Will Outsourcing Property Management Assistants Work for Me?
While outsourcing tasks to property management assistants based in remote, out-of-office, or offshore locations isn’t a new concept, the question remains, does outsourcing property management assistants work?
To clarify the differences, it’s important to first specify the various forms of outsourcing. When the differences become evident, it’s easier to evaluate the benefits, value, costs, risks, disadvantages, and recommendations of each property management outsourcing service.
The various forms of property management outsourcing are:
- Property inspections – these inspections are conducted when a tenant is residing in the rental property.
- Property showings – also referred to as ‘open for inspections’ are conducted when the property is either vacant or the tenant will soon move out, but is still residing at the property.
- Property maintenance – repairs, maintenance, and quotes for work to be done are processed when the property is either vacant or the tenant is residing at the property.
- General tasking – on occasions, various tasks are outsourced to an experienced property manager when the in-office team doesn’t have the capacity or bandwidth to complete the tasks in a timely manner. An example of this is tenancy renewals or vacating tenants.
- Bookkeeping, trust account management, and/or invoicing – generally outsourced due to lack of skill, or time.
- Application processing – as this is quite a time-consuming task, the application is outsourced for processing and verifying prior to being reviewed to determine if the applicant meets the eligibility requirements.
- Rental property enquiry – managing enquiries on vacant and vacating property and facilitating showings.
- Tenant induction – meeting conducted prior to the tenant being given possession of the rental property.
- Property marketing – preparing property descriptions, photos, and floorplans and loading the property to the various property portals when available.
- Database management – managing the database of prospective and past clients.
- Administrative tasking – as each category of property management task normally has around 60% administration tasks, these tasks can be outsourced. For example, preparing the tenancy agreement and supporting documentation for a new tenancy.
As there are a vast number of tasks that can be outsourced in property management, it’s worth understanding which tasks could be outsourced and which tasks should be performed by the in-office team.
Read related article: Property Management Virtual Assistants vs. In-House Assistants
Property inspections sometimes referred to as routine, in-residence, or Property Assessment Inspections, are conducted at regular intervals while a tenant is occupying the rental property. The inspections provide information that is as important for the rental property owner as it is for the property management company. The property inspection is conducted to ensure the property is being maintained and cared for by the tenant while ensuring they are abiding by the terms and conditions of their tenancy agreement. For example, not making any changes to the property if not authorized to do so. The inspection also determines the state of repair and if any maintenance is required at the property. The inspection also assists with determining if the property remains market-relevant and, therefore, achieving the best possible rent. As well, it establishes if the property is demographically appealing, meaning that the property matches the criteria for the demographic that resides in the area where the property is located.
Benefits: The inspections form part of the contract and, therefore, the obligations of the property management company to the rental property owner. If the inspections are not carried out and completed as per the management agreement, the property management company is in breach of its contract with the owner. By outsourcing property management assistants, they will feel relatively reassured the inspections are being completed as and when necessary.
Value: The only value to the property management company is that they are ensuring the inspections are being completed on time by taking this task away from their in-office team.
Costs: The cost per inspection is generally around AU$45 to AU$60 per inspection. If inspections are conducted three times per year, this means that for a rent roll of 300 managements (doors) at $50 per inspection, this would cost around $45,000 annually to outsource inspections. This is around the cost of the salary for one team member.
Risks: Since the property management company has no control over the character, standards, skills, or knowledge of conducting inspections and subsequent standards of reporting, the risks are vast. The inspector will most likely not be aware of any special instructions provided by the rental property owner or property manager as to what may need further investigation at the property,
Disadvantages: The property manager loses their connection to the property, the tenant, and the location. As a result, this impacts their value and relevance to the rental property owner. If the property management team is not seeing the property first-hand, it’s difficult to advise the owner, especially when it comes time to renew the tenancy. The property manager will struggle to provide accurate advice on the tenant’s standard of occupancy and deliver an accurate rental appraisal due to their disconnect to the property and not truly understanding what repairs should be done to maintain the property’s standard and appeal.
The rental property owner may believe that it is far less expensive for them to hire someone to inspect their property at regular intervals and converse directly with the inspector, rather than paying a property management company to inspect their property.
Recommendations: The portfolio manager is the best and most relevant person to do the property inspection in accordance with the terms of the management agreement. The report should also be prepared by the property management company to maintain consistency of reporting and a standard that can be managed. ireviloution has designed and implemented processes to manage and generate improved efficiency, performance, and productivity whilst providing high-standard property inspections.
Property showings, also referred to as open for inspections, are conducted when the property is either vacant or the tenant will soon move out. At the time of showing prospective tenants through the property, the current tenant may still be residing at the property. The property showings are offered to show prospective tenants through the property, so they get a ‘feel’ for the property and have the opportunity to see its tangible and intangible qualities. The person showing the property should have a sound knowledge of it, the rental property owner’s instructions, and the market where the property is located.
Benefits: The benefits of outsourcing this service are limited. It may save salary costs as most prospective tenants only have time to view properties outside standard work hours (usually in the early evenings or weekends). By outsourcing this service, the property management company can offer inspections at the times when prospects are available to view it. This is a distinct advantage to rental property owners as they have peace of mind knowing they will not miss the opportunity for their property to be viewed and possibly rented. Rental property owners will seek out property management companies that offer property viewing times outside of standard working hours.
Value: There is not much value to the property management company, nor the rental property owner for that matter. The only foreseeable value is guaranteeing that the property management company and the rental property owner will not miss the opportunity to show the property when prospects typically like to view the property.
Costs: Every property showing will cost the property management approximately AU$45 to AU$60. This cost does not take into consideration the cost of inspecting the property to prepare move-to and move-in reports, nor the cost to process and negotiate applications, and then prepare the new tenancy contract. If you take these other costs into consideration, most businesses will show a net loss on the fee charged for new tenancy.
Risks: While risks would be considered minimal, the person showing the property on behalf of the property management company should be of sound character. They have an enormous responsibility when showing a property. If the property is occupied, they must be sure to be courteous, considerate, respectful, and caring of the current resident. The person showing the property is also responsible for ensuring the property is secured when the showing is over. This includes ensuring taps (faucets) are all off, lights are off, cookers and gas are off and the security is armed (if security is installed). There is a level of risk to the current resident and owner if the person showing does not communicate the property’s features and appeal. As well, the property management company risks having their reputation damaged and business lost if they are not effectively managing the showing, including communicating the results and feedback to the rental property owner.
Disadvantages: The obvious disadvantage of outsourcing property management assistants to takeover this task is losing the ability to see the property and hear the reactions first-hand from prospective applicants. Another distinct disadvantage is the lack of connection with prospective applicants. As well, another disadvantage is not being able to showcase the property management company’s hands-on service should a prospective rental property owner view the available property with a goal of observing the company’s standards.
Recommendations: Outsourcing property showings is not recommended. The costs are an unnecessary expense, the risk is too great when it comes to missing the opportunity to convert prospects to applicants, information shared may be incomplete or incorrect, and if a property viewer is a prospective rental property owner then you risk never gaining their business. Property showings should be planned in accordance with the team’s weekly workflow and not outsourced. Rather, a portfolio manager or property management assistant should show available rental properties. In larger companies, it may be more cost-effective to employ a dedicated leasing manager, but a cost analysis is recommended. To learn the most cost-effective methods and efficient practices for managing property showings, we recommend doing training through the International Property Management Academy.
Keep an eye out for additional insights to determine whether outsourcing property management assistants is a suitable choice for your business. Alternatively, book a complimentary Purple Powered VA Consultation today to explore the advantages of outsourcing.