Property Management can be a great contribution towards your business, and towards you real estate strategy. You may find yourself in a position where, for some reason or another, a property you were managing will no longer require your expertise. You should be fully prepared to take on a new property management flow whenever you get the opportunity. You will surely enjoy building an impressive portfolio of income properties as the list of your clients will grow, but in all the excitement, you should not forget the reality that some of your existing clients will end your authority to manage their properties from time to time. If this happens and (if) you’re down about it, we’re here to stay to keep your enthusiasm up! When it happens, it may dishearten you since you may feel your client is taking this step despite the fact that you always kept his or her best interest at heart.
Instead of feeling let down, you should analyse as to why your client has taken this decision. This analysis may help you improve your services as a property manager.
We’re going to go over some common scenarios as to why your services as a property manager may no longer be needed. It doesn’t always have to do with your level of service, and that’s some important to know and plan ahead for the best you can. Here are some of the reasons your client may want to end your property management authority:
Reason#1: Your client is selling
Your client may be selling the property, so he or she may have served a notice for ending the management. In this scenario, we hope that you have kept in touch with your client enough to have known about the sale beforehand. If you did, you should be the real estate agent representing your seller. After all, there is no other agent that know about the history, tenant and details of the home as much as you, the agent who purchased the home and property manager, knows. This is in fact something that you should remind your client when they first purchase the investment property. Let the know that if they would like to sell the property one day, to contact you and you will go over a plan together.
However, If you have learnt about this fact after the seller has decided to sell, try to find out what stage the property’s transfer is in. If your client and the new buyer has signed an agreement, you can pitch your business to the new buyer so that you can continue to manage the property, if you are still interested.
If no agreement has been signed, you should make it clear to your client that you have a great advantage of other agents to represent them in selling this home. Especially give your presence and expertise as an agent and a property manager.
Reason#2: Lack of communication
Your client may feel you are not managing the property well despite the fact that you are already doing your best. In many cases, lack of communication may cause this feeling in your client. If your client decides to end the management because of the dissatisfaction with your services, you should immediately find out the reason behind this dissatisfaction. The best way to prevent this from becoming an issue, is to establish clear communication expectations right from the beginning. How often would they like to hear from you, and how would they like the information to be communicated?
In the era of phones, text, whatsapp, social media, email and much more, they may prefer an update via text every time the rent has been deposited. Alternatively, they may want to be updated only when there is an issue or when you visit the property. The important message here, is to never let the lack of communication to be a reason why someone would not work with you, whether it is as an agent or property manager.
Reason#3: Lack of transparency
Your client may believe that there is a lack of transparency in determining renovations or maintenance costs or management fee. Never have your client pay any hidden charges. You will need to learn the importance of having a standard operating procedure (SOP) in place to bring uniformity and transparency in your services. In the SOP, you can outline how you charge maintenance costs and give a detailed breakdown of the fee for your services.
Reason #4: Bottom Line
Another reason may be that your client may suddenly realize he is wasting money by paying to a manager for managing the property. Always explain to your client what value a professional property manager can add to his real estate portfolio and why he should focus on increasing the income by growing the portfolio, instead of wasting time on the day-to-day management of his properties. Often, investors with one property may feel that they are able to take care of the property on their own, or, that after payments are made for your services as a property manager, the monthly cash flow is much less than its potential. Depending on the number of properties, and the property type, the investor may feel that they are able to take on the responsibilities to increase their cash flow.
In this case, analyze your clients current situations, and possibly expanding their portfolio of investments. Propose other investment properties which would yield them a high rate of return on their investment, whether it is another single unit or multi unit. Assess their current situation, and build a strategy to help them build wealth through real estate.
You will need to examine the reason why your services as a property manager would end, learn how to improve, and transition the situation into another business opportunity. Like the saying goes, if all you have in your hand is a hammer, then look at everything like it is a nail. Did you get that analogy? I hope so !