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Not all business is good business

We spend so much time at work, we spend so much money in business and we all know life is short.

A senior property manager recently told me about a prospective new client landlord who was belligerent and difficult to deal with from the get go. She wisely advised it would be best to go to another agency as I cannot see us having a successful business relationship. This has got me to thinking… hence this blog.

The adage ‘not all business is good business’ is by far not new; however, in this ever-increasing competitive business world, many of us are almost desperate for new business. I make this generalised statement based on the ‘drum’ that constantly gets beaten “grow the rent roll’. Whilst I agree wholeheartedly that every day businesses should be looking for new business opportunities (as I do in my own business), I do ask in the world of property management, at what cost is this being done?

There has long been a concern for staff in the property management industry and retention of staff. The costs of recruitment are substantial for most business plus the cost whilst waiting for the ‘right person’ to come along. It is interesting in my privileged position to note a trend in portfolio management of decreasing portfolio sizes; 5 years ago, it was common in my view for property managers to manage from 180 to 220 properties, however this trend seems to be on the demise. Lesser numbers seem to be on the increase which I believe to a wise decision. As more and more statutory demands are placed on landlords, property managers have more legislative obligations to manage. All service industry has long had issues with poor customers; property management also has its fair share. Abuse and unacceptable behaviour not just from tenants but also from landlord clients.

It must be said that most landlords and tenants are good people however we all know there is always someone or some people who are outright unreasonable, demanding and difficult to deal with. This could be they have had a ‘bad day’ and take it out on others; more so, the experiences of many are a history of this poor and unacceptable behaviour.

Given the issues that are far from new are staff recruitment, retention, stress and burn out in the real estate industry, it was refreshing to listen to the senior property manager decide that the business of the landlord was not wanted.

I believe the role of a career property manager/tenancy manager is three-fold in general;

  • Income retention (look after what we have)
  • Income growth (new business)
  • Income producing (activities that produce income).

We may want to grow our businesses but not to the detriment of our staff and their mental health plus their job satisfaction (from a business perspective this could lead to business cost). Think of all the time we would have to service our existing clients and seek excellent new clients if we say ‘enough is enough’ to the clients that are costing us money, and sometimes costing businesses more than money.

Vacant property reports and dealing with vacant property

Best practice advice

The following information is from chapter 4.5 Vacant property reports and dealing with vacant property of the Property Management Excellence (PME) manual 

When a rental property is vacant, lessors can be most vulnerable. They are vulnerable for a number of reasons which include the stress of not having rental money to assist in paying their mortgagees and also they are also in a position where unethical agents may target them in the hope of gaining their business. This could result in the agency currently managing the property losing the business.

It is important that property managers have utmost empathy with lessors during this period and that regular contact is made with the lessor. Sometimes making contact can be difficult if there is no or little feedback to provide. Contact with no feedback for the lessor is better than no contact with the lessor at all. If the lessor does not hear from the agency during this period, it would be quite common that they may believe that nothing is being done by the agency to rent their property.

A recommended procedure for vacant property is that lessors are phoned at least twice a week and provided feedback as to what is happening with their vacant property. Ideally the lessor should be contacted every day where able. The lessor is recommended to be contacted prior to showings and inspection appointments and after any showings of the property.