Loss of Mgts (HELP)


(Sarah Martin) #1

Hi Guys, this year has been horrible for loss of management for us… I had three leave this week because they were offered 6 months free management and then on-going management of 5.5%. As a business I can’t match that, we would end up paying to manage the properties.
I am such a big believer that if a landlord loves you and your service, it wouldn’t matter what they were offered they would be loyal and stick with you or at least say “hey, I have been offered this, can you do anything for me?”.
Is anyone else having these issues? Does anyone have any advice on how I can get the team to take on my belief as well?
Our NPS is +50, we have a communication guarantee that the team abide by and we make happy calls just to touch base with clients. I am at such a loss at what to do!


(Ashley Giles) #2

Hey Sarah,

Wendell’s have had a tough year too! Rents are slowing, and property yeilds are low here (about 2% yeild on a rental if you are buying now) so everyone is selling…

We also have several discount offerings in the market place, not quite as a agressive as yours however 3 months free and $6% flat fee is what is being waved around by several operators.

https://www.wendellproperty.co.nz/blog/choose-the-right-property-manager-for-you/

We wrote a blog about “How to choose the right property manager for you” basicly it was trying to highlight that they are not comparing apples with apples. But an Apple with a Banana.

I talk to the owners and say, (How many properties is that property manager running, do they do viewings on both weekend days, and after hours? Do they have a 24 hour support line for your tenants? What discounts on trades have they negotated and pass onto you?) These questions and more will help them see that actually, the nett result of being with you will put more in their pocket.

With better marketing, better maintenance, better service to tenants they will have a higher rent, or less downtime etc. This means that even if your fee is higher, they are NETT Better off being with you.

This works 8/10 times with us, we have only lost a few since putting this in place. (Note this conversation happens from one of the Owners / GM of the business).

Hope this helps.


(Sarah Martin) #3

Ash this is great. Can we write one too?
Do you make that call after you get the take over letter? Agencies have only been giving us 24 hours to prepare the file and the landlords always dodge our call until then haha


(Ashley Giles) #4

Of cause, pledgerise all you like! I was meaning to write a “10 questions you should ask when interviewing a property management company” but never got to it! I think it would be good for new business too, you can give it at the time of your appraisals to “Up-skill” the owners to making better choices, which will always be your business of cause!.. but I digress…

We do it when we get the notice. We have a 3 month notice period in our MA, so that is time for us to get things sorted with the clients. In the rare cases that we cannot retain them, I have the new company taking over buy us out of our contract to start early as most agencies are chomping at the bit to get it early / paid their bonuses. I don’t mind, means we still get paid but don’t have to do the work.

We are always gracious and oftern we will actually get the clients coming back to us after guess what " the cheaper PM company did not do as good a job!"

Anyway, keep us posted if this helps at all…


(Glenn Lehman) #5

I am with you. I am not making a killing on properties where I could drop my fees 2 or 3%. I know people with lower prices are providing less service then we do. So I am :confounded: (always wanted to use that emoji).

Facts

  1. I do not want to provide a discount service.
  2. Some owner do not want a discount service
  3. Some owners only a discount service
  4. I will not be making owners looking for discount service happy (even if they hire me)

So someone is leaving, I get to do a self review and answer some questions

  1. Why did they look at the other company (were they contacted, unhappy so they went shopping, had a friend with the cheaper company)?
  2. How did I miss the main thing they wanted was cheap service?
  3. Did the service this person receive REALLY match my picture of good service?
  4. Was this a death by 1000 cuts?
  5. Should I have noticed the romance was gone?

I never try and keep them - they are already gone. :zipper_mouth_face:

The real fears I have in loosing client is simply this:

Is it me? How could I have done better?:man_facepalming:

I take losses very personal. I normally can figure out what we did to leave someone unhappy.

I know this does not present anything close to an answer, but maybe it is of some use.

Note: It is very hard to teach a cheap owner that service has any value. Sometimes we can help them to discover that real value of service. :partying_face:


(Sarah Martin) #6

Does anyone have a survey they send to loss of mgts once they are gone?


(Kimberley Yeeles) #7

Hi Sarah,

I think this is happening all across the country unfortunately.

I had an owner today that was referred to us by another Landlord and he wants us to take over the management of his property because he is not happy with his current agent and still the first question he asks is can you provide a cheaper fee than what I am currently getting!

Unfortunately, the cowboys in this industry have made the public believe we are all seagulls trying to fight over the last chip and will do anything to get it!


(Tim Ellis) #8

Perhaps it’s a reflection of the already positive culture in the team and it’s a cleansing of cheap landlords that don’t respect the same higher values… perhaps the space made by them leaving is filled with better and higher quality clients over time… natural selection at play.


(Ashley Giles) #9

“The race to the bottom” I think we are all in the same boat, I love your example @kimberley.yeeles, this happend to me a lot when i was running Wendell’s. My favourite responce was, “Well, you get what you pay for… Clearly you werent happy with that PM compaines performance so how do you expect me to do better for the same money.”

People dont realise that it costs money to run a good business. Your PM’s are better trained (costs to send them to trainings and conferences etc) your owners have the best tech, (Recently I heard regional PM companies are spending the same on rent as they are on tech for their offices!) and it costs money to have good managment.

This is not a high margin game, and your right, we are not seagulls!

I think that change is coming, the best will band together and set a new bar and soon the price question will be off the table, at least for the good landlords… Then the crappy PM’s can have the Crappy landlords at the lower rates :slight_smile:


(Sarah Martin) #10

Thanks guys! Its good to know its not just happening to us. Its such a shame tho :frowning:


(Sarah Martin) #11

Hi Glenn, do you have an email you send to LLs where you increase their fees or sack them?


(Glenn Lehman) #12

No I tell them on the phone.


(Terri Handy) #13

That is a great approach @glenn. Speaking with them directly is the best way to make sure your message is understood and you can address any concerns immediately.


(Mark Shorrock) #14

Hi Everyone,

I call the owners with the aim and use a lot of the techniques above. However, I’ve have found the main thing I say that resonates with the owners which save you having to go into a lot of details is "We charge a full-service fee structure where we do about 120 tasks to manage your property effectively, e.g. ‘high rent, low vacancy and maintained to highest value for refinance/resale’.

A few years ago I heard at an industry seminar that a survey conducted by REIA concluded that management fees under 7.5% are unsustainable. As such an agency charging less simply cannot afford to do all 120 tasks and stay in business! So we could match the lower fee of let’s say 6.6% inc GST (we charge 8.8%), and you can choose what 30 tasks off the list you don’t want us to do!

Ultimately you get what you pay for, and there is no doubting that discount providers won’t do the hardest most costly tasks because they won’t be able to afford the time or money!

We wish them well and welcome them to come back if things don’t turn out etc.

I finish off the conversation with - Cheap Property Managers Can End Up Being Very Expensive!


(Adam Hooley) #15

I like your approach Mark. I have done similar where I’ve said we can discount the fees, just tell us which part of our service you don’t require anymore? Obviously after a long serenade about our value offering.


(Mark Shorrock) #16

Thanks Adam. I’ll try and dig up my email template and share it.