Blog / Time Management
Stephen Jackson, The 5 folders, Vacating
In the last issue of Hot Topics, we introduced readers to his highly successful 5 Folders approach to property management. Stephen devised the 5 Folders approach because as he says, “It enables us to make better decisions, have better conversations, get resolutions quicker, and makes people happier.”
Stephen believes that the greatest benefit that The 5 Folders gives agents is, “the ability to think clearly. Business is about building relationships, not just surviving them.”
The 5 Folders approach is not just a way of organising paperwork. Rather, it’s a decision tree. As Stephen explains, “It’s a way of thinking so that property managers can make good decisions because it’s the good decisions that reduce their work.”
Implementing the 5 Folders approach is not as simple as purchasing five different coloured folders and allocating different aspects of your business to each folder. For The 5 Folders to work, Stephen believes that all aspects of property management need to be integrated, in a portfolio style operation. Stephen says, “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 First Folder of the 5 Folders is: Vacating.
Whereas selling is all about encouraging change, Stephen Jackson sees good property management as a process of numbing – of making a place so attractive that tenants reduce their desire to move. For property managers, vacating is one of the most time-consuming aspects of property management. When a tenant advises of their intention to vacate, Stephen suggests the following approach.
Act on a vacating notice when you’re ready
When a vacating notice arrives, Stephen advises acting on it the next day because you will be busy doing other things. “Put it in the vacating folder until tomorrow – it can wait.” He also says, “Don’t do the whole process at once. Typically you’d send letters, talk to owners, tenants, get the property on the market, advertise, organise access, book in open houses and so on all at once. The reality is that it doesn’t all have to be done that first day and that first moment, so do what’s important for the time you’ve got. “Look at the other work in your vacating folder. Always work with date follow-up so that you know when you’re going to follow it up and set dates with a view to what else you’ve got in that folder, and the dates that are in there, and workloads and things like that.”
Talk to the tenant
Talk to the tenant. Find out why he or she is moving, where he or she is going and when he or she is going to move out. This information is useful when talking to the owner.
Deal with owner expectations
Stephen says, “When handling vacating, your goal should be securing a long term, no headache tenant. You have to help the owner – set up the lease, make sure the property is presentable and suitable for the market but the most important part is securing the best tenant.” Stephen believes that the first thing you have to do is deal with the owner and try to get them to focus on what they need rather than on what they think they want. Owners have different wants. Stephen says, “For one owner, it’s to get a tenant quickly; for another, it’s to get the best rent; and for another, it’s no headaches. What we have to do is manage each of these intentions so they come around to the best outcome which is, in our case, a non-problem tenant who’s going to stay for a long period of time.”
Prepare a confirmation letter for the tenant
Stephen says that, “For the week of vacating, write down the date so that you know that during this week the tenant is going to vacate. This is the time to send a letter to the tenant about how he/she needs to leave the property. A lot of people send that letter as soon as the tenant gives notice, which is 21 days, and, as I’ve said in the past, unless a person is aware they need information, any information you tell them will be lost.” “If you send a tenant a letter as soon as he/she’s vacating, or has given notice that he/she’s vacating, on how to clean the property, I’ll guarantee you that ends up somewhere.
“If you send it say three or four days before he/she vacates and you’re talking about what is necessary to get your bond back, right, which is a key motivator for them, and then suggest that he/ she needs to make an appointment with you for you to come down and do the final inspection and it’d be a good idea if he/she was there and had some cleaning products, the funny thing is you can reduce your bond claims by a third if you do this.”
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 that 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 says, “It is not a profit-making 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, strata complaints and notices where the owners have decided to give the tenant notice to move out.
Stephen Jacksons 2 folders is part of Real Estate Academy's Hot Topics Property Management Audio Program.
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