Blog / Property Management
Chris Rolls, Specialise for Success
When you’re managing 3,500 properties across three south-east Queensland offices, as Rental Express does, it’s obvious you have a clear view into the future of property management.
Managing director Chris Rolls is working with the Real Estate Academy on its new Hot Topics Property Management series, sharing experiences and vision for this arm of the real estate industry.
Be The Specialist
A self-proclaimed specialist property management business, Rental Express started its life as a run-down residential real estate agency concentrating on sales, however Mr Rolls’ ‘light bulb’ moment came when he realised a property management business was an ongoing concern that could be sold for a profit.
“I thought, I’ve spent five years building a sales team that isn’t worth anything to sell and I’ve spent zero time over those five years concentrating on property management, yet the property management is worth the best part of a million dollars. I’m clearly heading down the wrong track here. We made the decision that property management was our future,” Mr Rolls explained.
Although Rental Express manages thousands of properties, Mr Rolls said he expected a property management office to break even at 400 properties - and anything less than 200 was “a waste of time” because “you’re not making a profit at all”.
Mr Rolls sees the future of property management as businesses operating as specialists in the field, not a property management team tacked to a real estate sales department. And the key to building these businesses is clever marketing that is measured at every step.
Targeted Marketing
Rental Express has some key areas in marketing that are responsible for most of its income - direct mail, internet strategy, referral network and a business development team.
“I think businesses are going to start to realise that the old scattergun approach of throwing a bunch of money at it and not really knowing what works and what doesn’t is a very short-sighted approach. We test down to the nth degree as to the effectiveness of the marketing that we do,” Mr Roll said.
And one of the most effective tools is long letters. “A lot of people say to me, ‘Oh, you know, writing letters to people doesn’t work’. It does work; it’s just that the type of letter that you’re writing doesn’t work.”
Times are changing for many industries, not just real estate, making the people who do something more specialised stand out. Look at how Aldi has taken market share from Coles and Woolworths in a short timeframe. Aldi has smaller stores, limited product choice, but very competitive prices and creates excitement around its products every week.
“All of a sudden they’ve taken six or seven per cent of the market share away from Coles and Woolworths and that’s an incredible thing to do in such a short period of time. I think that’s what we’re going to see in property management,” Mr Rolls said.
Utilise Technology Effectively
IT systems are what are going to make property more efficient, enabling property management businesses to keep the service levels up while still meeting the legislative requirements of their industry.
Rental Express uses an online landlord portal which can be accessed by clients to find the latest statement, lease documents, management authority, lease expiry, rent increases, status on whether the tenant is paid up and much more.
“I liken it to internet banking. Fifteen years ago, we didn’t use internet banking; it was a new thing and it took some time to catch on, but I haven’t been into a bank for probably five years because I do everything online,” Mr Rolls said.
This technology extends to prospective tenants booking their own times to inspect rental properties via an online system integrated with a leasing consultant’s diary.
“The system sends the tenant an email confirming where the property is. It also sends them a text message the day before at 5pm to remind them to turn up to the inspection the next day because tenants not turning up to inspections wastes our people’s time,” he said, and explained the system had reduced prospective tenant calls by 50 per cent.
Specialised property management businesses will need skilled staff across a number of areas and Mr Rolls sees this sector as offering great potential for those wanting solid career prospects in real estate.
Flooding the Market
The Brisbane floods in December and January affected Rental Express operations, however the clean up – both literally and figuratively – has helped to tighten up processes.
“You hear commonly in property management that when a storm goes through, you know the phone is going to run hot on Monday morning with all of the problems. This takes that experience to an entirely new level,” Mr Rolls said, explaining some Brisbane suburbs had up to 80 per cent of properties affected by the floods.
Rental Express was managing 150 properties that sustained damage, with another 800 without power for an extended period of time. Damaged properties meant losses for Rental Express, but the floods presented a host of other issues to contend with beyond income. This included tenants breaking leases because they went without power for an extended period, or wanting to negotiate rent-free periods as compensation, plus co-ordinating the services of tradespeople who were in very short supply so charged extortionate prices.
Staff and their families and friends formed teams of up to 10 people to clear, strip and clean badly affected properties for clients who were not able to do it themselves.
“It probably took us six months to really get over that period where we had the floods come through and wipe out a lot of properties,” Mr Rolls said.
The floods also made property managers think more carefully about insurance because many owners and tenants were not covered for the damage caused. “We’ve learnt that unless you read in detail your product disclosure statement and probably get a legal opinion on it, you really don’t know what you’re covered for until such time that something happens,” Mr Rolls explained, saying the definition of a flood caused many headaches that took weeks to finalise.
“The flood was considered to be rising flood water and most standard insurance policies don’t cover that; they cover for flash floods. So there were many, many properties that sustained hundreds of thousands dollars damage that they could only claim up to about $15,000 in costs.”
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