Ray White Lower North Shore certainly needs no introduction. They are one of the top two sales offices within the Ray White Group in New South Wales, and regularly among the top three within the entire 1000+ Ray White office network. To add to their successes in the sales arena, this year, they also won the Property Management Business of the year. We talked to head of property management, Sarah Latham about how they developed their winning formula.
Sarah, congratulations on winning the Ray White property management business of the year award.
I’ve been trying for several years to get that award, so it was a considerable achievement. Each year as they were about to announce it, everyone in the team felt this great anticipation, like “maybe this year is our year!” We knew that we had achieved more this year than previous years, in terms of best practice and consistency. And, as it turned out, this year – was our year, so it was nice to be recognised for that.
Can you tell us what it takes to win an award like this against such worthy competition?
Each year we try to fine-tune our processes and procedures as we grow our business. I have personally made many changes to the department since I started, including setting policies, procedures, staff training, and so many incremental improvements over time.
Your office has set the bar high in terms of growth goals.
Yes, we have a plan to reach 3,000 managements by about 2015. In the first couple of years, we doubled our rent roll primarily through acquisition as well as organic growth. However, the last rent roll we purchased was probably a year and a half ago. Therefore, our rate of growth has slowed a little recently, but we are currently on the lookout for another rent roll. Our ‘New Business Consultant’ has really taken that role and run with it, so whilst we haven’t acquired any rent rolls of late, we’ve had a huge boost with organic growth and referrals from our New Business Consultant.
When I started here, the first couple of years were mostly about ‘tidying’ the existing rent roll and getting it to a standard where we could take on more properties without too many dramas. For the next three years after that, we had a tremendous period of growth – we acquired three or four rent rolls, from memory. Since then, we have levelled off a bit; you need to have periods of stability in between periods of extreme growth, because you cannot have too much change happening for an extended period of time; it is too unsettling. It is interesting when you purchase another rent roll to see how other agencies operate.
What do you think sets you apart from the other agencies?
We feel that the portfolio-based system is probably the best way to operate. I think clients still prefer to deal with one person who oversees most aspects of the property. Our office also does not have a high turnover of staff, so our customers have the same property manager or contact for a good number of years. Moreover, that property manager will know their properties back to front! We have a full time leasing consultant which makes us more efficient; we’re not relying on the property manager to have to get up from their desk, go and show the property, come back, be interrupted with their jobs during the day. We have a well-supported office due to the fact that we have the right number of people looking after it.
We also do not have a ‘blanket rule’ about the number of properties in a property manager’s portfolio, because not everyone operates in the same way. For example, we have one property manager who looks after our prestige properties (above $1,000 per week in rent) and she only manages 130 properties or so, whereas we have other Portfolio Managers overseeing up to 200 properties or more. We deliberately keep the Prestige Portfolio size smaller because she does have to ‘over service’ her clients who can be understandably quite demanding. The work involved in each property in the prestige portfolio is probably three times more than managing the ‘average two bedroom unit’. Without a doubt, the most time consuming thing is when she is showing the properties, sometimes these houses are enormous, it takes a lot longer to actually show people through and outline all the features that property offers. Also, doing periodic inspections, ingoing inspections, all of that is a lot more time consuming with a prestige portfolio due to the sheer size of the properties involved.
What changes have you implemented in the past seven years?
Well, when I started it was – I wouldn’t say chaos – but the department needed some re-organisation! Everyone seemed to have their own ways of doing things, which was not consistent. There was no set procedures manual, no checklists, nothing! Therefore, my first priority was to put together a policies and procedures manual, set up checklists and template letters, and ensure uniform processes for everyone.
These things do not happen overnight, by the way, it took about three years to get our procedures manual together, which has quite a bit of information in it. Every single thing that comes up in property management, every recurring event ¬– for example, the tenants giving notice, new tenancies, advertising, selling a property, losing a property – we have a check list for it all and it is clearly outlined to what everyone needs to do. For example, it will prompt the Portfolio Manager to send out a particular letter at a particular time for a particular situation.
So consistency is part of your “winning formula”?
Yes exactly, because we have everything documented – when people take holidays, for example, someone can step in to fill that position, and they can literally just pick up from where the other person left off. Additionally, this includes new members of staff. When new staff commences here, they have a blue print to guide them, which makes settling in and the induction process so much easier.
We also split our portfolio into areas – so we have a Neutral Bay specialist, a Mosman specialist, a Cammeray, and Cremorne specialist etc. We do this because although the suburbs are close together in proximity, they are remarkably different real estate markets. Kirribilli, for example, is more of a ‘seasonal’ market than say Neutral Bay or Cremorne. This allows our portfolio managers to fully immerse themselves in that area and know about all the features and services that area offers. It also makes it easier for them doing periodic inspections; properties in their portfolio are all in proximity.
You mentioned that you also have a very low staff turnover. How do you retain talented staff in a competitive environment?
With our office, I wouldn’t say it’s wholly about salary, although that does play a part – it’s very much about the culture as well. Everyone in the department gets along exceptionally well. We all help each other. If anyone in my team encounters any sticky situations, I help them. I attend tribunal hearings with my team if they needed, that sort of thing.
We also try to be supportive and we are happy to help people develop their careers through training – especially if they are a valuable employee and we don’t want to lose them to another company! We do lots of in-house training as well – for example, I do in-house training every fortnight and every now and then, I’ll ask one of the team to facilitate the training to shake things up a bit and keep it fresh and interesting. These sessions can cover anything from recent tribunal hearings and outcomes, to other office experiences, as well as idea sharing.
Sometimes we also have revision sessions on the current processes and procedures to ensure that new staff members are up to speed, and that others in the team stay on the right track.
Ray White Corporate also delivers some great online training programs; completion of these are measured in the team’s KPIs. These training programs go through other aspects of property management, such as how to handle certain difficult situations, legislative requirements, and other aspects of the role.
Other than training, what other KPIs do your team need to achieve?
Every month I sit down with the property managers and we set their targets for the month – Some of these targets include; how many rent reviews they need to do, how many periodic inspections they need to do, how much online training, in-house training or off site training they need to complete.
We also have a KPI around communication to landlords, so they categorically must call the landlord with updates twice a week where the property is coming up for re-letting. Then we also have ‘no reason’ calls, because, lets face it, most of the calls to our landlords tend to be negative, such as rental arrears, maintenance, vacating tenants etc. But yes, sometimes they do struggle with that a little bit. They can find it a challenge to jump on the phone just for a chitchat. Still, its part of their KPI’s so they still have to get through and do a certain amount of these calls each month.
How closely aligned are your Sales and PM departments?
As close as they can be in a larger office such as ours. We have these ‘Sales Appraisal Drives’, where the property managers have to ring a certain number of their landlords, and offer them complimentary sales appraisals, so they can keep up to date with the market value of their property. We give out prizes for those team members that finish with the most appraisals.
Our new business consultant also attends every sales meeting to give them updates on leads that the sales people have passed through to property management. In addition, I go in once every two to three months just to be in contact and answer any questions the sales team may have, particularly about the new legislation – for example, as you know, there was a radical change at the end of January. In terms of regular communication, every time we lease a property we email the entire staff to say “just leased (address of the property)”, with the rent we negotiated for it and a brief description. It really assists our sales team in pricing properties they have on the market to inform potential investors the approximate rental return.
What technology is important in the day-to-day running of your business?
We recently changed from Console to REST for our property management software; we needed to reduce the downtime we were experiencing because this is such a large office, and REST seemed just a better fit. Originally it was a massive thing for us to change across to REST because obviously there’s a lot of data entry involved, but the system seems to be a lot more positively geared for larger offices and larger rent rolls.
We also use another system called MyDesktop. That’s what we use to distribute our quarterly newsletters that go out to all our investors and new business clients; it is truly a fantastic program. You can set reminders for absolutely everything, and categorise your contacts under different types – lots of great things that save us time and make us more efficient.
As you can imagine, our accounts department has their work cut out for them with all the invoices and bills we pay on behalf of our landlords. We’ve just recently introduced the ‘bar code scanner’ for all strata levies, council, and water rates notices. This has reduced the accounts divisions’ workload by 25% – 30%.
Finally, our archiving system –probably the best thing since sliced bread! REST has acquired a software program called FileSMART that allows you to scan and store soft copies of anything and everything. It works with REST on statement run, marrying up invoices with statements and emailing them out to our landlords. By using this archive system, it means we’ve been able to reduce the amount of documents that we would ordinarily file, and now only retain important documents such as Management Agency Agreement, Lease Agreements, periodic reports, termination notices, and rent increase correspondence.
What do you love most about the industry?
Okay, well obviously I love real estate! I have several investment properties of my own, and like most people in the industry, I enjoy not being tied down to a desk all day. Being able to go out and look at different properties is obviously a passion.
I honestly do get a lot of personal satisfaction from doing a good job for my clients. For me, striving to give them above an average level of service, and having them turn around and say thank you – thanks for your advice, or thanks for being proactive – that is tremendously rewarding. My position is a bit different now because I am more managing a team, rather than managing properties. I do miss that a lot actually, but I love my job now, and my team are fantastic. It sounds like simple stuff but they actually do return their phone calls, and its rare that I’ll get a complaint about them not doing the little things that they should have been doing. They help each other out, and they genuinely try to give their landlords the best possible attention.
I like to think that I have made everything as easy as possible for them by putting in place all these systems and checklists and I think it’s paid off. If I can help the Portfolio Managers avoid making the little mistakes I made when I started out, then that’s going to save them time and stress.