LAND­LORDS: WHAT THEY RE­ALLY, RE­ALLY WANT

IF YOU’RE A PROP­ERTY MAN­AGER, you prob­a­bly think you've got land­lords' be­hav­iours, mo­ti­va­tions, likes and dis­likes pinned down. How­ever, vi­tal new re­search con­ducted by realestate.com.au on land­lords' needs and wants chal­lenges those stereo­types. Iolanthe

Elite Property Manager - - Contents -

Elite Agent: Do you think that tech­nol­ogy will erode the place of the prop­erty man­ager? If not, why not?

Richard Bray: I don't think it will erode the place of a prop­erty man­ager. It will make real es­tate agen­cies more ef­fi­cient, so they won't need as many staff. It will al­low prop­erty man­agers to have more stream­lined, less stressed roles. Prop­erty man­agers use many pro­grams which do not speak to one another; tech­nol­ogy will sys­temise, in­te­grate and stream­line processes for them and their ten­ants, mak­ing the whole in­dus­try less stressed.

Nerida Con­is­bee: I don't think it will re­place the place of the prop­erty man­ager. There's al­ways a need to have per­sonal in­ter­ac­tion when peo­ple are deal­ing with large-scale in­vest­ments, whether that's buy­ing, leas­ing or manag­ing an in­vest­ment. Tech­nol­ogy will al­ways lead to change, mak­ing it eas­ier for peo­ple to re­port is­sues with their prop­er­ties. But there's al­ways a need for some­one to ac­tu­ally deal with the is­sue at hand in prop­erty man­age­ment.

EA: Based on your re­search find­ings, what is the most crit­i­cal as­pect of pro­mo­tion that a prop­erty man­age­ment de­part­ment or in­di­vid­ual prop­erty man­ager can do to bring new clients on board?

RB: Re­search shows that lo­cal area ex­per­tise is crit­i­cal. A prop­erty man­ager or agency can demon­strate value by show­ing how much they know about the area – whether that's the amount of time they've traded, or how in­volved in the com­mu­nity they are. If they can demon­strate their un­der­stand­ing, that's what land­lords want.

NC: The things that peo­ple like most about good prop­erty man­agers is that they are com­mu­nica­tive and pro­fes­sional. They're re­spon­sive, they re­turn calls, they fix things quickly. Hav­ing lo­cal knowl­edge is also very im­por­tant.

Fees are also an is­sue. We found that most peo­ple were pretty happy with the amount they were pay­ing, but you don't want fees to make us­ing a prop­erty man­ager un­af­ford­able.

EA: What do land­lords view as the big­gest dis­ap­point­ment in their prop­erty man­ager / ten­ant re­la­tion­ships?

RB: Com­mu­ni­ca­tion. Land­lords are ex­pect­ing prop­erty man­agers to be like an em­ployee they're in­vest­ing in. When they don't get a fast re­sponse back, or they feel like they're left out of the loop, they're an­noyed.

Ev­ery­one's dif­fer­ent when it comes to com­mu­ni­ca­tion. It's im­por­tant to try and un­der­stand the kind of land­lord they are – whether it's their first in­vest­ment prop­erty and they're re­ally con­cerned about ev­ery­thing, or whether it's their tenth and they're happy for their prop­erty man­ager to go ahead and get main­te­nance items fixed with­out call­ing them.

NC: I would say it's com­mu­ni­ca­tion – or a lack of it. That's some­thing a lot of prop­erty man­agers can rec­tify. If you don't re­spond quickly to is­sues, that can be­come a prob­lem for in­vestors. Things don't need to be re­solved straight­away ei­ther. There's a mis­con­cep­tion that to be a good prop­erty man­ager you need to fix a prob­lem quickly. Of­ten things can't be fixed quickly, but what you can do quickly is com­mu­ni­cate: talk to the land­lord, talk to the ten­ant.

EA: What did land­lords ap­pre­ci­ate most?

RB: Fol­low-up. If you say you're go­ing to do some­thing, come back and tick it off. If some­thing needs to be fixed, loop back with the land­lord to con­firm that main­te­nance has been com­pleted.

NC: Spe­cial­ist knowl­edge of the mar­ket and of their prop­erty is crit­i­cal to land­lords.

EA: What is the prin­ci­pal mo­ti­va­tion be­hind in­vestors se­lect­ing prop­erty own­er­ship?

RB: Bricks and mor­tar is some­thing that land­lords seem to un­der­stand. Land­lords will of­ten live in the area they buy in; they con­sider it a good area, so they're us­ing logic to in­vest. The share­mar­ket is a much riskier propo­si­tion. Land­lords feel some­what ed­u­cated in prop­erty, rather than go­ing on to learn the machi­na­tions of a whole new mar­ket­place which is com­par­a­tively volatile.

NC: There's lots of rea­sons – one of them is that we've seen re­ally good re­turns for prop­erty. Although yields have been low for some ci­ties, we have seen pretty good cap­i­tal growth over­all. Look­ing at it from a to­tal re­turns per­spec­tive, res­i­den­tial prop­erty has done pretty well. There's tax in­cen­tives like neg­a­tive gear­ing to take ad­van­tage of, too.

Peo­ple like prop­erty be­cause they can touch it and feel it – they feel as though they have some con­trol over it. If you're in­vest­ing in BHP as a small in­vestor, you'd have very lit­tle abil­ity to im­pact the per­for­mance or di­rec­tion of the com­pany. If you've got your own prop­erty you can ren­o­vate, change ten­ants, change prop­erty man­ager – you can im­prove per­for­mance in a num­ber of ways.

EA: Do you think land­lords are gen­er­ally so­cially re­spon­si­ble in their re­la­tion­ship with ten­ants?

RB: It re­ally comes back to prop­erty man­agers ed­u­cat­ing their land­lords. If land­lords are at­tempt­ing to do main­te­nance them­selves, this can come at a cost. If their Un­cle Kevin is com­ing to fix the heater but can't at­tend for two weeks, their ten­ants are go­ing to think about mov­ing. The land­lord needs to treat the prop­erty with care, and the ten­ants in turn will also care for the prop­erty. The prop­erty man­ager bears the re­spon­si­bil­ity for hav­ing that tough con­ver­sa­tion and putting their land­lord back in place.

NC: I think most land­lords are pretty good. Many want to treat peo­ple re­spect­fully. The av­er­age in­vestor wants to make sure that they have a good ten­ant who looks af­ter the prop­erty rather than some­one who pays more rent.

EA: What’s the most in­ter­est­ing piece of in­for­ma­tion from this re­search?

RB: What surprised me was the amount of mul­ti­ple in­vest­ment prop­er­ties that land­lords own. One in three owns mul­ti­ple prop­er­ties. Of th­ese, 47 per cent use dif­fer­ent prop­erty man­agers. This is a huge op­por­tu­nity for prop­erty man­agers to win new busi­ness by hav­ing a sim­ple con­ver­sa­tion. For na­tional fran­chises, there's also an op­por­tu­nity to keep man­age­ments within their net­work.

The other in­ter­est­ing fac­tor was about tech­nol­ogy. We asked land­lords if they had two agents to pick from – one who used tech­nol­ogy ex­ten­sively and the other who didn't – which they would choose. We found that 92 per cent would pick the agent with tech­nol­ogy.

NC: Peo­ple are pretty happy with the prop­erty man­agers they use; 72 per cent of re­spon­dents felt prop­erty man­age­ment ser­vices were good value for money. Quite a few peo­ple don't use prop­erty man­agers – well over 10 per cent of land­lords – but whether that's be­cause they don't like us­ing them, be­cause they have a great re­la­tion­ship with their ten­ants or be­cause they have the time to man­age the prop­erty them­selves is un­known. ■

“Land­lords are ex­pect­ing prop­erty man­agers to be like an em­ployee they’re in­vest­ing in.” “Fees are also an is­sue. We found that most peo­ple were pretty happy with the amount they were pay­ing, but you don’t want fees to make us­ing a prop­erty man­ager un­af­ford­able.”

Richard Bray

Nerida Con­is­bee

Iolanthe Gabrie

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