Questions & Answers with Chris Rolls Managing Director of Rental Express - Brisbane and Gold Coast leading Property Management specialists for Leased magazine plus a round table discussion filmed for www.sold-tv.com.au
1. Many people believe that Property Management, whilst always an integral part of a real estate business has been the victim of an identity crisis, carrying an image of the poor cousin of real estate sales, both within the industry and from outside it. Do you agree with this and if so, what do you identify as the top three areas that need to be addressed in order raise the profile of Property Management?
I think it’s fair to say that Property Management has been seen as the poor cousin of sales in the real estate industry for quite some time. I think it is also fair to say that we are starting to see the beginning of a trend that is changing this perception. The top three areas that need to be addressed in order to raise the profile of Property Management are as follows:
Education of real estate business owners:
One of the reasons that Property Management is seen as a poor cousin to sales is because of the lack of focus that real estate business owners place on this part of their business. More than anything this is because of a lack of understanding of the potential that Property Management has, as a source of income and as an asset.
Most real estate business owners have become business owners, because they have excelled as salespeople. Because of their excellence in sales, these people have then had the financial ability to open a real estate business. It is only through educating real estate business owners, who have a sales background, that the profile of Property Management is likely to increase.
Franchise groups:
Franchise groups and the way they derive income from their franchisees are partly to blame for the poor profile of property management as a profitable part of a real estate business. To a large extent the majority of real estate franchise groups in Australia derive their income as a percentage of sales income. Because of this they constantly push that success in real estate is dependent on large volumes of real estate sales.
The encourage recruitment of sales people, sales based training and reward sales success, because this is what generates their income.
They don’t push property management in the same way, because they have not come up with a business model that allows them to generate income from the success of their franchisees property management businesses. Those that have tried to generate income from their franchisees Property Management businesses have been faced with resistance. This is partly because the franchisor has not been able provide any value in terms of Property Management training, knowledge, and skills. Until the major real estate franchisors find a way to generate revenue from Property Management, it will continue to be seen as the poor cousin to sales.
Career path:
The third reason, that Property Management is seen as a poor cousin to sales, is because successful, confident, ambitious and driven people only want to be employed in areas of a business where there is a genuine career path, and an opportunity to earn an excellent income. In most real estate agencies around Australia this opportunity does not exist. Until it does, the best and brightest young people entering the industry will continue to seek a career in sales as opposed to Property Management. This means our best leaders are opening businesses and running them with a bias towards sales, because this is what they know.
2. Young people and those new to the industry often see Property Management as just a stepping stone to a sales career. What will it take for Property Management to become an attractive long term career path, particularly for entry level employees?
Part of the reason that young people see Property Management as a stepping stone to a sales career is because there is no career path in Property Management. The reason behind this is because most real estate businesses are too small to have a career path in their property management departments. It is not until property management businesses are managing over 2000 properties, that there is any real opportunity for a genuine management position, that commands a salary that is comparable to that of a good salesperson in the sales department. The reality is, that there are just a handful of businesses in the real estate industry across Australia that manage this many properties. Until the property management industry consolidates, and large businesses managing many thousands of properties emerge, with genuine career paths, most young people will continue to see property management as a stepping stone to sales.
3. How are you addressing these issues in your own business?
At rental express we have a culture within our business that is almost the opposite of most real estate businesses. We are first and foremost a property management company. In our business, sales, and finance departments are often seen as the poor cousins to Property Management. This culture is what attracts some of the best property management professionals to seek employment at rental express. We offer a genuine career path, with good earning potential. Long-term we offer an opportunity for people to have ownership in the business. This is something that is normally only provided to high performing salespeople within a business.
4. What is your vision for Property Management in Australia over the next ten years?
Over the next 10 years I believe we will see a complete transformation of the property management industry throughout the country. We will see more businesses whose core focus is Property Management. We will see larger businesses operating over wide areas and in some cases nationally. These organisations through their economies of scale will be able to provide better quality more efficient services to property investors. The businesses that are managing 100 to 200 properties will not be able to complete with this superior service. Their only option will be, to get big, or to get out and just focus on sales. Specialisation will be the future of the real estate industry in Australia.
Rental Express: A brief story about how to build a huge property management business.
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