Why landlords leave – and what PMs can do about it
Considering all the hard work that goes into building rent rolls, it’s worth examining the other end of the equation too – why landlords might choose to leave your agency.
Here are 10 common reasons landlords leave:
- The landlord has sold the property. If you’ve done a good job of keeping tenants on side through the sales process, it’s a good opportunity to chat to the property investor, ask for referrals and about their future investment plans. You never know, you could win more business than you lose.
- Lack of communication. Sometimes a lack of communication is more about poor expectation management. At the outset, it can be helpful to explain how often and in what circumstances investors can expect to hear from you, and to ask whether the landlord prefers email or phone calls. If you don’t have an immediate answer to any of their queries, let the landlord know when they can expect a response. And don’t make unrealistic promises or sugar-coat difficult issues.
- Having to deal with too many people. Landlords like a single point of contact. It helps minimise confusion, repetition and the risk of tasks “dropping through the cracks”.
- Price. If your competitors are discounting to win new business, particularly if they’re advertising, it could be worth communicating with your landlords about why your fees represent good value in light of the quality service you provide. And, while we’re on the subject of fees, in an era of email, charges for “postage and petties” can really get up a landlord’s nose!
- There’s been a serious incident at the property. If a property suffers serious malicious tenant damage, is used as a drug laboratory or goes into rental default, the landlord may blame the property manager. However, if you have proactively discussed the need for landlord insurance, the owner might be grateful for your foresight – instead of being angry and leaving your agency.
- Constant changes in personnel. Landlords do not like being handed from property manager to property manager, having to repeat themselves etc. Strong agency systems can help make sure nothing is forgotten if a change in PM can’t be avoided. It is also preferable for the new PM to reach out to landlords, rather than waiting until the client phones only to be told their previous PM “doesn’t work here anymore”.
- Costly mistakes. People make mistakes, sure, but if your mistake leaves a landlord out of pocket, then watch out! While it’s painful for an agency principal to dig into their own funds to compensate a landlord, it’s worth remembering that each landlord adds a significant sum to the value of the agency’s rent roll – and contributes to your income each month.
- Feeling ripped off. Most landlords are not particularly wealthy and they do care about value for money when it comes to repairs and maintenance. Take the time to explain to your clients how you select trades people, and the value your chosen suppliers offer in terms of reliability and availability. If a landlord is particularly cost sensitive, it might be worth discussing how much they are willing to authorise so you can get jobs done on the spot and at what value they expect a written quote first.
- Vacancy. Periods of vacancy are part of life but landlords need to be updated regularly on the efforts you are making to find a tenant, feedback from open for inspections and pricing for comparable properties. You need to stay in regular touch even if there is nothing substantial to report.
- Unreasonable expectations. Some landlords aren’t on the same planet as the rest of us, and will be unhappy no matter how hard a property manager tries or how well they perform. If one of these constantly unhappy campers threatens to leave your agency, your wisest course of action may be to wish them all the best as you wave goodbye!