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Stephen Jackson, A new way of looking at property management
Most agents see property management as an albatross around their necks. Stephen Jackson sees it as an opportunity. And he should know.
Stephen’s agency, Jackson and Rowe is one of the largest and most profitable managers of rental property in Sydney’s northern districts. One of the keys to Stephen’s success has been to engender happy landlords and tenants, which has increased his property managers’ ability to handle large volumes and keep turnover to a minimum. Stephen said, “Property managers who have been with me more than two years are typically looking after over 300 properties.” He added, “If you look at it another way, we manage around 180 properties per person employed, which seems to be a fairly high number in the industry.” The reason why his property managers can handle large numbers is because they focus on building relationships and use The Five Folders operating system – a system designed by Stephen. He said, “The Five Folders enables us to make better decisions, have better conversations, get resolutions quicker, and make people happier.”
Stephen believes that the greatest benefit that The Five Folders gives agents is, “the ability to think clearly. Business is about building relationships, not just surviving them.” He continued, “Some people think that it is a way of organising paperwork such that a twelve hour day instantly becomes six or seven, and that all their problems disappear simply by how they file paperwork. It’s not that. It’s a decision tree. It’s a way of thinking so that property managers can make good decisions because it’s the good decisions that reduce their work.” The Five Folders approach can help a business to stabilise and grow, assist in the retention of outstanding staff, reduce stress, retain good tenants and landlords and most importantly, make property management profitable. However, implementing The Five Folders approach is not as simple as purchasing five different coloured folders and allocating different aspects of your business to each folder.
For The Five Folders to work, Stephen believes that all the aspects of property management need to be integrated in a portfolio style operation. Stephen is of the view that property management, portfolio managers and client or relationship managers should be merged. “What’s happened in the past,” he said, “is that many agencies separated the forest out and made it into individual trees.” While it may be more efficient to separate functions, Stephen believes it’s actually not good business. “We’re property managers; our titles are property managers, but in reality we manage people and, in that sense, we manage clients. Clients don’t like to be subdivided up and their issues are never subdivided.”
The focus needs to be on the customers. “Everything we do is about people,” he said. “Where all our work comes from is in the interactions with our landlords and tenants, and the fact that those interactions do not go the most ideal way for us. The Five Folders is a thing that allows you to work those and work them well. It allows you to make decisions and to be able to talk to people in such a way that they make decisions quickly, comfortably - and they are happier with the relationship at the end of it, and that’s crucial.” Stephen knows that for his model to work, you need to hire the right people – people who are willing to learn and who are not in paradigm lock down. He said, “What we look for in a property manager is not a person’s ability to manage property. To be honest, we really won’t touch people who have been property managers. Most of our property managers have come through reception. We actually catch and train our own. If I took on someone who thought they were working flat out at 150 properties and said to them, ‘Look, we’re going to get you to change in the way you think and behave and process stuff and we’re going to teach you how to manage 300,’ it’d be a bit like Star Trek – she won’t take it Captain.”
In terms of the personal changes you have to make for The Five Folders to work, Stephen believes it is necessary for agents to let go of to-do lists and obsessions with paper work. He said, “I’ve seen property managers literally freak out if they don’t have urgent matters sitting on their desk because they are so scared they are going to forget it. That anxiety is the fundamental symptom of the error of the system. Any job that requires you to have top-of-mind awareness of all the issues just so you can survive the day, is not a system, it’s a death sentence.” Stephen Jackson mounts a powerful case for his operating system. In the next three issues of Hot Topics, we will examine each of The Five Folders in detail, giving you the opportunity to learn how to release yourself from some of the stress that often partners property management.
The Five Folders enables us to make better decisions, have better conversations, get resolutions quicker, and make people happier.
The Five Folders
- The first folder is vacating, which looks after all the activity that is generated once a tenant gives notice through to the tenant vacating. It’s turnover, dealing with tenants moving out and the new tenants going in, and it’s the biggest part of property management and the area where agents have the least control.
- The second folder is applications. This is also part of turnover and involves all the activity around finding and securing the next tenant. Stephen said, “It is not a profitmaking area; it is a cost area, it is a pain. It is where all your issues are, it is where your owners become most volatile. It is a nightmare and you need to control that, you need to reduce it. Turnover is your biggest issue that you have to worry about.”
- The third folder is bonds, and this looks after all the activity from when the tenant vacates and hands back keys through to the finalisation of the bond and the processing of the monies.
- The fourth folder is maintenance, and this involves all the work that needs to be done to a property and all the invoicing and the payments.
- The fifth folder is arrears, and this really encompasses misbehaviour of tenants, so it involves arrears, it involves strata complaints or notices where the owners have decided to give the tenant notice to move out.
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