The Property Management Staffing Crisis

Kirk Stafford. Professional Photo

In case you missed it, property management is in a crisis. Yep, you heard me right. We’re in the middle of a staffing crisis. One in five property managers have left the industry since the start of the pandemic, and more are on their way out. The average length of time a property manager is staying in their jobs, currently is only nine months. So, who is going to be left to run our businesses? and what can we do about it?

 

For too long now property managers have been overworked, underpaid, and thrown in the deep end to deal with conflict and crisis situations they are simply not equipped to deal with, and I really don’t say that lightly, because I’m a property management business owner myself. I’ve been guilty of doing exactly that. I’ve employed young girls straight out of school, given them a laptop, a mobile and a car and said, ‘Hey, go manage these 150 properties, end to end with minimal training and zero support’. Let me tell you, that did not end well. I ended up with a revolving door of unhappy team members who left stressed, burnt out and disillusioned. Up to 30% of property managers have already left the industry in the past two years.

 

One of the Victorian industries leading authorities on legislation and Property Management Coach, Kirk Stafford says we are in a staffing crisis, and he would know, he’s been in the business that long, he calls himself the dinosaur of property management. But, he has some solutions to help us move away from the outdated ways of simply managing properties to a new world with less stress, more productivity, profits, and enjoyment in the workplace.

 

THE DINOSAUR OF PROPERTY MANAGEMENT – KIRK STAFFORD

‘I say this every time I introduce myself, I’ve been in real estate since the Neolithic period during the 80s. I started in the mid 80s came out of the Australian Defence Forces, I was in the RAF for six years, wanted to still do something that involves people because my last company is in the Air Force, I was working in the recruiting environment and found that I really liked actually having that face to face contact with people. So real estate seemed to present me with the options to do that. I went into selling properties for a while, you kind of mentioned me at 23. I mean, I’m not looking too bad now and 23 I look like I was 16. So, credibility was a bit of an issue. But still I managed to get through and within five years I was running teams and managing offices for people. ‘

 

‘I started to get to the point where I started to feel burned out. So I was looking for something else to do with my time that still involved property and found that I made a better property manager than I was a salesperson. That was 30 years ago. And I’m still here. My original hair colours going a bit grey around the sides. But hey, look, that’s not too bad after 30 years doing this.’

 

HOW TO BE A PROPERTY MANAGEMENT SURVIVOR

 ‘Yeah, yeah, you can say that. Look, I’ve spent the first four or five years running a property management division that had, I think the rent roll was 221. I took it on. You can imagine in a recession, we had very high vacancies we also had very high delinquency with rent arrears. I think both of them were getting up around 20%. So, it was it wasn’t it wasn’t a productive rent roll at the time. But we built that over a course of four years for about, I think was about 350 properties before I finally got in the system and I was doing end to end I was doing a lot from cradle to grave from the from the initial inspection right through to the outgoing inspection, the only thing I didn’t have to touch, fortunately, was the trust accounting. That was back in the days when the software that we had, or that we have now, which just wasn’t even a thought, we were using ledger cards and Kalamazoo, so it was all triple, right carbon receding, and all those sorts of things, which was just madness. I left that role after about… I think I finished there after five years, and then went off and did my own thing and built what would now be called a disruptive business with a property management specific company,’ he said.

 

‘I’ve stayed pretty much doing that same sort of thing both for myself and for other people along the way. Over last… well, now that’d be 25 years 1997 to now is 25 years, I’ve built a couple of companies who are self-sold rent rolls, then go on and built rental divisions for other companies. This time last year, I was doing it for one of the major boutique developers in Melbourne. I ran into the staff from that organisation only a couple of mornings ago at a breakfast and they’ve gone from one body to four as a result of the structure that I put in place. So, they’ve done very well, and they’re going to continue to grow. But now what I’m doing is mainly consulting work, I also do a fair bit of public speaking, and some training and some coaching. So that’s Kirk Stafford in a nutshell.’

 

HOUSTON WE HAVE A PROBLEM IN PROPERTY MANAGEMENT?

Houston, we’ve actually got a problem in property management… and it’s a staffing crisis. But can you go back to the beginning for us and let us know why and how you think that we’ve got into this situation, where property managers running for the hills never to return?

 

‘I think it’s a historic one. It really is. This goes right back to the view that property management was an add on to a sales business. When I started in Melbourne, out in southeast and in a place called Frankston, which was a rough and tumble area in some parts at the time, I was the only male property manager there, which gave me a distinct advantage as well. Because I was unique, we actually treated the rent roll as a business unit. Whereas all the others were just added on. There was no plan of growth, there was no plan in training the staff, there was no plan to support the staff. I’m having this conversation with directors and also with recruiters for probably 15 years that we’ve just not got any pipeline of property managers coming through.’

 

‘So, this isn’t a new problem. But it’s a problem that we’ve just let go. And because it’s just gone into the too hard basket. Now what we’re finding is that it’s coming back to bite us because even though staffing numbers were reasonably okay, before 2020, in the first 12 months of the pandemic, the Australian Financial Review report last year said that we’d lost 30%. There’s another survey that’s coming out, I think it was about three or four weeks ago, that say we’re going to lose another 25%. I don’t know whether the number is going to be quite that high. Because the survey sample was quite small. But still there’s property management there were surveyed, and there’s quite a few of them that are going and if that does expand out, well, that’s 50% of our cohort gone in a three-year period. Then while there are some people coming through the replacement, they still need time, they still need training, they still need support. I think a lot of directors now are starting to realise that their PMS are mission critical in terms of their overall business plan. So, they need to start doing something to show them that they matter or they’re just kind of fall and burn again,’ Kirk said.

 

WHO WILL BE LEFT TO RUN OUR PROPERTY MANAGEMENT PORTFOLIOS THEN?

‘You get to the stage, and you probably have to say that I’m one of the people that would fit into that from the industry. Two years ago, I was running a division of 12 people, we had over 1000 properties under management. That was the point at which I’d just said okay, I’ve just come back from a Holiday in Japan. I don’t want to play this game anymore. I had a portfolio of 145-155 properties I was managing, plus staff and I just don’t know too much. I’m not going to do it all. You’ve got to start to look at this whole thing as a unit within itself, it’s got to be properly resourced, both in terms of the human resource, the people writing it, but also all the support underneath them.’

 

‘That includes support from directors, that includes making sure that they’ve got the right training, making sure they’ve got the right structure within the officers, the right equipment, to do their job. I’m not just talking about having the little bit of tech here and there. Unless we address this problem of the staff exodus, we’re not going to have an industry. We can only address that by bringing new people in, who want to do the job, but they’re going to be tech savvy people, if we’re bringing in the younger generation. They are… I look at my daughter, who’s now 30.  I look at her and the tech that she’s using. I’m just going, how do you do that? That’s what is the expectation of the next generation coming through, that they’ve got adequate tools to support them, and they’ll use them. They’re not afraid of technology, they will certainly be using,’ he added.

 

NEW PROPERTY MANAGEMENT TECHNOLOGIES

Speaking of technology, what new technologies do you think every agency should be adopting, or what are the must haves in terms of efficiency, improving productivity and profitability, but most importantly, creating that less stressful and more enjoyable work environment, for property managers?

 

‘A lot of the tasks that property managers do can be automated, from the handling of the initial inquiry from a prospective tenant through to booking the appointment, through to reference checking the tenancy application, all those processes can be can be automated, and there’s tech around that can do it, then you start to look at other processes within the office that you can automate or you can have technology assist with things like; electronic signatures on documents, now, people have suddenly started to realise over the last couple of years that… yes, they can do that. We’ve been forced into working from home, particularly here in Melbourne, we’ve spent nearly nine months, out of the 18 months of the real pandemic, we spent nine months of that being locked down and told to work from home. So, we’ve had to adapt a lot of technology, you’re going to have tenants doing their own routine inspections every so often. Whether you do that as a consistent thing or not, is up to an individual office. But we’ve got technology there, that’s going to enable us to take care of the routine inspections as well, we’ve got tech that will act as a chatbot and report maintenance, and then load it straight through into your property management software.’

 

THE 80/20 RULE IN PROPERTY MANAGEMENT

‘Everything now is starting to tie in. We haven’t got one programme that does it all. But we’ve got a lot of little programmes that are filling the gaps that do integrate with most of the proprietary software that’s out there. There’s going to be more to come through. I don’t know what the next iteration is. But the thing is, this is designed to make the property manager’s job easier. It’s not designed to replace them, it’s going to take away from the grind stuff that we had to do. And free us up to do other things, it means that we’re probably going to be able to do more with less people, which is really the way that the industry is heading. It’s just going to make their lives a little bit less stressful. It’s all that stuff working away in the background while you’re on the phone talking to your landlord or developing a relationship with either them or the tenant. All this is whirring away in the background, taking care of all the stuff that you spend the majority of your time on. If you look at the Pareto Principle, which is the 80/20 rule… 80% of the stuff that we do, provides us 20% of our income. So why are we focusing our time on that. Whereas we should be focusing on the 20% of the stuff that is actually dollar productive.’

 

WHAT ROLE DO PROPERTY MANAGERS PLAY IN THE STAFFING CRISIS?

Building relationships and customer service is our dollar productive tasks in my mind.  But I’ve been the business owner that I’ve adopted all the software early I moved across I’ve had electronic signatures for years. I had ‘PropertyMe’ early on. I even hired VAs and I’ve got multiple VAs now in my business. I’ve had massive backlash from property managers, not probably so much this new generation coming through but older generation property managers. I had four resign in one day when I said we were changing from console to ‘PropertyMe’ and implementing VAs. So, your property managers I think need to have a little bit of ownership here as well. So, what do they need to do to show up differently and if we’re going to improve the working environment and the way that we work, what’s probably managers, I guess part in all of this?

 

Kirk said: ‘be open to the change, be open to the improvements. These things are not actually going to make a property managers life more difficult; they’re going to do the opposite; they’re actually going to free your time up. As I said, really, you’re not going to be spending time listening to a tenant complaining about a dripping tap, they’ll go on to onto their app… open it up…  bang, bang, bang, my taps dripping, here’s a photo of it, they will then respond back to them saying “thank you got it” load into the software, we’re going to progress that now. I think the next iteration of that, that sort of software is that it will give them progress updates as they go. I’m looking at a couple at the moment that are promising, they’re going to do that, but yet haven’t shown me the automations behind it. But if we can get away from those follow up calls that they make to us and get us to the point where the conversations we have with these clients, and I use the term client, because both sides of the equation are important, neither is siloed off from the other, you can’t have a landlord or a tenant without the other one. If we don’t have one or the other, we don’t get any management fees. So it’s as simple as that. So, a business unit is all or sort of all focused on maintaining both those relationships. But we can spend our time on more constructive positive, and as you said before relationship, enhancing conversations, rather than trying to explain that the plumber hasn’t, you know, why the plumber hasn’t been there?’

 

THE FUTURE – PROPERTY MANAGEMENT REIMAGINED

‘I don’t have an easy answer for it, because we’re going through such massive change at the moment. A lot of it’s been coming for a while… I’m not the only one that talks about profitability, I look at it from a point of view just because you’ve got the largest rent roll in town doesn’t mean that it’s an effective business unit, that doesn’t mean that it’s profitable. We’re so busy focused on volume. And I’ve said this, I’ve heard this once many years ago, and I’ve had it sent to me by a couple of other speakers in forums I’ve been in. ‘Volume is vanity, profit is sanity’ There’s another little bit that goes in there and that is that ‘cash flow is key’ Now, if you’re just focused on purely building up the size of the rent roll, you’re focusing on the wrong part,’ he said.

 

‘We need to be focused on what is good business. And good business is all about profitability. It’s all about maximising your income from a property. Meaning that we’ve got to get away from this, this ridiculous fee discounting, which I don’t think we ever will, because they’re always going to be people who think that the only point of difference, they’ve got is to drop the fees. But if that’s all that you’re relying on to attract clients, you’re probably also attracting the wrong clients, you’re attracting those clients who, who have that discount mentality and don’t want to be spending great deals of money on their properties.’

 

WHAT’S THE BOTTOM LINE?

‘So you’re going to end up with mostly C rate landlords, mostly C grade properties, because you don’t get a C rated property with a great owner, you’ve got to take the view that if it’s not good business, and if you can’t get your benchmarks out of a property, and when I was running my own business, when I’ve been running businesses, for others, we’d look at what our annual income from the property was. And we would not list a property below that. We’re not talking about percentages, we’re looking at dollar income, because obviously, you know, 7% of a property $300 a week is vastly different to 7% for property and $1,000 a week. So, you can look at what your benchmark is, and you don’t lose below that. It means that what you’re going to end up with a different scale of commissions based on percentage, or you just look at and go, well, that’s my flat rate. That’s it, it’s every property I manage, it will be at x number of dollars, and that’s going to come down to your breakeven point and what profitability that percentage you want from the property. But in terms of the overall in terms of the future, and what a high functioning division looks like. It’s seamless. It’s a happy place to work. It’s well staffed. It’s got good levels of support from the directors. It’s got people there who actually want to be in the workforce and want to be in that workplace, and who can you use the technology and understand both the tech and understand the structure of the business, but also understand the importance of the relationships with both sides. That can take any one of a number of forms. You talked about the blogs that I’ve written recently, standby, I’ve got a couple of others coming out. I don’t think a lot of directors are going to like what I’ve got to say about incomes.’

 

BEST ADVICE FOR PROPERTY MANAGERS STRUGGLING WITH THEIR JOB

‘I actually gave a really good talk on this on Monday to a group of Sydney property managers. One of the things that comes out of it is you’ve got to be open to the improvements, get away from the word change. If I said to you, we’re going to change things around here, your immediate reaction to that as a defensive one of their protective when you feel, you’d actually feel your solar plexus tighten a little bit and not appear in your stomach. Because change is always seen as, as negative. Start to look at change as improvement. If I said to you, we’re going to make some improvements around here, all of a sudden, you’re going ‘Oh, really great. What are they?’’ Kirk said.

 

‘So, it’s just that one word that can change that it just switches people’s mindset around. The other things to look at, particularly as property managers is to understand that this, your job is an important one, your role in the relationship between both sides is vital. But the job’s not about you don’t take it home with you. Give yourself a break during the day. And unless you’ve royally stuffed something up, whatever’s going on at the property or in the relationship between the landlord and the tenant isn’t your problem, it’s your solution to find. But one side or the other. In a lot of cases, we deal with a lot of frustration, a lot of the time, we’re trying to balance out the rights and obligations of both sides. And sometimes they come into conflict, it’s just a matter of finding that middle ground between them. Getting it to the point where you can walk away at the end of the day and not take it home with you and spend the entire night either thinking about it or talking about it with your partner or your housemates or whoever, and give yourself some mental relief from it.’

 

‘At the end of the day, people who probably knows some principles probably aren’t going to like this. At the end of the day is still just a job. It doesn’t define you, it’s not your whole life, there are much more important things in life than your job, you have the job and the income from it, to enable you to enjoy your life, not wrapping your whole life up in your job. So, separate the two off. Remember that it’s not all to do with you, whatever the problems at the property are or between the two parties of your creation, it’s up to you to solve and if you solve them well for both sides, you go and look like an absolute star in their eyes. But it’s still not your problems. Be open to some improvement and be able to some change and some personal growth, look for some training, do some reading, watch some podcasts, listen to webinars, go for a walk, and plug it in as you go for a walk. That’s actually probably counter to some of the other stuff that I talked about with mental health and that is, leave your phone at home and go for a walk and just engage with wherever you’re with and your surroundings.’

 

Some amazing advice there for Property Managers considering leaving the industry. It really doesn’t have to be an extreme solution to your struggles like quitting and finding a new career. Some simple steps to get you started; leave your work at work, in other words put some boundaries in place; take on some personal growth and development ; and engage one of the  growing number of mentors, coaches and trainers the industry has. There are rewards to reap you just need to find the mindset and resilience to accept the challenges and move through them. You got this!

 

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