The future of property management

With such low margins achieved in property management, coupled with high expectations from landlords, Consumer Affairs and other key stakeholders, you can almost excuse today’s agency principals of foregoing the need to train their junior agents.

But with such a skill shortage across Australia, it is now more important than ever in our industry to develop a training plan and to invest in our younger agents.

If we cast our minds back 10 to 15 years ago – well before anyone knew what a global financial crisis (GFC) was – the property market was ticking along well and most real estate agencies were predominantly sales based, owned and run by sales-based principals. The property management department for many was seen as the principal’s superannuation fund.

A property management fee income of seven per cent may have been sufficient to charge a landlord, but now the expectation of a property manager is more akin to a professional services provider, such as an accountant or financial planner.

But how can we expect landlords to see property management as a professional service, when the industry itself still doesn’t see property management in this way? Wouldn’t it be nice – albeit wishful thinking – if an agency talked about their ‘staff development and training plan’ in a new business listing presentation and used this as a point of difference over their competitors, rather than who has the lowest management fees.

A prudent agency should have a training and development budget in their business plan, which should include conferences such as LPMA, AREC and ARPM. It should have a budget for training CDs, MP3s, books and speakers, and it should include both internal and external training programs.

The challenge to our industry leaders, industry associations, principals and more importantly, our current senior managers, is that unless we start to focus on staff development, staff training, and up-skilling our junior staff (with less than three years’ experience), the industry is heading for some dire skills shortages in the next five to 10 years.

A possible solution is to make the entrance requirements to work in the industry more involved and more detailed, perhaps making the course run for longer, as the current one is quite easy. Maybe the course should be 50 per cent classroom and 50 per cent practical on-the-job training.

The state and federal governments should offer better incentives for employers to not only hire junior staff, but to undertake their formal training – in accordance with a structured training plan.

Good quality property managers are very hard to find and unless the industry changes its way of thinking when it comes to training and professional development, in 10 years’ time we won’t have any trained staff to manage our portfolios.

As custodians of the industry, you should take a look at the ways in which you can introduce skills to your junior staff.

Start now and speak with the registered training organisation in your state to find out how to up-skill your current staff.

MICHAEL FURLONG is the business owner and director of MAP Real Estate in Melbourne