An article by Hamish Turner (NZ)

In a market where there are only 30% of investments properties being managed by a property manager – leaving 70% “up for grabs” – one could assume there is no need to protect your client base against a competitor or employee.   To assume such would be foolish.

There are differing views regarding solicitation and what is ok and what is not ok!

There is a range of ways to protect your client base from a former employee soliciting your client base.

You can stipulate in your employment agreement certain timeframes whereby a former employee cannot provide services for any of your clients for a set period. This is both a common and an effective way of protecting your client base and asset alike – from being “poached”.

Time explaining solicitation of clients is important at both start and finalisation of employment.

If the former employee decides to ignore such clauses – then you have the right to pursue them for losses incurred.

Another form of solicitation to be weary of is of course competitors approaching your client base.

This issue is not uncommon and can cause significant financial loss. A judgement call must be made as to what sort of action you are going to take. The reality is – if your clients are leaving you because another agent is making contact with them – it is a good opportunity to review your service levels.

A few things you could do include surveying your client base or to simply call your client base – ask them if they are happy and if there is anything more we can do?

A lot of time can be spent on combating client solicitation. It is important to be careful to combat issues that arise in line with loss or potential loss.

An article by Hamish Turner (NZ)

How do you keep your finger on the pulse of your Property Management business?

There are numerous key areas which need to be acknowledged to keep your finger on the pulse of your property management business, two of these are your staff and your numbers.

It is important to ensure that you constantly review, and closely monitor these aspects.

Several ways to achieve this are to meet with your staff on a regular basis to review their work and catch up on where they are at (are they happy at work, are they being challenged/growing?) and review key performance targets. This makes it easy to monitor how your team is performing, to catch problems early and allow for easier resolution. It also provides a good opportunity to gain feedback on ways to improve your business!

Your property managers should also be reporting to your department head on a monthly basis regarding the office performance - to gain insight into their workloads, some easy areas to focus on are:

1. the number of work orders created
2. the number of new business appointments
3. the proportion of these appointments converted into clients
4. the number of routine inspections conducted
5. the number of properties which have been let
6. the number of lease’s renewed
7. status of rental arrears.

These statistics can be reported and reviewed as indicators of business growth goals and your teams workload. If you are not achieving the growth you are in business to be making, then what can be changed/altered to make this happen?

As a principal or business owner – it is of major importance that you are tracking your general account and ensuring your profit margins together with outgoings are “where they should be”.

One of my favourite sayings is that “property management is not rocket science” – it is a combination of a whole lot of time management and systems to cope with.  If you can see or at least measure the workload your team has, combined with measuring your growth in numbers (profit or growth model) then your finger is well and truly on the way to being on the pulse.

Inspire. Just the word itself causes us to pause and think. We may remember our own personal heroes or a teacher or mentor who brought out the best in us and showed us the power of one person.

It's easy in business to get cynical when we're surrounded by what I like to call "faux inspiration." I'm talking about the corporate posters with motivational sayings that are easy to spoof when the actions of management don't reflect the glossy images and quotations.

In my experience, inspiration comes from example. As Albert Einstein said: "Example is not the main thing in influencing others. It is the only thing." So, that means we all have the power to inspire others by our actions. As property managers, you're in a prime position to inspire your team (landlords, tenants, colleagues, tradespeople...).

Here are 10 ways to get you started.

1. Have a clear goal with a reasonable approach to achieve it. Shooting for stars may work for you when you're developing your personal goals, but when you're inspiring a team, people need to be able to clearly see how they are going to get from point A to point B and believe that it's possible.

2. Be enthusiastic about each person's contributions. Remember how good it felt when a teacher recognised your contribution? You glowed all day and nearly flew home. It costs nothing to tell people how they're doing. Recognising what they're doing well, and also giving ideas on how they can work even better, goes a long way.

3. Wear your blue hat and leave the black hat at home. You may have played the game where you wear different hats to assume different roles. The black hat starts with the negatives and tells you everything that's going wrong. This is the person who can kill idea generation in any meeting. When you're inspiring a team, wear the blue hat. See the possibility and opportunity in every challenge. Begin with what is working and then build on it.

4. Focus on the strengths of each person. One of the biggest myths in business is to focus on weaknesses instead of building strengths. It's a backward way to approach problem solving – like fitting the proverbial square peg into the round hole. It's faster and more effective to focus on the strengths of your team members and develop them. Not only will you see results faster, you'll also have a happier team because people are doing what they're good at and contributing at their highest level.

5. Clear hurdles like a Super Hero. How do you get your team to feel like rock stars? Think like Superman and clear any hurdles that are in their way. When you remove obstacles, you show your team that you've got their back.

6. Get the slackers off the team. Nothing brings down a team like slackers. When people aren't pulling their weight, it lowers the standards of everyone and makes it seem like quality doesn't matter. When you remove people who aren't performing, it improves morale because it shows your team that you're serious about the best results. Who are you "C" class tenants and landlords??

7. Roll up your sleeves. When you work with the team in the areas where you can contribute, you send a strong message because you are showing that you are part of the team with your actions.

8. Acknowledge people's contributions every week. Many managers make the mistake of recognising people once a year. Recognition isn't a holiday. It should be a regular part of your team dynamic. Take the time every week to tell people how they've contributed to the team.

9. Be the model of accountability you want to drive through your team. If you're telling people to be accountable while not meeting your own deadlines, it doesn't take too long for the eyes to roll. Keep your team inspired by keeping your commitments to them and meeting every milestone.

10. Show and communicate your progress. Don't make the mistake of doing project updates only at milestones. Communicate the progress of the project every week to make sure you're on track. COMMUNICATION PEOPLE!!!

And inside every one of these steps, add one key ingredient: Fun! Whether it's a quick team-building exercise during a milestone meeting or an inside joke that has come to define your team, give people every reason to laugh out loud and let the sound of laughter inspire your team to be the best they can be.

 

 

An article by Bob Walters

Remuneration Models

If you are willing to pay a minimum of $3,000 to buy someone else’s business relationship...why wouldn’t you pay your people an incentive to create your own??

I see many different types of incentive schemes when I am out consulting, the 3 most common are:

1. NONE – it’s their job!
2. 1 weeks letting fee OR
3. A set $ figure per property.

These types of bonus structures for new business, in my view, are flawed, as they provide no incentive for employees to obtain higher fees for the agency or to resist discounting fees.

 

Guiding Principles

• They will not give you the results you want, just for love of the job
• Everyone in Property Management should be paid on PERFORMANCE
• Reward the PERFORMANCE they can CONTROL and you can MEASURE

 

If you want to grow the NUMBERS

Current Schemes	Problems
None	You get what you pay for
1 weeks rent	Insignificant – focus on rent amount
$ paid for increase in properties managed	Anything to get the business
$X per property	Allows for / encourages discounting
% of income of Properties Under Management	Focuses on the total income

 

If you want to grow the INCOME

Current Schemes	Problems
None	You get what you pay for
Set % of arrears reduction	There is a limit – 2% of total income
Set % of management fee income	Can be viewed as "baby steps”
Set % of above-budget performance	“Management can manipulate the outcome!”
Set % of increase in total income	Unlimited opportunity (is that a problem?)

 

If you want to grow the PROFIT

Current Schemes	Problems
None	You get what you pay for
$ Paid for increase in properties managed	Taking on more properties – reduced service level
$ deduction for properties lost – other agent/ owner managed	“It’s not my fault”
$ deduction for non-recoverable costs due to errors	“It’s not my fault”

 

Sample Reward Programs

Concept

Each activity relates to the other – new business is not paid until the property is leased, the more good quality properties that are available, the easier they are to lease, lower the vacancy rate and the higher the percentage of fees equates to more management fees collected, increased fees mean you can keep your cost of management to a minimum.

Staff are motivated to complete all facets of their role to the level required and not just the activities they like or generate them more income, because if they exceed (or fail) in one area, all of the others are affected accordingly.

Once staff have been advised exactly what is expected of them and to what level, there is no room confusion, avoidance or laziness. Excuses cannot be justified. Reduce the occurrence of unreturned phone calls.

Sample New Management Incentive Plan

Commission shall be payable from the “contract value” (CV) written per month with respect to new management properties “gained” by you personally in any month. The property is “gained” when a management agency agreement has been signed and the property has been leased.

CV is calculated in the following way:

Annualised Management Fee for the property (excl. GST) + the Letting Fee (excl. GST) charged/shown on the management agency agreement.

For example, if a property is rented at $400 per week at 7% management fee with a one week letting fee the CV shall equate to $1,456 + $400 = $1,856.       

Say, 25% of the CV as a New Management Incentive = $464.

Sample Management Incentive Plan

An incentive bonus shall be payable to the property manager at a rate of 4% of the fee income generated by the individual portfolio.

For example, if the property manager’s portfolio generated $20,000 in fee income for the month, 4% equates to $800 paid as an incentive bonus.

However, the following amounts will be deducted from any incentive payments payable (should they occur):

-       the Contract Value (as calculated above) for any properties lost from management as a result of any mismanagement of the property by the property manager, or

-       any compensation payments made to landlords or tenants as a result of any mismanagement of the property by the property manager.

Sample Leasing Incentive Plan

A sum of $250 per month shall be paid, provided the employee personally leases a target of at least 13 properties per calendar month. A further $15 will be paid for each additional property personally leased by the employee in each calendar month once the minimum target of 13 properties has been reached.