and have a look,” before they even go online. So that to me is where the shift in augmented reality would be.
Well, you know, you are brilliant at advertising properties and doing that. A lot of people don’t invest a lot of money in your company website. So, therefore they are not completely SEO-friendly, they don’t always get found. But you can imagine, with our site, with 60 million visitors to realestate.com.au, when you search for a real estate agency if our site contains that agency (which we have ten thousand of them), Google say they are super relevant, so they push it right up the front. We’ve got heaps of photos and content and people coming every day. The algorithms of Google will pretty much grab your agency’s website and put it up at number one or two above your own websites.
When they click on that link, have a look at the links that they coming into on our site. I’ve got on the screen here on the right-hand side number two, that’s pretty much where they all land. They come into what we call ‘agency profiles’. That’s a short bio on your site. That’s an example on-screen, Pippin & Hall, that’s our demo account. Then it shows all the people in your office. Something that got launched only a few months ago. You probably heard of ‘agent profiles’ that we launch where it’s about the person. We’ve now got ‘agency profiles’ where it’s about the agency.
Make sure you update these and you’ve got good content on there. You talk about your service, your local connections with the local market and how you know it and then make sure each person then has their agent profiles filled out. Because this is where they are shortlisting and interviewing you first, before they pick up the phone or maybe come to any one of your other sites to check you out.
How do they shortlist to find an agency? We then ask the same question. Once you’ve found the agency, what makes a really good property manager? All of these 1200 people use property managers now and the number one thing they said was that their communication skills and their responsiveness.
Responsiveness, how quick you are to returning their calls, to responding to their emails. Exactly like what Fiona said before, you can automate auto-responders back straight away to landlords. You can even set up certain things like Zendesk mail queues, where they can automatically scan and pretty much read emails and you can put it in other tech that works out: does that email address currently exist in our CRM database?’ Yes, it does. Are they a landlord? Yes, they are. And you can go back with a different message rather than a generic message that may go back to tenant inquiring.
There is tech about all that right now that you can do that with. At least you can respond and say “We’ve got your message, we know who you are, Mr Bray, and someone will respond in two hours”, or whatever your window is.
Industry standard is, if you are not responding in two hours, you are annoying the person. Put yourself in their shoes if you are inquiring about something online, say clothes or fashion or a car, whatever it is, or a hotel. If someone hasn’t responded to you in about two hours, you start to go, “What is happening? When are they getting back to me?” Having an auto-responder at least you can set expectations. If you can’t do two hours, put in there, “We’ve got your email, but someone will come back to you this business day”. At least they know.
Number two was knowledge of the local market. Again, in your agency profiles, put in there that you’ve lived in Bondi for ten years. Your favourite café is this. My kids go to school here. You don’t have to put detailed personal details about you but just give a nice snapshot that you understand this market. That’s why they are trusting you. The more you can put in about that is definitely the better.
What makes a good property manager, number three was your knowledge of the tenant and the landlord process. What they mean here is how you can select good tenants versus bad tenants and the due diligence you go in making sure that the tenant is reputable and they’ve got a good job and income and your reference-check them. That’s what they are sort of saying there. That you’ve done, you’ve dotted the i’s and crossed the t’s.
Then number four is attention to detail. Being organised. Harder to demonstrate but, again, when you go back with steps or processes this is what we do. If it is very thorough and details and no spelling mistakes, it sounds quite straightforward, that’s what they are looking for. Because if you are slipping up here then I’m not trusting you with one of our most important assets.
This is a little more detailed and it will be deeper about property managers. 82% consider that finding the best tenants was much, much more important than filling the property quicker. Again, it could be something that, if it’s taking longer for that property to get found and for tenants, communicate back to the landlord. “The reason why I’m doing this, Mr Landlord, is because I’m trying to find you the absolute best tenants.” So be honest and upfront.
75% consider finding the best tenant to be more important than getting the best rental price. Again, a long-term tenant with good history is much better and then 54% said that they prefer couples.
Continue to Part 2 of Richard’s Coaching Session by clicking here.