Can Traditional Property Management Survive Property Managers leaving the industry?
In the face of an unprecedented mass exodus, the traditional Property Management model finds itself standing on shaky ground.
Recent statistics reported in the media have revealed that over a quarter of Property Managers are expected to abandon the industry within the next five years, surpassing attrition rates across all other sectors in Australia.
Property Managers have become the scapegoats of the rental crisis, with around “one-in-four” tipped to quit the industry within the next five years. – Courier Mail.
This alarming trend forces us to question the viability and sustainability of the traditional property management model.
In this blog, we will delve into the reasons behind this exodus and explore whether traditional Property Management can weather the storm.
What is Traditional Property Management?
In its essence, traditional Property Management follows a Portfolio-Based Model.
Property Managers are assigned a portfolio of properties to oversee, responsible for all aspects of managing those properties on behalf of the landlords.
This includes tenant screening, rent collection, property maintenance, lease agreements, and handling tenant inquiries or issues. The traditional model often involves a hands-on, one-size-fits-all approach, which can lead to high workloads and limited flexibility.
“Property Managers in traditional agencies often have a lot of hats to wear [which] contributes to the high turnover of Property Managers.” – Brisbane-based PM Mikki Van Dyke
Why Are Property Managers Leaving the Industry?
There are a number of factors contributing to the current mass-exodus of PM’s:
a) Overwhelming Stress and Conflicting Interests:
Property Managers find themselves caught between the interests of landlords, who face financial strain due to rate rises, and tenants who struggle with rising rents and housing scarcity.
This balancing act takes a toll on their mental and emotional well-being, leading to burnout and a desire to seek alternative career paths.
b) Escalating Complexity and Legislative Burden:
Recent legislative changes limiting landlords to one rental increase every 12 months are just the latest example of Property Manager’s job getting harder due to government regulations.
The Property Management landscape has become increasingly complex, with a myriad of legislative requirements that Property Managers must navigate.
Staying up-to-date with regulations and ensuring compliance has become a significant challenge, consuming valuable time and resources.
c) Disturbing Incidents and Toxic Environments:
Everyone deserves to feel safe at work.
Unfortunately, reports of verbal abuse and physical assaults targeting property managers have reached alarming levels, resulting in high-stress environments and a pervasive sense of insecurity.
These incidents contribute to a deteriorating work environment and further motivate Property Managers to seek safer and less volatile career options.
There are currently nearly 5,000 job advertisements for Property Managers on SEEK.com.
The Domino Effect: Increased Workload and Decreased Job Satisfaction
The large number of Property Managers leaving the industry creates a vicious and self-reinforcing cycle.
As more professionals leave the industry, the workload on the remaining property managers increases exponentially.
This excessive workload leaves little time for essential tasks, deteriorates job satisfaction, and amplifies stress levels.
The overburdened Property Managers become more susceptible to burnout and may themselves consider leaving the industry.
An Alternative to the ‘Traditional’ Model?
Amid the challenges facing Property Managers, it’s pretty easy to adopt a doom and gloom attitude.
However, some agencies are reimagining Property Management with alternative approaches.
One such approach is the Task-Based Model, where Property Management responsibilities are divided based on specific tasks rather than individual portfolios.
This allows Property Managers to specialise in specific areas and increases efficiency while reducing stress levels.
Additionally, Hybrid Models that combine elements of portfolio-based and task-based management have gained popularity.
These models integrate offshore staff and leverage technology solutions to streamline workflows, automate repetitive tasks, and provide more comprehensive support to Property Managers.
This can result in Property Managers who are not required to personally perform every duty “traditionally” associated with the handling of a portfolio.
Instead they have offshore teams behind them allowing them to place a much higher emphasis on the relationship-management aspect of their job.
Agencies who use this approach are often able to handle far bigger portfolios, some up to 300 properties.
Considering the industry is likely to be facing significant staff shortages for some time to come, while the number of rental properties is only due to increase, this increased capacity is like to become the norm in years to come.
As we explored in a recent case study, re-structuring Property Management with a greater focus on technology and offshore integration can also bring unexpected benefits, such as making the role more enjoyable.
The mass exodus of Property Managers leaving the industry poses a significant challenge to the Traditional Property Management Model.
Overwhelming stress, escalating complexity, and the burden of increased workloads have highlighted the limitations and unsustainability of the existing system.
However, alternative approaches, such as task-based and hybrid models, supported by technology and offshore integration, offer hope for a more sustainable and fulfilling future for Property Managers.
It is crucial for the industry to embrace innovation and adapt to the changing landscape to ensure the well-being of Property Managers and provide better outcomes for Landlords and Tenants alike.