Unlike funds management or other financial advisory roles, the profession of property management is not well respected. Why is that?
Even if an investor has only one property, their property manager is effectively entrusted with managing an asset that’s worth hundreds of thousands or even millions of dollars. But unlike funds management or other financial advisory roles, the profession of property management is not well respected. Why is that?
The answer is not rocket science. It’s all to do with history, the property management’s parent profession of real estate sales. Traditionally, real estate sales businesses have been set up and operated by excellent salespeople who are not necessarily excellent property managers or business managers. These principals have focussed largely on listing and selling property, with property management usually something on the side that’s almost grudgingly included. Often run as completely separate divisions, the property management business is unlikely to have garnered much of the principal’s attention.
Of course ironically, if that principal went to sell his business, his rent roll was the only component with any real monetary value. All of this is not new information. Over the past decade, there’s been a growing awareness that property management can no longer be treated as the poor cousin of real estate. It’s clear that if the same trajectory were continued upon, it will only be a matter of time before another player in a related financial services industry moves into the property management game, separating it from real estate sales entirely and applying their business practices to our treasure chests.
As a result, genuine efforts have been made to upskill the existing property management workforce and improve its service offering. But still, property management’s poor reputation prevails and the risk for real estate practitioners continues to grow.
How do we change this?
What’s the missing link?
I believe it’s attitudinal. It’s in the language our industry uses. We manage property, instead of maximising real estate investments. We call our clients landlords instead of property investors. We process requests for repairs and maintenance, instead of recommending capital improvements that would positively impact yield. We don’t ever talk to these landlords about their loan structures, or depreciation, or leveraging into another investment. We don’t even have relationships with other professionals we could refer them to for advice.
When I say we, I’m actually talking about the broader real estate industry. In our office, it’s a completely different story. And I expect the rapid growth we’re now experiencing is a good indicator that property investors really do want more.