PM Collective - The ART of property management

Part 2: Creating Capacity Without Sacrificing Service Quality

• Ashleigh Goodchild

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This episode focuses on enhancing property management capacity while maintaining high service levels. It examines the relationship between capacity, service quality, and the impact of outsourcing support to successfully manage more properties.

• Revisiting property management capacity ratios and their implications 
• Discussing misconceptions about service quality and property volume 
• Sharing insights from a property manager with an effective lower capacity 
• Emphasizing the importance of constant communication with clients 
• Providing examples of effective systems and processes 
• The role of virtual assistants in boosting team efficiency 
• Highlighting the importance of annual audits for client retention 
• Offering strategies for maintaining service quality amidst growth

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Speaker 1:

Hi. So we're back for part two of this topic, which is creating capacity in property management teams. If you haven't listened to part one, go back and listen to part one first. But for those that have a reminder, this all came about from some fan mail I received on a podcast and the fan mail read hi, I've been listening to your podcast and I'd love a show on capacity for property managers. I've been told 100 to 120 from start to finish, including leasing, pzrs, finals, routines, maintenance and trust accounting. There's so many agencies saying that they have 150 to 1 or 100 to 1 ratio, but none of them mentioned the outsourcing, leasing agents or BAs that they have.

Speaker 1:

I'd love to hear your thoughts on this. It's sending a very blurred message to business owners and setting a ridiculous expectation. So, great question, but we did have to divide it up because there's so much to unpack and while there are variables, I think and you want to make sure that you are comparing apples for apples I think that it's also important to come up with a figure and have a figure as well, and it's going to be different for every office for different reasons. So in part one, we did talk about why you want the capacity, some homework to do as well in regards to your business, and so hopefully you've done that. But it came down to why are you wanting capacity? Either your business numbers and your profitability aren't fantastic or, potentially, you have got a team where they can manage more, or maybe you just think that they can manage more. So part one sort of covers a little bit about the why. Now what I wanted to cover in this episode was more about service levels, and a common, I would say, misconception is that people think that the bigger numbers you have, the less service you are providing your clients. So let's unpack that question, because that's also really, really interesting. Now I have got a message from a friend on Facebook, which I'm going to read this out to you because I think that it was quite good to start off with the discussion points.

Speaker 1:

So she says true capacity for us is 80 to 100 properties. I personally feel we deliver more on the service side than most other agents and fill a niche in the market for investors wanting to spend more and get better service that is end-to-end, with occasional outsourcing if and when needed, and one shared VA and one part-time in-office support person. So that capacity, as she said, is her team look after 80 to 100. So when I questioned some examples of extra service that she is providing to her clients, this is what it looks like and I'm sharing it because it's really everyone wants to know what everyone else is doing, and so this is really a way that you can get a little bit of insight into another business owner's brain and mindset and how she is doing her team. So a couple of service level things that she is doing which she feels is why it's important for her to maintain those numbers at around 80 to 100 so she can continue with this extra service that she's worried she won't be able to do if the team had a bigger capacity. So she says we do end of month audits for every portfolio so owners know if they're getting 50% of less than their expected income Great service option there. So ultimately, what she's saying is that they look at every single monthly statement before it goes out to the clients and if they're going to be receiving 50% less than their expected income, they are notifying the owner and letting them know and giving them the heads up. So I think that there would be owners out there that would really appreciate that. I think it's a good touch point.

Speaker 1:

She goes on to say there are generally more touch points in communication, so that would have been one of them. When a work order is completed, we check with a tenant that the work is done to a good standard. We email the owner great news that this has been done. This is just the invoice for your reference, but no action needed from when you will pay it Now. Interesting and I say this with love because I love this business owner she is someone I have a huge amount of respect for. The only thing I would say in regards to that is could that possibly be a double up in communication? Ie, if you are already letting the owners know that the invoice has come in, sending them a copy of the invoice and letting them know that the work's been completed and it's been checked sort of off by the tenant, then they're going to know at the end of the month if they're going to be getting less income than usual. So that would be my only comment on that. However, it's still another touch point. It still is an extra service and I think that there's going to be owners out there that are really going to appreciate that.

Speaker 1:

She has gone on to say, say, when conducting rent reviews and lease renewals, full CMAs completed with recommendations for six and 12 month pricing suggestions with a price if they went to market. Now I think that is also great. I feel like that's probably something quite standard, though that is happening in most offices. I know like that's probably something quite standard though that is happening in most offices. I know that we do that, give them the market price of it went to market, etc. So that's good and let's just have that as a fresh reminder that you should be doing that in your business. And if you're not doing it, then I would suggest you know you can maybe do a little bit better.

Speaker 1:

However, what's interesting is that her team are doing that and my team are doing that. However, I am using a VA for that extra service level. So what I was finding is, before we had offshore, my property managers weren't doing that in the detail that I wanted it. So now the offshore, they draft that email in that detail that we're wanting and then they check it and they add their final numbers. So they're doing it in-house. I'm doing it with a VA, but obviously signed off by a property manager. But yeah, that one I think everyone should be doing. However, in her market maybe not, and that's why it's sort of seen as that extra service. So it's interesting there.

Speaker 1:

And then she also goes on to say that they've got that more detailed communication and personalization and everything in the system is templated. I think that's a really good point. I think everything should be templated. It creates consistent communication and language for your whole office, for your whole team, whether they're present or not. So that is something and that's what we were talking about in the first part. One episode is that systems and processes and consistency to make the property manager's life easier and to make them look better as well Everything does need to be templated like that. So that is just reiterating that item as well. So she goes on to give us some other examples of application sorry, extra examples of service, high service levels that she's giving, which is her reason for having her team manage only 80 to 100 properties.

Speaker 1:

And the next one is our application summaries are hand-typed by us to capture relevant information, and usually the top five shortlisted summaries are sent to landlord. They are detailed, with actual quotes from references, not just the automated IRE ones, and I think that's also very good. So that type of thing we personally have templated in-house. Again, we're offering the same. However, I have an offshore person who actually does that template and summary, where she has got the property manager sort of hand typing that, so it's a lot more personalized. I think that that's really good. I think that that is definitely shows a lot more detail going into the process and I also think that a phone call to an owner to let them know all that information and personally reiterating all that information and then a templated summary afterwards is also still showing to the client the same level of service.

Speaker 1:

And then the final thing that has been added on is we've been offering for many years now tenant moving gifts with no charge to the landlord christmas vouchers for tenants where we write christmas card, handwritten christmas cards. We post vouchers to um the. What does that mean? We charge? We post vouchers, I think, to the tenant. For the owner I don't understand. She's used abbreviation so I can't exactly decipher what that is they can choose from three voucher options. We will liaise directly with their accountants for any extra info needed for their tax returns. So let's sort of unpack this a little bit.

Speaker 1:

So, with that service level of 80 to 100 properties and worried about increasing the capacity so she doesn't lose that extra level. I agree, I think we should maintain the service level. I don't think creating capacity is about dropping it, so I think that that's really important. I do think, though, that some of that and the templates, can be created by an offshore team, so I do strongly believe that having an offshore team is really, really important to increasing the high service standards that you're offering. It's not suggesting that your offshore team has any client access, but they're drafting the templates and the processes to make your property manager look better, so it'll be interesting from a business point of view, a profitability point of view, because I use an offshore for helping us maintain that high service levels. She is doing that in-house, so I feel like I am, probably I could be and I'm quoting this again if you're listening to this you know if the lady's listening to this recording, it's something just to keep in mind that your profitability might not be as strong because you're using in-house people for that.

Speaker 1:

So if you were to, hypothetically, get an offshore person to do all that, then you're getting an extra full-time person. Could you increase that capacity while maintaining that service? That would be my question to you. So ultimately, that would be my second part of creating capacity is. You know, in the first part we've talked about those service, you know, getting the basics right, getting those systems and processes done. The second part, what we're talking about today, is making sure that you continue to do that. But I would be implementing personally a remote professional into that space who will help maintain that. So we've got an extra full-time person in your business at the fraction of the price.

Speaker 1:

Now, if we want to just go back to a formula that I used in part one, and that was three property managers should be able to manage between three and five properties per hour they work. So let's use the base level of three properties per hour that you work and we have just employed a remote professional for 40 hours per week. That means that by bringing in an offshore remote professional for 40 hours a week, we should be able to. I'm going to be kind here, because I think you should be able to increase your capacity for the team by 120 properties. Let me be kind and base it on two properties per hour because they're a remote professional admin assistant. Instead, we're still talking 80 properties that you should be able to increase your capacity. So, therefore, when I talked about not bringing in technology or processes as a band-aid fix in helping the team, you always need to have those conversations that if I bring in this and get someone in to help you, or bring in this technology to help you, this is now what I'm expecting from you. So, therefore, the conversation would be I want to bring in an offshore they're going to help with this, this, this and this and therefore it should be able to help free you up to increase your capacity and maintain your service levels, I would argue, actually increase your service levels, though, by 80 to 120 properties and again, that can't happen overnight, but it will happen as part of the process. And now you have a team that have got that in their mind, that they have been able to get rid of all the little crappy stuff, they've been able to increase their service levels and they now have the capability to be freed up that much time to increase that capacity. And that makes a big difference.

Speaker 1:

What we're looking at. Let's just look at a portfolio. Let's say, three property managers in your team and they have, all you know, currently managing 100 properties each. Then, by bringing in one offshore, remote, professional, va, whatever you'd like to call them. Then you are able to ultimately have each team member grow to 130 properties. So we've got three property managers currently managing 100 properties each. That VA is not a band-aid fix. That VA is coming in and you're advising your team that with that extra support we now should be able to bring in and we should be able to manage 130 properties each. And that's your extra 90 properties capacity, or 80, 100, whatever you wanted in those numbers. That's another full-time person but you're using offshore to do that. So the numbers are going to look very good. You know tick for business owner. You know the business side of things that is going to help the business side of things, and a big tick for your property managers now having so much extra support with their capacity and their behind the scenes support. And now hopefully, because they're going from 100 properties to 130 properties, I hope that there's an allowance in there to be able to help increase their salary and to have discussions around that.

Speaker 1:

But at no point have we talked about this taking them extra hours. This shouldn't take them extra hours. This taking them extra hours this shouldn't take them extra hours. So this is an example of creating that capacity with maintaining service levels. And to maintain those service levels we have to have those templated processes, procedures and letters in place and you could have. If you don't have them, how about you get that remote professional in and have them set up that process for you, set up those templates so that they're all in the system for you and you're going to have a much happier team.

Speaker 1:

So let me just think about what others. I'm just trying to think of what other types of service examples, because we've given some good ones when it comes to all that maintenance etc. I mean, tapi makes it pretty easy that if you have an invoice come through, you can send a copy to the owner. So that's really easy if you are using that program and want to increase your service levels. I know that for us with PropertyMe and sending breaches out, we do all of that through PropertyMe now and we've got triggers so that when we issue a breach notice or a termination to the tenant, then they get notified. So there's an email that gets triggered that goes to the owner to let them know hey, nothing to be concerned about, but we have just issued your tenant with a breach notice. So that high level of service continues and we are being very transparent with them as well. So we also, from a service level, ensure that at the end of the month, if there are any outstanding accounts in the system, we always contact the owners and let them know, give them the opportunity to transfer some money to us to pay, or at least let them know that that's sitting in their account, so they might not receive any funds this month. So we do that as well.

Speaker 1:

And from a just trying to think of sort of other types of high level servicings, I mean for us we do the annual investor audits, which are like probably the biggest game changer in our business with high service levels. We have a complete high level audit with every owner every 12 months, going through everything, checking in with their mental stress with having an investment property, their financial stress with having an investment property. We go through how they're going with their interest rate. We go through what their maintenance level is. Do we believe they've spent too much on maintenance? Yes, it's possible. Or have they not spent enough on maintenance? We work out a bit of a plan for the next 12 months. So that is actually you know what.

Speaker 1:

Let's say that that's a shameless plug for the annual investor audit. If you're not doing them in your business, I have a completely separate course to implement them. They are a game changer. They are a little time consuming, I won't lie, but the fact that they're so beneficial makes me value the time spent on doing them every single time. It helps with fantastic retention, also helps with fantastic communication and also can be a lead generation if the clients also have other properties where their property managers are not doing the same. So that's sort of how we get that high level service involved, so it is possible to continue having high level service with creating capacity, and it all comes down to those systems and processes. So I hope you've worked that out by now.

Speaker 1:

We've done two parts of this podcast. Both of them come back to that systems and procedures. So the next thing that I am going to talk about in part three is actually going to be those numbers and hopefully share some other examples of other business owners, what they're doing, what it looks like to them, and provide some examples of people that have offshore support, people that have onshore support, and so just some real good examples, and maybe my opinion as well, with what I think. Do I think that there's some limiting beliefs with a business owner with what their team can manage. Do I think that they can improve on that? Do I think that there's some limiting beliefs with a business owner with what their team can manage? Do I think that they can improve on that? Do I think that they're doing really, really well? So I'll share my opinions on that and I look forward to seeing you next week. Any questions on this one, do reach out.