25 steps to add property management to your real estate sales business
If you’re a real estate agency that focuses on sales and you’re looking to add property management into the mix, Kathryn Surace, Kolmeo's Relationship Manager and property management expert, has 25 considerations for you to establish a strong portfolio as well as grow your real estate business.
1. Take a property management course
The very first step in delving into property management is to ensure that you and your team have the correct qualifications to run your firm and operate smoothly from a legal perspective.
As a licensed estate agent, you can act on behalf of a vendor, landlord, purchaser, or tenant in Victoria to sell, lease or manage real estate or business. There are minimum educational qualifications required when applying for an Estate Agent’s Licence, such as the CPP41419 Certificate IV in Real Estate Practice and the CPP51119 Diploma of Property (Agency Management). We’ve got all the training you need in our Property Management Courses to Ensure Success article depending on the state you operate in and it includes some handy skills too.
2. Obtain the right business licences
Across Australia there are various licences that are needed to carry on a real estate business. You will need to meet certain criteria to be eligible. It is important that you understand your legal responsibilities and are compliant with the relevant state and territory requirements.
In NSW, WA, ACT, TAS a corporation licence is needed, in QLD a corporate real estate licence is needed whilst in Victoria, NT, SA an Estate Agent’s Licence is needed to conduct a real estate business. Each of these licences has certain criteria that need to be met before they can be obtained; such as in Victoria, the business needs to have an officer in charge who holds a current estate agent’s licence.
A little side note. Owners aka landlords are referred to as residential rental providers or simply rental providers in VIC and tenants are renters. If you're working in VIC, make sure to use the right language when preparing your documentation and any material for your real estate agency.
3. Keep up with current legislation
Property management is dictated by conduct rules that are held under the Property, Stock and Business Agents Regulations (2014) in NSW. Other states have equivalent legislation, such as the Property Occupations Act (2014) in QLD and the Estate Agents Act (1980) in VIC.
You can keep up to date with current legislation by accessing it online for the state you work in. A great way to engage with any changes in your state is through your state’s real estate industry institute. There’s the Real Estate Institute of Australia (REIA), the peak industry body across Australia, but also individual bodies for each state which you can find on the REIA Our Members section.
4. Subscribe to property management news
You may already subscribe to relevant industry magazines and newsletters, and already receive all the property sales and property management news you need. If not, head to Elite Agent, Real Estate Business and the Real Estate Conversation where you can subscribe to free daily newsletters, paid subscriptions for additional content or even monthly print magazine subscriptions. These websites are also a great way to find real estate events that you can attend and engage with more property management professionals to network with and learn from.
5. Set up a rental trust account
While you’ll already have a trust account for your sales work, you’ll now need a separate rental trust account set up. Contact your bank to have that account set up so that you can manage payments such as rent, rental bonds, advertising fees and maintenance fees.
Similar to your sales trust account, these rental trust accounts can be inspected by a government consumer affairs agency, so it’s important to have them set up correctly and use them for their intended purposes.
6. Outline your internal processes
Have a think about the different processes that you’ll need for your property management work, so that you can run it optimally and make it easier by having steps to follow for certain scenarios.
Think about the internal processes, such as a new property being signed up in your portfolio, or the steps in leasing out a property from start to finish. The life cycle of a tenancy can be a complicated process, so it is good practice to create a standardised checklist, as well as having procedures for your team to follow to ensure uniformity and efficiency for every client.
Other key steps such as bond claims, bond refunds, key management, arrears policy, new management authority, marketing properties for new tenants and taking on new clients should all have a standard process for you and your team to work through. Even if it’s just the one person managing properties, a standard process can help by ensuring nothing is missed and little time is wasted thinking about what’s next. It’s also great for your business reputation as you become known for the way that you consistently deliver a particular experience.
7. Get set for managing bonds
Working in property management means you’ll now be managing bond payments. And this means you need to set up a bond authority account for your business with the relevant authority in your state. In Victoria, the Rental Tenancies Bond Authority (RTBA) manages and handles all related processes.
Similar to our previous tip on internal processes, it’s super handy to have a standard procedure for how you’ll handle and manage the bonds when it comes to new tenancy processes, as well as when it is time for a lease to end.
8. Set up your business on different advertising portals
You’re already publishing your sales properties on the various advertising portals when listing properties for sales. You’ll need to make sure that you can publish your rental properties there too now.
Both www.realestate.com.au (REA) and www.domain.com.au have handy sections on their websites on how to set up your account. REA has a section in their footer, Advertise with us, and Domain similarly in the footer, Domain Marketing Hub. Both these sections outline the steps for creating a subscription for advertising properties. And they have a list of things to do while you’re waiting for them to reach out to you to get your agency rental profile ready, like saving your logo, preparing your profile, and reading about the subscription and products they have available.
While these two websites are pretty standard for sales and rental properties, there are additional ones out there like www.homely.com.au and specifically for rental properties like www.rent.com.au. You might want to start with one or two advertising website subscriptions, but then consider adding extras so that you can get additional eyeballs on those properties.
9. Prepare your standard letters and templates
Every real estate agency has standard documentation. You’ll need templates for various documents like lease agreements, managing authority agreements, new tenancy applications and standard letters to name a few.
Here at Kolmeo, we already include a range of these documents and templates in our system. They are automatically branded using your logo we have on file for your real estate agency. We make it easy for you to use these documents and templates straight away and they merge in with the data we have for your clients and their properties, so you can communicate with tenants and property owners effortlessly.
10. Utilise an effective tech stack
Taking advantage of the best applications for property management specifically is ideal as working smarter, not harder, is one of the most effective ways that you can optimise your workflows and keep your operations running buttery-smooth. We believe that the tech in our lives should make life easier and not overwhelm us. Whenever you can, strive for simplicity and effectiveness in your tech stack.
There is an ever-growing stream of new tech coming out every other week, but what are the real, simple and most efficient applications that you should be using right now? Tools such as Mailchimp for email marketing, Canva for graphic designs and presentations, Zoom for video conferencing with staff and clients, and Slack for internal team communications are our hot tips. Finding what best fits you and your company can be tricky, and every now and then you should consider whether all the stack is necessary or whether you can reduce some of it.
11. Choose the best property management software
For your property management software specifically, we want you to get in touch with us here at Kolmeo so we can help you with all the tasks you need to perform. Collect rent, set up automatic rent reminders, manage clients and suppliers, set up inspections, manage maintenance requests and more all on the one application.
Plus, you’ll have access to handy documents and templates that merge with your client data, as well as advertise straight to those property advertising portals we mentioned earlier. Whether it’s 1 or 10,000+ properties, Kolmeo can help you manage everything. We know we’re biased but it’s the perfect property management software to get you on your way.
12. Keep your website fresh
You’re now embarking on your property management journey, so you’ll need to update your webpage to show that you have introduced this property management service.
You’ll find that real estate agencies manage this section of their website differently. Some list property management, others label it rentals. Some list out the departments such as sales and property management. Others list out the activities, “Buy, Sell, Rent, Manage”. Do a little research and see what you like best before rolling that out. And later on, as you grow, you can conduct user research with people that are visiting your website to see what they actually prefer.
While you update your website, also think about the key ways people will reach out to your business. Should you set up any additional email addresses to manage property management enquiries? And would an additional phone number for rentals be handy?
And if you’ve grown your team by adding in dedicated people to your property management team, make sure they look great by taking professional photos of your property managers as well as your sales managers. You want to show the same quality approach to both parts of your business and spotlight these new faces too.
13. Advertise on social media
In addition to having a strong website, you need to be visible on major social media channels as well. Using Facebook, Twitter, YouTube or LinkedIn to promote your services, blog, and any other relevant industry information onto the internet is just one of the many digital channels available for you to use. Repeated exposure to your brand is how you build trust and personal relationships with prospective clients, so you need to ensure that all your social posts are of high quality and are being uploaded consistently.
While networking with your local area, optimising your digital presence and engaging with your community are great ways to get your brand out there and attract new property owners, advertising is an important way to increase the reach of your marketing and get your brand top of mind.
The rule of thumb here is to add the channels that will be most valuable for your business and not spread yourself thin across too many places. If you want to dedicate your focus on LinkedIn, make sure to secure your social media handles across the other social media channels so you don’t lose access to your business name down the track. This is increasingly important in the age of cybercrime, and you don’t want the risk of fake accounts being used to scam vulnerable clients thinking it’s a legitimate part of your business.
Once you have these accounts, make sure to update your passwords periodically and think about how to best manage these accounts if you’re using team members or agencies for social media.
14. Write blogs
Blogging is one of the best ways to get traffic to your website. If people are searching for certain topics, the best way for them to engage with your site is through blog content as the rest of your site content isn’t necessarily going to address their questions.
Blogs are great for Search Engine Optimisation (SEO) which is optimising your website – your online presence – to make sure that it ranks high on Google for when those folks are searching on the web.
Posting a few quick read articles every month that provide readers – and Google – with an insight into the property market can be a real testament to your expertise in the field.
You could provide short monthly or quarterly updates that give your clients an understanding of the current real estate climate such as forecasted rental prices and the impact of interest rates. These blog articles build trust in your brand and also add to the client experience as a value add to the service they already receive.
Blog articles are great ways to connect with prospective clients too, as they can build your reputation in the broader market, proving that you are experienced in the field and that you’re here to help and share your insights.
15. Seek professional advice
If you are worried about missing something in the technical process, or have any doubts regarding compliance, speaking to a commercial law firm can be useful as they know legislation inside and out.
Business advisers and industry experts are easy to find online, as well as those who specialise in property law.
Another great free tool is to just use the official consumer affairs site for your state, which will always have the most updated legislation on all the specific topics you’re looking for.
16. Build referral relationships
A referral partner is an individual or a business, who willingly recommends your brand to the people they know. As a close associate of your business, a referral partner will recommend your services to people they’ve built relationships with.
This relationship is powerful when it comes to closing a deal for a new property management client. The referred party trusts the referral partner’s recommendation, making them more willing to consider your real estate agency and ultimately choose your property management service.
Referral partnerships also tend to bring in higher quality leads, AKA people who are more likely to become customers and who are likely to remain your customers for longer periods of time. This results in improved customer retention and a higher average customer lifetime value.
17. Encourage clients to give Google reviews
Reviews go to the heart of every business and Google reviews can really impact how a brand is perceived. One of the first things that comes up when your business is searched up is that 1-5 star rating score that your clients write.
Having positive reviews goes a long way, as word of mouth plus providing great experiences are still one of the most effective ways that will increase your business’s competitiveness in your area.
Responding to reviews is a great idea as it shows you care about feedback. If someone leaves a comment, whether a 1- or 5-star, make sure to write and thank them for their feedback. Don’t copy and paste the same response to each reviewer. And if the review needs a further step to close out the feedback, like changing the way you do something, or passing on a lovely comment to a team member, don’t skip this step.
To dig deeper into reviews, read our article on The Power of Reviews in Property Management.
18. Understand your customer's experience with NPS® surveys
Track your performance and see whether your business’s key performance indicators (KPIs) are being met. Ask your current clients whether they are satisfied with the level of service that they are receiving at this current point in time.
A traditional CSAT – customer satisfaction score – is one way to do this. But a lot of businesses have replaced that with the NPS® score. NPS® is the Net Promoter Score, designed by Fred Reichheld in 2003.
Net Promoter Score (NPS®) is a single-question survey asking customers how likely they are to “recommend Real Estate Agency A to their friends and family” with a score of 0-10 with 0 as unlikely and 10 most likely. And the answers are then distilled into the one score – your NPS®. It also has a follow on question to ask for information on why they have scored in that particular way.
Anyone who scores it a 9-10 is a promoter, a loyal enthusiast who will keep using your service and refer others.
Those who score 7-8 are passives. They are satisfied but not enthusiastic so they won’t necessarily refer others and they may be enticed by competitive alternatives.
And 0-6 people are detractors. They’re using your service but are unhappy and are likely to tell others, damaging your brand and slowing your growth.
Your aggregate score across all clients should be reviewed at a regular period, either monthly or quarterly, so that you can see how you are tracking over time, perhaps after you have put a new initiative in that will improve your customer experience.
Make sure to survey both tenant and property owners. And aggregate scores for all customers, vs tenants alone or property owners alone. And across different touchpoints. That way you’ll understand more of the areas you can improve on.
It’s important to track your NPS score for your business alone, rather than try to compare scores with other companies and across industries. If you’d like to track between competitors, a special survey asking specifically about competitors and likelihood to recommend them vs you is how to do this.
19. Understand your customers (more)
As you start to grow your customer base with more property management clients, it’s a good idea to get a better understanding of your customers every year to guide your business initiatives.
While NPS® surveys are a great way to get regular insights into how your tracking and how your customers feel about you, you might want to get in the room with a customer or two to get more detailed insights from time to time.
You can run a series of customer interviews or focus groups on a particular topic, say part of the leasing experience or to explore how maintenance requests work for them. Decide how deep or broad the insights you want are, consider the type of customer you want insights from, craft your interview script and go live with your first interview. Once you’ve conducted it, write up your findings to refer to later.
And if you want to explore your findings with all your customers to see what holds true for the overall group, rework your interview findings into a survey that you can send out to the broader group. You might be able to find a cluster of customers who prefer to self-serve a particular part of your service, say an inspection, that you can then introduce a new product for.
20. Understand your metrics and financials
Metrics for your business are important so that you know how you're tracking. “You can only manage what you measure,” is a common saying in business, as it is vital to understand why your real estate agency is performing the way that it is, and then make decisions based on those metrics.
NPS® was one of the key performance indicators (KPIs) you can track. But there are a stack of other metrics you should look at. Vacancy rates, total properties under management and property values are some of the metrics we outlined in our article Property management metrics for your rent roll.
21. Nail your pitch
Do you know what makes your business uniquely worth working with? While you’re moving from retaining the management of properties you’ve sold to finding new rental managements altogether, you’re going to have to refine your pitch. And you can improve this pitch over time as you work out exactly how you’re positioning your agency vs the rest of the market.
To think about nailing your pitch, first think about what options property investors have for managing their properties – these are your competitive alternatives. Determine how you’re different to these competitive alternatives and why this matters – the value you’re uniquely delivering.
22. Understand competitors
As you’re getting into your real estate agency business, you’re already across the competition and you’ll also know who’s who in your market. Nailing your pitch in the step above means you’re already looking at your competitors to figure out how you’re different.
Every so often, you should spend a little time reviewing your competitors so you know what they are up to and any additional services they have introduced or whether they are expanding into new territories. Set up a Google Alert to follow their progress and subscribe to any newsletters they might have on their website. Review their website for new content as well as their social media pages for their updates.
While you’re reviewing competitors to see what they’re up to, you’ll need to make appropriate strategic decisions on whether to position with or against them. Should you introduce the same additional feature because the rest of the market is, or should you buck the trend and do something completely different?
23. Grow your team
If you’ve picked up some managements and are starting to grow your rent roll, your mind will likely turn to growing your team and thinking about hiring.
There are many ways to think about your team and how to structure it. Some tasks can be outsourced and offshored depending on the task and the legislative requirements around it.
When you’re hiring new team members, you could list new job opportunities on LinkedIn or Seek, or you could use a hiring agency to find new talent. There are even agencies that specifically recruit for the property management industry.
As you grow your team, think about upskilling and training for your team, and this should underpin the positioning of your business and the strategic decision you’re making for the type of service you’re providing.
24. Protect your intellectual property
In setting up your original real estate agency for your property sales service, you would have already registered your brand trademarks and protected this type of intellectual property (IP).
But as you grow your business and have additional team members working for your business and having access to your data as well as learning your particular processes and systems, you should think about protecting all the valuable intellectual property you’ve developed over time.
Think about employment contracts and how they cover your business IP, as well as any additional contracts like confidentiality agreements. Chat to a legal professional to work through anything in this area and make sure you’re protecting.
And also make sure that you’re protecting your intellectual property by monitoring your brand too. Set up a free Google Alert for your own brand or even use a simple brand tracking tool like Brand24 for a small fee to see what people say about you but also in case someone starts using your trademark without your knowledge or permission.
25. Turn on additional revenue
As you settle and review your financials, you might want to think about additional revenue streams like ancillary services. Ancillary services are those related services that sit along the property management customer journey for property owners or tenants… or both.
Add a property insurance product into the mix like landlord insurance and tenant insurance. Add a connections service or a moving service for tenants. And partner with a tax depreciation business or a conveyancer service for landlords looking to buy another property.
You can also increase your revenue if you help owners make improvements to their property that increases their value and makes them a better property for tenants. So partner with the required maintenance businesses like carpenters and painters to upgrade your rent roll.
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You made it to the end of Kathryn's incredibly helpful list of considerations for real estate sales businesses looking to start up a property management service and retain those properties and new owners as clients. What did you think? What's your favourite consideration you're thinking of testing. Are there other considerations we should include in the mix?