Staff training and targeted advertising spend key to profitability for property firms: Rent survey

With property management making up an average 56% of agency revenue, staff training and marketing spend across the best channels are key to increasing profits, according to a survey data by rental property website Rent.com.au.

Australian property management heads, principals and business development managers were primarily concerned with four key risks to their agency’s profitability: staff turnover, training, rent roll growth and the cost and direction of their advertising and marketing spend, the survey found.

Conversely, key contributors to profitability were marked as the number of secured new managements, ongoing property management fees and income picked up from the sales team.

More than half the respondents (55.2%) in Rent.com.au’s February ‘Best Practice and Finance’ survey indicated their agency set an overall revenue target for the business, while 28.9% reported they had set individual targets for both the sales and management departments. Others indicated the number of managed properties determined their department’s profitability.

Property management heads reported that staff training was primarily allocated between 0-10% annually (78.95%), while 15.79% reported 11-20% of their budget was pushed in that direction. The remaining 5.26% said training was prioritised with 21-30% of their agency’s budget. Total staff turnover in the department was, on average, 5.2% according to the survey.

A summary of the key results include:

 At present, respondents indicated they managed on average 101-200 properties (25.64%), followed by 17.95% for both 301-500 and 500+ ranges.

 38.46% of property management heads indicated they would like to manage more than 500 properties, while 101-200 and 301-500 properties came in equal second on 17.95%.

 The key methods of securing new managements were: Referrals from owners (81.58%), referrals from tenants (41.11%), networking (47.37%) and referrals from the sales team (47.37%).

 Survey respondents indicated they spend the majority of their allocated budget on subscriptions to portals (70.27%)

 41% of property management heads indicated they met with their department every day.

 67.5% said they had a rent arrears percentage under 5%.

“Our results show that property management heads have prioritised growth and staff development by meeting on a regular basis with their teams. The majority (41.03%) indicated they would meet daily with their team, which suggests a strong commitment to immediate support and resolution for potential conflicts,” Rent.com.au CEO and Founder Mark Woschnak said.

Rent arrears are well managed across a number of agencies, with the majority (67.5%) indicating their arrears were under 5%, closely followed by 24.3% with between 6-10%.

Woschnak added that good property management resulted in repeat business and satisfied clients, thus driving up profitability. 

“While the sales impact on a company’s revenue is clear for the 74.58% of respondents who work in an agency that operates across sales and property management, our results indicate that strong communication, knowledge of properties and the local area, a set fee structure and benchmarks are key ‘best practice’ tools.”

The results showed that marketing budget is annually directed to advertising options such as local subscriptions to portals, local sponsorships, Facebook and Google Adwords.