THRIV­ING IN A TOUGH LEAS­ING MAR­KET

WITH VA­CANCY RATES creep­ing up across the coun­try, prop­erty man­agers have been seek­ing help – not just to find ten­ants for their own­ers – but to learn to thrive in what feels like a tough mar­ket. If you are sens­ing a change in your area, there are plenty

Elite Property Manager - - Front Page - Story by Her­mi0ne Gar­diner.

SUP­PLY AND DE­MAND; a prop­erty is only worth what some­one is will­ing to pay for it. The chal­lenge is that, for years in the most part, rents have con­tin­ued to rise grad­u­ally. Own­ers ex­pect the same or higher rent each time and, when a va­cate no­tice comes across our desks, we of­ten sim­ply list at the same price or higher, be­cause that’s what we’ve al­ways done – of­ten with­out de­tailed thought on the cur­rent mar­ket, such as:

• What is avail­able and com­pa­ra­ble?

• Cur­rent va­cancy rates and days on mar­ket?

• What have prop­er­ties leased at, not just what is ad­ver­tised?

• What newer de­vel­op­ments have af­fected

the price of this prop­erty?

• What sort of ten­ant de­mand is there in this area for this kind of prop­erty?

• Has the sales mar­ket had an im­pact on peo­ple choos­ing to buy in­stead of rent? What­ever the rea­sons, if we want to get these prop­er­ties leased faster and min­imise the risk of the land­lord tak­ing their busi­ness else­where, I be­lieve we need to start mak­ing it our job as the owner’s prop­erty man­ager to be far more across all of this knowl­edge. To sup­port them in mak­ing smart in­vest­ment de­ci­sions in pric­ing from the start of the leas­ing process, well be­fore the prop­erty be­comes va­cant.

We also need to learn how to share this knowl­edge with them as the in­dus­try ex­perts and work along­side them, not just tell them what they should do with­out ed­u­cat­ing them and then won­der why they don’t lis­ten.

Ideally, we should be ed­u­cat­ing them on the true prop­erty value; not just at the va­cate phase, but regularly through­out the ten­ancy so there are no rude shocks or sur­prises, mak­ing our job eas­ier when the time comes.

How we do this de­pends on the data and sta­tis­tics we track from both within and from out­side our own of­fice. Weekly, monthly and an­nu­ally we should be track­ing mar­ket data for our core area, such as av­er­ages across days va­cant, days on mar­ket, ac­tive ten­ants search­ing, av­er­age rents, in­crease or de­crease on past rents and prop­er­ties avail­able.

If we track this data, even when it is a great mar­ket and things are leas­ing well, it will form an im­por­tant com­par­i­son point for those tougher times. It could even pro­vide a point of dif­fer­ence for our prop­erty man­age­ment ser­vice.

Here are some things we need to re­mem­ber to make our lives eas­ier when try­ing to avoid high va­cancy.

SHIFT YOUR MIND­SET

• We are in­ter­preters of the mar­ket; we don’t dic­tate the mar­ket. When speak­ing with own­ers we must re­move the fear they are go­ing to blame us, get up­set or leave us. It is not our fault if the mar­ket has changed. • Shift our lan­guage to be­come their part­ner

in prop­erty man­age­ment. Change your

WE ARE IN­TER­PRETERS OF THE MAR­KET; WE DON’T DIC­TATE THE MAR­KET. WHEN SPEAK­ING WITH OWN­ERS WE MUST RE­MOVE THE FEAR THEY ARE GO­ING TO BLAME US, GET UP­SET OR LEAVE US.

lan­guage and di­a­logue to ‘we’ and ‘us’, not ‘you’ and ‘yours’. Shift the di­a­logue from ‘rent re­duc­tion’ to ‘rent ad­just­ment’.

BE THE EX­PERT

• Track sta­tis­tics in­ter­nally – work out what needs to be tracked daily, weekly, monthly, and an­nu­ally. • Share with the team – de­ter­mine how we share and dis­trib­ute this data with the team, not just the leas­ing con­sul­tant. Prop­erty man­agers, new busi­ness and even sales may need to know too.

• Ed­u­cate ex­ter­nally – teach our own­ers about the mar­ket with news­let­ters, com­pa­ra­bles and leas­ing re­ports.

OVER­COME BAR­RI­ERS TO LEAS­ING

• Con­di­tion of the prop­erty: can’t get the owner to up­date the prop­erty? Help your own­ers to ar­range a pay­ment plan with con­trac­tors, sug­gest re-fi­nance, and re­mind them we can deduct from rent. Next time, plan ahead and help the owner bud­get in ad­vance for up­com­ing ren­o­va­tion works.

• En­sure mar­ket­ing has pro­fes­sional photos, good copy and stays at the top of the search re­sults. Ten­ants rarely search past page one, and of­ten won’t en­quire if they can’t find the in­for­ma­tion they need.

PRIC­ING

• True pric­ing strat­egy from va­cate no­tice – if the prop­erty is not worth what it was last time, give own­ers the truth about the mar­ket and don’t sugar-coat it. Help them make the best de­ci­sion to en­sure min­i­mal va­cancy.

• Of­fer pric­ing op­tions – for ex­am­ple, $550 to get it leased fast with min­i­mal va­cancy, $600 for an in­ter­me­di­ate re­sult and $650 to be wait­ing longer for the right ten­ant with a risk of higher va­cancy.

• Pre-frame price ad­just­ments – if you are pric­ing above the mar­ket, agree what the next price ad­just­ment will be and by when. Do this in ad­vance, and it will take less time con­vinc­ing them later.

• Pre-ad­vise of mar­ket shift – when you see a dip in en­quiry lev­els, share the pre­dic­tion in­stead of wait­ing for the Satur­day open and hav­ing no one show up.

PROAC­TIVE LEAS­ING

• Old school mar­ket­ing – this can still work to cap­ture pas­sive renters in the mar­ket, those who aren’t look­ing online but could be in­ter­ested in the prop­erty in the lo­cal area. For this rea­son let­ter­box drops and sign­boards still work.

• Treat ten­ants like buy­ers – keep a ten­ant data­base and work it. If you use an online book­ing sys­tem, use the data cap­tured from this and get on the phones; don’t just wait for the ten­ants to book.

• Of­fer flex­i­ble view­ing times out­side of the set open for in­spec­tion on Satur­days.

• Con­sider how you are pro­mot­ing through e-mar­ket­ing and so­cial media – Face­book of­fers great tar­geted mar­ket­ing to the de­sired tar­get mar­ket.

ON­GO­ING UP­DATES

• Send a weekly re­port to ed­u­cate the owner. For each listed prop­erty, con­sider pro­vid­ing sta­tis­tics on days va­cant, days on mar­ket, page views, en­quiries, in­spec­tions, ap­pli­ca­tions, price ad­just­ments and lost rent while va­cant.

• Don’t rely on email. Get on the phone at least twice a week. If the prop­erty has been va­cant over two weeks, in­crease that to four times a week. If over four weeks va­cant con­sider be­ing on the phone daily.

BRING THE OWNER INTO THE JOUR­NEY

• Where pos­si­ble, take the owner online, ask them to pre­tend they are a ten­ant search­ing in that price bracket and lo­ca­tion and get them to tell you what they see.

• In­vite the owner to the open for in­spec­tion; it can be quite pow­er­ful to stand in a quiet apart­ment for 20 min­utes with no one com­ing through to show what the mar­ket is re­ally like out there.

BREAK IT DOWN

• Pro­vide the owner with a cost anal­y­sis of rent ad­just­ment vs stay­ing the same over a 12-month pe­riod and what that dif­fer­ence means in an­nual in­come.

• Share a case study of another pos­i­tive re­sult in shift­ing the price, or a neg­a­tive re­sult in not ad­just­ing the price. So­cial proof can work won­ders.

LAST RE­SORTS

• Where pos­si­ble, get face to face for a meet­ing; if they are not in your area, re­quest a Skype meet­ing.

• Di­rec­tor call. Get the man­ager or di­rec­tor to call and let them know that as an agency we are con­cerned that their prop­erty is not leas­ing. Some­times the se­nior per­spec­tive can help get them around, and show the se­ri­ous­ness of sit­u­a­tion.

• Ask the owner ‘What more do you think we could be do­ing to lease the prop­erty?’

The last one is my favourite, but of course only to be asked if you are sure you have done ev­ery­thing you can do to get the prop­erty leased. Now, af­ter read­ing this, you can ask your­self: Have you re­ally done ev­ery­thing?

HERMIONE GAR­DINER has been part of the real es­tate in­dus­try for over 11 years. From Residential Prop­erty Man­age­ment to Ex­ec­u­tive Leas­ing, New Busi­ness and Team Man­age­ment – she has suc­cess­fully man­aged a broad range of clien­tele and suc­cess­fully de­vel­oped and de­liv­ered on New Busi­ness Growth plans and con­cepts. Hermione is also part of the Real + team and will be speak­ing at ARPM 2015. For more info and to book tick­ets visit arpm2015.com.au.

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