Portfolio vs Task-based Property Management: 2023 Pros & Cons
What’s the best way to structure your Property Management Department…portfolio or task-based?
And is it true that the portfolio model gives better service?
Or is that a myth that needs to be debunked?
To answer these questions, we should start with a quick overview of the two different models, so that we’re all on the same page.
The Portfolio (end-to-end) Model
Traditionally, Property Management has been run using a portfolio based approach. (sometimes referred to end-to-end).
In this model, all the tasks associated with a property are completed by their Property Manager.
Their list of duties range from admin, to being on the road doing inspections, to dealing with landlords and tenants.
But increasingly there is a trend of businesses moving towards a task-based model.
The Task-based Model
In a task-based model of Property Management, admin support staff and field service teams support the Property Manager with certain tasks and processes so that their time is spent on more “dollar productive” activities.
So, which model is best?
We don’t believe there is a one size fits all solution, each Real Estate has different needs and unique circumstances. Every business will eventually have to weigh up the pros and cons of the portfolio model and decide if it’s right for them.
So what are the pros and cons of the portfolio model?
Pros
Personal Service
Perception is a very powerful thing, and the “traditional” end-to-end, portfolio style is often perceived by landlords as a more personal service.
Landlords don’t want to have more than one point of contact – and also expect a high level of accountability from their Property Managers.
We don’t believe that it is true that the end-to-end model is inherently superior at providing a personalised service, and is a myth worth debunking.
After all, businesses that use a task-based model dominated the recent RateMyAgent awards, which measure customer service using only verified reviews from real clients.
That’s strong evidence to the contrary.
But the perception remains and that counts as a pro.
The PMs know everything about your property
It can be comforting for landlords and tenants to know that the person they speak to is intimately with their property and history.
While this is a definitely a Pro, the issue with this over-reliance on one person is self-evident.
What happens if they go on holiday, have a sick day, or emergency to attend?
Or even worse, unexpectedly quit.
The flipside of having a really good Property Manager is that they can be hard to replace, or cover for.
Smaller Agencies
For agencies with smaller rent rolls, the end-to-end model can be more viable than a task-based model. In these businesses it might just make more sense for one person to wear many hats.
There does need to be a certain volume of work to justify moving to a task-based model. Or at least a plan for growth.
Cons
Portfolio size
One of the biggest downsides of the end-to-end model is that it can restrict the capacity of the Property Manager. It is generally accepted that the upper limit of how many properties one PM can handle is around 150.
Anything beyond this places an extreme burden on the Property Manager.
From spending hours on the road going from one inspection to the next, to coming back to the office and finding 100 emails waiting for them, Property Managers are flat out handling a portfolio of this size, let alone anything bigger.
There might be some incredible Property Managers out there who can handle 200 properties, but all it takes is one unexpected emergency and they could be thrown into disarray and fall behind on their work.
Whereas Property Managers who work in businesses that operate on a task-based model are often able to handle portfolios up to 350 properties.
Burnout
To be clear, burnout can happen in any model of Property Management, and in any industry. But the end-to-end model can exacerbate the problem.
That is because the role of Property Manager has only gotten more complicated and its workload has only increased.
Legislation changes and increased tenant and landlord expectations mean that more is expected of Property Managers than ever before.
With such demands on the role there can be precious little time left over for professional growth and ongoing training.
Even taking holidays can be difficult, with such an unrelenting workload.
It is little wonder that approximately 30% of Property Managers leave the industry due to stress and burnout.
A hybrid model?
Many of the best Property Management agencies across Australia have weighed up the Pros and Cons of the end-to-end vs task-based approach and have chosen to use a hybrid of the two.
In this model the Property Managers take responsibility for a portfolio, but are not required to do every single task themselves.
They still have total oversight, and crucially are still the point of reference for both landlords and tenants.
The hybrid model aims to balance the perceived service benefits of the end-to-end style with the efficiencies and economies of scale that of the task-based model.
At the end of the day, each agency will have to weigh up the Pros and Cons of portfolio vs task-based Property Management before deciding which model best suits your business.
