Property Management industry under scrutiny after media attention
The wellbeing of Property Managers must be number one priority
Never before has the Property Management industry come under such scrutiny. We have seen the industry attacked from all angles, whether it be Tenant groups, Consumer groups or the media in general. Unfortunately, some of the negative commentaries have been justified, highlighting issues around professionalism and integrity.
We are in no doubt that the service overall offered by our industry has to improve. This is largely due to our industry being guilty of shooting itself in the foot and also due to a lack of regulation. An oversupply of small Property Management companies has to lead to the practice of undercutting of fees which in turn leads to a drop in quality as profit margins get tighter. It is also the symptom of an unregulated industry where over 50% of Property Managers have no qualification relevant to the industry that they work in.
We will look at issues that our industry has to tackle later.
However, some of the comments made go too far and one article, in particular, is nothing more than a sensationalistic opinion piece by a Business Editor who clearly has it in for Property Managers stating that they make her 'blood run cold'. Her article highlights that in her opinion, many Property Managers are nothing more than money hungry corrupt bullies who deliberately drive up rents.
Rebecca Stevenson is the Business Editor of the relatively new online Media outlet called The Spinoff. Her article earlier this month held nothing back. I can understand that you want to draw attention to yourself and sensationalistic headlines generally do a good job of that. However, if you are going to write an opinion piece you really need to do your homework first and give the industry you so vehemently hate the right to reply.
In this case, Ms Stevenson does raise some points that we agree with such as service levels being inconsistent. However much of the article is offensive and at no point does she seek to hear the Property Managers side. We wrote to her asking if The Spinoff would allow us to respond to her article. She respectfully declined.
Ms Stevenson highlights her three biggest issues as to why in her words, Property Managers suck. Let's look at Ms Stevenson article and respond to her claims.
#1 We are money hungry
I'm sorry Rebecca, are we supposed to do this for free?
One would think a Business Editor would understand the need of a business having to charge a fee so they can attempt to make a profit. The reality is Property Management is probably one of the most undercharged industries for the increasing amount of responsibility that they have to deal with. I visit Property Managers up and down the country and ask them what they would charge their service at by the hour. Many will look at me with a blank face and have no idea.
A Property Management company will spend on average approximately 25 hours a year to manage one property. This includes inspections, rent payments, issuing statements, landlord payments, repairs and maintenance, letting once on average every two years and reporting to landlords. Property Managers need to have an increased knowledge base of legislation which goes above and beyond the Residential Tenancies Act.
They are dealing with The Building Act, Privacy Act, Human Rights Act, Health and Safety at Work Act, The Unit Titles Act, Consumer Guarantees Act to name just a few.
If you break down what Property Managers do by the hour and charged for it at current rates, most landlords would be paying around $50 an hour for the service they get. This is too cheap for the responsibility that Property Managers have thrust upon them.
Property Managers are often abused and sometimes bullied with approximately one in two females and one in four males fearing for their safety at some stage of their career.
In recent times we have heard first-hand events that Property Managers are subjected to.
- A Property Manager in her 60's was punched in the face by a tenant
- A tenant having to be restrained at a shop by security guards as she tried to assault her Property Manager who was out doing the weekly grocery shop.
- A Property Manager being abused on the phone by an angry landlord demanding she signs a backdated letter so they can evict a tenant. She refused.
- A Property Manager being told to sign a contract with a landlord who does not want 'Heavy people' living in her rental property as she has concerns about the bathroom floor.
These are just a handful of the distressing situations front line Property Managers find themselves having to deal with. I myself as a Property Manager a few years ago was often abused by both tenants and landlords and on one occasion attacked by a drug fuelled tenant.
And we all remember the terrible circumstances that occurred last year when two Property Managers were shot dead in cold blood by a tenant.
Don't get me wrong, the vast majority of people, both landlords and tenants, are wonderful to deal with. But property always comes with a lot of emotion and often brings the worst out of people when things go wrong. Too often the Property Manager becomes the scapegoat. But hey, we are money hungry right?
Money Hungry? Wrong, Big Time!
In our last two surveys about the industry, we ask people who work in Property Management what they love about it. With nearly 400 people completing the survey only one person made reference to the money that they make. Overwhelmingly the biggest motivator is helping people.
To put it plainly, Property Managers do not do this job to earn hundreds of thousands of dollars. They are kind, hard-working people who often go above and beyond. Many people who answered the question in our survey were quite negative about the industry due to the stress and abuse they are subjected to.
Don't believe me? This response from an anonymous Property Manager sums up how many feel.
"To be honest, nothing now. It is so stressful, I loved my job for the first 8 years, now I hate it. Tenants are struggling to keep up with the cost of living, owners are stretching themselves beyond normal means which in turn affects maintenance, life is just more stressful these days and we are the meat in the sandwich that cops all the abuse"
But hey, we are money hungry!
Industry Under Attack
17th January: Property Managers accused of artificial accelerants on rental demand by Renters Utd
20th February: First reports of a Property Manager allegedly stealing thousands of dollars from dozens of landlords
2nd March: Scathing article about Property Managers appears on the online media outlet The Spinoff by Business Editor Rebecca Stevenson
5th March: Fair Go highlight the plight of a Christchurch landlord who claims her Property Manager let her down badly after tenants caused $100,000 worth of damage from Methamphetamine
#2 Your money is not as safe as houses
Here Ms Stevenson alludes to the fact that with the industry being unregulated it is open to widespread corruption and fraudulent behaviour. She refers to three cases in particular that found their way to the court through the REA. Two of them are seven years old and one is eight years old. She also references the recent case of a Ray White Property Manager in Henderson who allegedly owes hundreds of thousands of dollars of rent to landlords which made the news last month.
Do not blame the industry for a lack of regulation. We want and need regulation more than ever and the vast majority of Property Managers want it.
The reality is that with no qualification or regulation required, Property Management is an easy target for abuse as anyone can get into it. This is wrong and should be changed. Trust accounts and Audits should be compulsory, as should Police checks on individuals who work as Property Managers. And we clearly believe that you should be qualified. We agree with Ms Stevenson on this.
What we take umbrage with in her article is that it is written in a way that it labels corruption as being widespread. If all she can find is three cases over seven years old then it hardly points to widespread corruption. We are not naive enough to think that our industry is squeaky clean and you can trust everyone. No, of course not and if you dig deep enough, you will find shonky accounting practices in some parts of the industry.
However, if I dug deep enough in any industry then I would find corruption somewhere along the line. Whether it be Politicians, Accountants, School Teachers and yes, even Journalists, there will be the odd 'bad apple' letting down an industry. Don't paint us all with that brush.
#3 Service levels, um, vary
In her third reason for the "suckiness" of our industry, she refers to the number of issues she has had to deal with as a tenant and a landlord. She has clearly had some bad experiences but we cannot understand why she feels she has to apologise for being a landlord.
It is very easy to put the boot into Property Managers. When things go wrong with a rental property someone is going to be unhappy. You have landlords and tenants with different interests and in the middle is the Property Manager. Rebecca suggests to readers that they go onto social media to see the tale of woe or anguish of renters.
Here it is easy for the gutless keyboard warriors to vent if something they wanted did not happen. Got declined for that rental property you applied for or got evicted because you didn't pay the rent? Let's turn to social media and slag off the money hungry Property Manager.
We do acknowledge, however, that there are parts of the industry that need to raise their game. This is generally not the fault of Property Managers, the majority of which work so hard without acknowledgement. We need to dig deeper to look at why service levels vary so greatly.
The wellbeing of Property Managers has to be the priority
The greatest concern I have for the industry is the physical and emotional wellbeing of Property Managers. The vast majority enter the industry wanting to do a great job and look after both landlord and tenants. However, they are let down by organisations and employers who have the right intentions but do not have the resources or the skill set to train and support them.
With landlord and tenant demands increasingly on the rise, we are almost reaching crisis point with the ability to attract and retain people within the industry. Time and time again I see or hear of Property Managers suffering and struggling to cope leading to issues around mental health and burn out. Some end up on medication and self-esteem goes as the constant barrage of demands proves too much for many.
This is where the industry needs to step up. Property Managers wellbeing needs to become the focal point for businesses and the industry as a whole. There is no point attending the latest 'Grow Your Rent Roll Quick' seminar if your Property Managers simply cannot cope with the increased workload and pressures that come with this.
Getting qualified is a start and yes, we acknowledge we benefit from this as a company. However, we truly believe in what we do. With knowledge comes power and more importantly for Property Managers, confidence to give the correct advice to consumers.
Other areas that need exploring include inducting new entrants into the industry so they are fully aware of what they are letting themselves in for. We also believe that focusing on conflict resolution has to be a priority.
Too many Property Managers are available 24 hours a day 7 days a week. Too many try to please everybody without little gratitude or thanks. Too many do not know how to handle the abuse and conflict that comes with the job. Too many lead an unhealthy lifestyle as they cram down a pie for their lunch rushing between appointments. Too many of them wake up in the middle of the night worrying about something they forgot to do the previous day as they were overwhelmed with work.
Try phoning up a landlord Rebecca to tell them that their property has been contaminated with Meth or phone the family of the tenant who has just deceased living in the property that you manage.
If Ms Stevenson had actually spent time at the Property Management coal face, she may not write such a harsh, biased and unfair article.
Leaders need to step up
To see what can be done when we put our team first, look at the story of Continental Airlines. The airline continually ranked last among major airlines in customer satisfaction. It was losing millions and went through CEO's quicker than the cold blood that goes through Ms Stevenson's veins.
Then along came Gordon Bethune. He led the company from 1994 to 2004 and turned the company around, saving it from bankruptcy. How did he do this? The main change in mindset was that the employees became the number one priority. If the team are not happy, how do you expect the consumer to be happy?
He was genuinely concerned for his team and had their interests at heart. He was approachable and would often be found at the coal face on busy days such as Thanksgiving, helping out baggage handlers.
So my message to business owners and the industry power brokers is this.
Do not make growth your number one priority. Focus on your team and make them your number one priority. Focus on extending the lifetime value of your clients and focus on providing your Property Managers with the tools they need to do the job effectively and professionally. Focus on staff retention and satisfaction. Focus on the emotional wellbeing of your front line staff. If you get this right, the growth will come.
In our world of instant gratification, where the keyboard warrior rules and we want results overnight, we need to stop, look and assess what we are doing. We need to ask the question why so many leave the industry. We need to stop undercutting each other in an attempt to hit those growth targets and look at how we can retain Property Managers and give them a career and an industry to be proud of.
And most of all, we have to look after the people at the coal face and make them our number 1 priority.