Property Management is a service, that, when undertaken well should involve close interaction between the Property Manager as Agent and the Landlord as client. Good property management services are vital in maintaining asset values, which protect the Landlords interests.
At MRS Property there has always been and continues to be, a great pride taken in providing a personal service that specifically addresses the individual needs and requirements of our clients and requires a deep understanding of the assets that are managed on behalf of those clients. Our goal is to, at all times, be our clients trusted property advisors.
Increasingly, competition within the Property Management sector has seen fee reduction used as a means to secure managements. Our view is that this is a short-sighted strategy that carries inherent risk, for the following reasons:
1. Individual Portfolios Become Too Large
Cutting fees to secure managements invariably means that Property Managers are required to look after more properties to achieve the same level of fee generation. At MRS Property we consciously ensure that individual portfolio’s are manageable and realistic to allow our Managers to perform the tasks that are required.
2. Increased Risk to the Client
The commercial environment in which we operate is becoming more regulated and compliance considerations are increasingly prevalent. If a Property Manager is required to administer a portfolio that is too large, then there is a distinct risk that compliance matters may be missed or not attended to. This increases the risk that if an adverse event occurs which is contributed to by a lack of action by the Property Manager, then both the Agent and the Client may be at risk of serious legal or financial ramifications.
3. Providing Consistency to the Client
By the very nature of performing the role, a Property Manager acquires significant intellectual property regarding particular assets that they manage. We believe that this knowledge adds significant value to a client. A Property Manager who is expected to run a portfolio that is too large and demanding is unlikely to be content in that role for any length of time. This situation will often lead to a Property Manager seeking an alternative role, which risks the client losing the IP that has been gained over time. At MRS Property we are proud that we have Property Managers who have been with the firm for 15 years and have progressed to being the trusted property advisors for their clients.
4. Having Time to Strategise
It is essential to make time to adequately consider the operations of a portfolio. A property portfolio can be very dynamic and a Property Manager needs to be able to consider how to best achieve value from the clients assets. A Property Manager who is over-worked or under resourced will not have time to invest in providing the best level of strategic thinking to best service their client.
5. Potential Cost Savings
We acknowledge that there are invariably pressures to reduce cost. In our opinion simply saving money on the initial management fee is a slightly false economy. In an environment where expenditure can run into hundreds of thousands of dollars, a Property Manager who is able to perform their role to the best of their ability is likely to make savings that will far outweigh savings made on reducing a management fee. At MRS Property we live by a mantra where we consider a clients asset as if it were our own. We question and justify what would “we do” if this were our money?
Summary
o The cheapest will invariably not provide the best outcomes.
o Ensure that your Property Managers work load will allow them to dedicate the time required to properly manage your asset.
o Investing in good Property Management will ultimately save money and;
o Good Property Management will involve a healthy relationship between agent and client.
Mike Elgar
Director – Property Asset Management
We would be delighted to provide a personal insight into how we can assist with your Property Management requirements. For more information please contact:
M: 0417 745 210
E: melgar@mrs.com.au